retail news in context, analysis with attitude

A guest column by Chelsea Ware

Content Guy's Note: You may remember that I met Chelsea Ware at Portland State University's Center for Retail Leadership's annual executive conference. She's a student in the program, and when I found out she also was a blogger, I invited her to write a piece for MNB ... and when she did, we got a terrific reaction to her insights into how her generation thinks and acts ... So I asked her to write another one.

Enjoy.


A recent cleaning session revealed five different loyalty cards in my wallet and six more scattered in the various nooks and crannies of my studio apartment; and I doubt I am alone. According to Time Magazine, Americans had a collective total of 2.65 billion loyalty program memberships in the year of 2012. But when you think about it, does having a loyalty card really increase the frequency of shopping with a particular retailer? For me, I would have to say no - based on the fact that I probably use three of my loyalty cards on a regular basis while the rest sit and collect dust.

So where are the majority of retailers going wrong?

To begin with, when targeting millennials with loyalty programs, many retailers don’t understand what makes us loyal or what we view as a reward. At most grocery stores, the most common rewards are gas points and moderate price discounts. However, due to economic and cultural shifts this loyalty program model could soon become obsolete.

For older generations, the automobile was the ultimate symbol of independence and freedom; it was a rite of passage that enabled people to have more experiences. However, due to the astronomical amount of student debt that millennials hold, many people my age see owning a car and its associated monthly payments as an expensive ball and chain. Compared to previous generations, millennials drive less and walk, bike and take public transit more. If we do drive, we often use car sharing programs like Zipcar and Car2Go and don’t visit the pump too often. In an age where most of millennials' income goes to Nelnet Student Loan Provider and rent, we have had to find other ways to express our independence and freedom.

However, this cultural shift has opened up a great opportunity for retailers to better enhance their loyalty programs. Millennials are getting married and having children later, which means that we aren’t as family oriented in our twenties and thirties. We have time to cultivate our personal interests and we take pride in doing so. We partake in things such as cooking classes, attending art exhibits, and religiously following music shows. Although we may not own cars, our vast knowledge of technology and social media in conjunction with our passion to nurture our personal hobbies has allowed us to virally express our individuality and independence.

As a result, retailers should structure loyalty programs around bringing these sorts of experiences to us. Although occasional moderate price discounts are nice, many twenty somethings are eagerly waiting for the day when our purchases will amount to free or reduced price concert tickets that we can photographically flaunt to our followers on Instagram or give us exclusive access to a hot new product that we can show off on Facebook. We may not have cars, but we do have a strong desire to brag to our friends on social media, so please give us something to brag about!

Chelsea Ware is a senior at Portland State University who is pursuing a bachelor's degree in business marketing in addition to a food industry leadership certificate. When not researching food industry trends, you can find her at Whole Foods in search of ingredients for the perfect pasta recipe.
KC's View:
The upside of this column is that Chelsea makes an excellent point about how retailers must begin rethinking traditional programs because of changing priorities of younger generations of shoppers; don't underestimate the impact that crushing student debt is going to have on generations os shoppers.

The downside is that her use of terms like "older generations." It makes me cringe.