Millennials Value Personalized Offers the Most

Millennials are one of the main classes of consumers for certain categories of products such as clothing, personal care and home spending. Though they don’t enjoy a digital experience as much as Gen Z consumers, who are considered the first fully-digital natives, millennials value receiving personalized offers from merchants the most. According to a recent PYMNTS Intelligence study, nearly 45% of them consider this type of offer highly important to their shopping experiences, in comparison to the 31% for the overall sample, and 41% would consider switching merchants if given more personalized offers.

These are some of the key data and insights provided by “Personalized Offers Are Powerful — But Too Often Off-Base,” a PYMNTS Intelligence research study in collaboration with AWS that examines U.S. consumers’ preference regarding merchants’ personalized offers. The report, based on a survey of over 2,500 U.S. consumers, explores the effectiveness of personalized offers and the need for merchants to improve their capabilities in this area.

Across sectors and generations, the shift toward personalized experiences and tailored customer journeys is becoming a reshaping business strategy. In the specific case of millennials, PYMNTS Intelligence data reveals nearly 90% of this generation say they are interested in receiving personalized offers from merchants, showing the highest interest among all consumer groups.

The results of the study highlight that merchants still have potential for further marketing efforts targeting this segment, as only 85% report having received any of them in the last 90 days prior to being surveyed. To fill this gap, the types of personalized offers millennials value the most are promotions and discounts, followed by free shipping and exclusive access to new products, according to the survey. These preferences are in line with those of  other consumer groups, such as Gen Z. However, while the discount is the most important factor in millennials’ purchasing decisions, they are the most likely to cite product quality and reviews as important factors in their purchasing decision.

Millennials are also the group more inclined to switch merchants in search of better personalization. In particular, 41% of consumers from this generation are likely to switch to a different merchant if given more personalized offers, while Generations Z and Gen X consumers trail at 34% and 26%, respectively.

When choosing how to receive discounts, 63% prefer email and 31% mobile app notifications, per the report, as is the case with other younger consumers. Beyond this, millennials prefer receiving discounts via text message more than other generations, with 1 in 3 selecting this option.

The report also suggests that merchants must bridge the substantial gap in effective personalization, as only 44% of consumers from the overall sample find the offers very relevant to their needs. Improving the accuracy of data-driven strategies is crucial for merchants to successfully send personalized offers targeting different segments. In the specific case of millennials, this comes from monetary offers, such as special discounts and promotions, but also incentives like access to exclusive products or personalized recommendations. Tackling them can attract new customers from the millennials generations and build loyalty more than for other segments.