Generational Divide Patterns Show Loyalty, Rewards Strategies

Merkle's 2023 Prizing Report: Rewards That Resonate in a Post-Pandemic World draws comparisons from pre- and post-pandemic data and shows the generational divide from Gen Z to Baby Boomers, highlighting what loyalty and reward strategies resonate most with each group.

For example, nearly 50% of Gen Z consumers favor Venmo and PayPal as a reward method. while 49% of Gen X prefers gift cards. 

Merkle surveyed 1,151 consumers in December 2022. They were sourced outside of the loyalty programs and promotions that the agency manages for clients. Responses came from U.S. residents ages 18 to 65.

The report shows impact and gender impact choices. While there are some nuances between demographics, there are a few safe bets when it comes to planning for a broader target audience.

Rewards that focus on everyday needs, such as groceries or even a mortgage or rent payment, will resonate with consumers who are seeking some relief for their budget.



Consumers require the necessities. Across the income spectrum, we found that all consumers are looking for items that make everyday life easier. While this is most pronounced among lower-income households, even those earning more than $150,000 are using rewards for grocery gift cards or free gas for one year.

Men play favorites. Vacations and shopping sprees remain enticing grand prizes for both genders, but males made a distinct shift by choosing a lifetime supply of their favorite brand their number-one preference. This is driven primarily by millennial and Baby Boomer males and likely is influenced by tighter budgets.

When faced with a choice of a smaller cash prize, respondents agreed overwhelmingly that the considerable increase in value was worth the wait.

That willingness to wait is relatively comparable when the prize amounts are closer together, either $100 or $200.

Merkle suggests that marketers consider this strategy prize planning, as $100 can have an immediate impact on everyday essentials.

When asked which would consumers rather win the results were as follows:

  • 35% --- $5 you receive now
  • 65% --- $25 you receive in six weeks
  • 44% --- $100 you receive now
  • 56% --- $200 you receive in six weeks
  • 34% --- $500 you receive now
  • 66% --- $1,000 you receive in six weeks

A generational divide separates the type of payment systems that older and younger generations prefer to use. Gen X and Baby Boomers, for example, prefer Visa and Amazon gift cards more than millennials and Gen Z, who prefer Venmo and PayPal credit.

When it comes to generational perspectives, nearly 50% of Gen Z favor Venmo and PayPal. and they opt for digital codes for their mobile wallets twice as much than Amazon gift cards and almost five times more than a brand gift card. They are also more open to digital codes for mobile wallets compared to any other generation. 

Gen Z follows other generations in terms of the top three prizes -- shopping spree, vacation, and lifetime supply of favorite brand -- but breaks out from the crowd a bit, ranking the opportunity to be the face of the brand as fourth. 

When it comes to guaranteed prizes or trying their luck, 63% of millennial males would prefer the chance to win a large prize, compared with 49% of females.

As a group, 56% of millennials overall would prefer the chance to win a large prize versus a guaranteed reward. Venmo and PayPal credit tops all other payment forms among millennials at 46%, followed by 33% who prefer Visa.

Some 53% of Gen X leans toward a guaranteed small reward -- showing a stronger interest in this type of prize versus any other generational preferences. 

Half of Baby Boomers prefer Visa gift cards, with 24% favoring Venmo or PayPal credit.

Not surprisingly, baby boomers have almost no desire for cryptocurrency or digital codes for mobile wallets.

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