How Retailers Can Engage Shoppers Across Generations In 2025
As CTO of Engage People Inc. Len Covello helps companies differentiate loyalty programs to deliver a better experience for their customers.
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It's becoming increasingly clear that members of different generations have distinctly different shopping habits— and thus, different preferences for what they want from retail loyalty programs. For retailers, it can be difficult to navigate how to effectively tailor products, offerings and even communications to satisfy the needs of shoppers, no matter their age.
One thing is clear, though. Regardless of generation, loyalty program members want to maximize program value through monetary benefits. According to Deloitte, "eight out of 10 consumers said earning and redeeming financial rewards was the most important attribute when looking for a loyalty program."
While financial rewards are top of mind across the board, there are generational differences that retailers should be aware of and tap into. Below is a look at what the data shows and how retailers can implement strategies to foster loyalty across generations.
Various factors are causing consumers to abandon even their most beloved brands. It often comes down to cost savings, convenience and finding better deals elsewhere, but there are also challenges within loyalty programs themselves that can cause members to disengage.
Out of all generations, Baby Boomers are the least loyal, according to WorldPay. Their research found that personalization, rewards that don't expire and the ability to redeem across retailers are the most important attributes of loyalty programs for this generation.
Retailers looking to capture engagement from Boomers should plan their perks and communications accordingly if they want to fuel engagement. Keep in mind that unclear rules can also lead older loyalty members to disengage.
When it comes to younger generations, particularly Millennials, they're looking for rewards with a deeper meaning, Worldpay found, and members of Gen X through Gen Y crave rewards that aren't linked to spend.
For younger generations who want to use their points to make an impact and older generations who want to use their points across the retail ecosystem, 'pay with points' could be the ticket to fueling engagement.
My company recently commissioned a survey with The Wise Marketer and found that 78% of those surveyed would engage in loyalty programs more if they could exchange points for cash-like value. This gives customers across generations more choice, similar to what they'd expect from cashback incentives, while keeping an intimate connection with the rewards and the retailer.
Experiential rewards, where brands reward loyalty members for participating in various brand-aligned activities, are on the rise. But that doesn't mean everyone has bought into them. While experiential rewards are useful for engaging millennials and Gen Z, older consumers focus more on immediate financial benefits.
In addition, younger consumers show a stronger preference for experiential benefits and novel customer experiences, according to the Deloitte research cited above. They want stronger digital capabilities and a sense of community. These are just a few areas that indicate members of each generation have different preferences and needs when it comes to loyalty programs.
Breaking this down further, loyalty program basics like discounts and promotions are demanded by members of the Silver Generation, particularly those age 70 and older, whereas members of Gen Z want access to quality products.
Considering loyalty program participants' diverse needs and demands, it's more important than ever that retailers adopt omnichannel experiences. This ensures that each member has a streamlined shopping experience regardless of how they engage—whether in-store or through email, which is preferred by older generations, or on social media and via apps for younger members.
The good news for retailers is that they don't have to pull out all the stops to appease every member of every generation. Trying to please everyone dilutes brand identity. It's important to focus on core customer segments while ensuring inclusiveness, and there are a few strategies to consider to find that balance.
One is to evolve loyalty programs with new tools to engage effectively with target customer segments. This includes leveraging AI to inform tailored messages and offers. AI recommendations can help ensure that promotions remain relevant across members of different age groups.
In addition, tools like AI-powered chat, personalized push notifications and interactive mobile experiences can build up engagement among younger generations who prefer to interact digitally. That's in addition to user-generated content and gamification. Brands looking to ramp up digital engagement should consider the plethora of tools at their disposal. Gamification, for example, helps fuel a sense of belonging, which younger consumers crave.
When it comes to earning and redeeming, instant is best. Allowing customers to leverage their rewards instantly at the point of sale can increase engagement, whether that's through paying with points, redeeming via a gift card or earning cashback.
These days, brand loyalty is not a given. Retailers have to work hard to keep their core customers engaged while opening doors for new pools of customers across generations to try their products and services. 2025 is a year for testing and learning, investing more in meeting the demands of core segments while offering diverse options that invite other generations to the table.
While testing and learning, one thing is certain: Retailers must remember that amid ongoing economic uncertainty, offering strong financial rewards as part of their loyalty programs is key. That's something members across all generations want. Without it, loyalty programs will fall flat.
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