Businesses are always looking to grow, and for
that means appealing to younger generations.
American Express (ticker: AXP) has long been associated with corporate travel and luxury shoppers, but in recent years the card company has deepened its efforts to recruit millennial and Gen Z consumers. And it appears to be working.
“Millennial and Gen Z customers, who are our fastest-growing customer cohort in terms of both new account acquisitions and card spending, comprised over 60% of our new consumer proprietary accounts globally,” Stephen Squeri, chairman and chief executive at Amex, said in a letter to shareholders Thursday.
Squeri provided further details on Amex’s strategy for appealing to younger generations in a recent interview with Barron’s. He noted that 75% of the new accounts being opened by younger spenders are higher-echelon gold or platinum cards. At first Amex thought about introducing itself to the younger demographic by focusing on fee-free products, said the CEO, but it soon realized the best approach was to lean into its reputation for providing clients with access and perks.
“What we realized was that as you started to look at the card base and what people wanted, when you think about our products and services, we’re about access, we’re about experiences, we’re about service. And why shouldn’t that appeal to Gen Zers and millennials as well? And it did,” Squeri said.
Of course one of Amex’s core services is the travel perks that its users enjoy, including access to airport lounges and hotel benefits. During the early days of the pandemic, when travel was largely at a standstill, Amex had to pivot to more relevant perks.
“If you think about during the pandemic, while our value proposition at that particular point in time was really heavy travel, we started to put on streaming benefits, we put on cellphone benefits, we put on benefits for small businesses in terms of shipping,” Squeri told Barron’s. That effort has continued, with Amex’s platinum card now offering benefits tied to “everyday life” such as fitness-related perks with companies like Equinox and SoulCycle, as well as credits for
(WMT) membership program.
Those enhanced perks really resonate with millennial and Gen Z customers, Squeri wrote in his letter, and have helped the company boost cardmember spending by 25% year-over-year.
Write to Carleton English at firstname.lastname@example.org
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