Prime Highlights:
- American Express and luxury brands like Tapestry are actively targeting Gen Z and millennials, offering tailored products and benefits to attract younger consumers.
- Engaging these younger generations now positions companies for long-term growth, customer loyalty, and stronger sales in the future.
Key Facts:
- Gen Z’s spending power is expected to reach $12 trillion in the next five years, giving them significant influence over brands and products.
- Since the launch of the Resy dining credit, Amex card members have spent 25% more at participating U.S. restaurants.
Key Background:
American Express and top luxury brands are now focusing more on Gen Z and millennials because of their growing spending power. For American Express, this means creating products for young, adventurous customers in their mid-20s to mid-40s. CEO Steve Squeri recently explained how the company is updating its U.S. Consumer and Business Platinum Cards to attract these younger customers.
Dining has become the fastest-growing category for American Express in the first half of this year. To meet this demand, the company introduced a $400 annual credit for bookings made through Resy, a restaurant reservation platform Amex bought in 2019. This benefit gives cardholders priority at top restaurants. Since launching the Resy credit, Amex card members have spent 25% more at participating restaurants in the U.S.Resy CEO Pablo Rivero also noted that similar benefits have been extended to other Amex cards in 2024.
Squeri emphasized that Gen Z (up to age 27) and millennials (ages 28 to 44) now make up 35% of all U.S. consumer spending for Amex, a significant rise from 19% in 2019. These younger groups are especially drawn to fee-based cards like the Gold and Platinum, showing they could become long-term customers.
Luxury brand Tapestry, which owns Coach and Kate Spade New York, is seeing the same trend. CFO and COO Scott Roe said that more millennials and Gen Z shoppers are choosing Coach, helping the brand post strong sales for the quarter ending June 28. “By 2030, Gen Z and millennials will make up over 70% of the market,” Roe said, adding that attracting customers with their first luxury purchase can bring long-term benefits.
Gen Z could spend $12 trillion in the next five years, giving them a big say in what brands and products succeed. Companies that connect with them now can grow and keep them as loyal customers.
Such brands as American Express and Tapestry are offering the appropriate products and benefits to satisfy the needs of this new generation and contribute to the increased sales and retention of customers.
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