For many, the American Express card is a sign of success. But as many cardholders in Europe know only too well, Amex is often rejected by retailers outside of major cities.
But as the global credit card giant continues to try to gain a foothold among reluctant retailers, it is betting on attracting young customers with the help of the world’s biggest pop stars.
Elizabeth Rutledge, Chief Operating Officer of Amex, said Assets that Generation Z and Millennials now purchase 68% of cards worldwide.
These younger shoppers are addicted to lifestyle amenities like entertainment, dining and travel. Amex is now catering to these needs with a strong focus on the entertainment sector.
“It’s about experiencing the excitement of a Formula 1 race or gaining access to exclusive culinary experiences,” said Rutledge.
In the UK, Amex has reached out to young Brits with partnerships at London festivals such as British Summer Time and All Points East. Cardholders can benefit from early access to tickets and receive discounts on site.
The group collaborated with Gen-Z pop superstar Olivia Rodrigo on their successful second album last year. offaland a corresponding sold-out world tour.
Amex hosted a special event following Rodrigo’s concert in Berlin, where cardholders and other fans enjoyed local artists and DJs at an after-party. Fans also had access to special checkouts for limited edition merchandise.
The fact that nearly 60% of Generation Z reportedly describe themselves as “superfans” of their favorite artists increases the appeal of these perks, according to Rutledge.
In addition, Amex offers card members the opportunity to participate in exclusive culinary events, including restaurant openings, including Great British menu Winner Dan McGeorge’s new spot Vetch in Liverpool.
The hope is that attracting younger Amex customers will result in them remaining loyal to the card as they get older and their income increases.
“They really represent a great potential lifetime value for us as we can accompany them through all of their different life cycles as their needs evolve and change.”
Amex’s playbook is the the same in the USAwhere the group recognized Generation Z and Millennials’ universal need for experiences and began adapting their rewards.
This marks a shift from the previous focus on points-based rewards and other benefits that continue to help sustain members’ spending. Partnerships with specific products, such as Disney+, allow users to benefit from discounted subscriptions. When shopping at other retailers, such as RayBan, Amex customers receive cashback opportunities.
Amex has tried various strategies in the past to attract young customers, but has had to learn a lot along the way.
“Until about 10 to 15 years ago, we thought that fee-free cards were the entry point to attract younger customers to the franchise,” said Howard Grosfield, president of U.S. customer service at American Express, Assets in June.
“We’ve learned that this isn’t the right strategy for Millennials and Generation Z. They like brand affiliation. They like to travel and eat out, and they like the special access and experiences that our premium cards bring.”
Amex continues to expect that its younger customers will become more accustomed to the traditional rewards system as they get older, but in the meantime, it’s proving to be a successful way to engage Gen Z and Millennials with experiences and keep Amex cards.
However, Europe continues to pose obstacles to the company’s growth.
European progress
Compared to its presence in the US, Amex has long lagged in Europe. Retailers and grocers, especially small ones, are reluctant to accept the card in their stores because transaction fees are too high. They have instead chosen to accept Amex’s arch-rivals Visa and Mastercard.
The group leverages third-party partnerships, including a deal with PayPal, to enable shoppers to use their Amex cards on the continent.
“We are focused on expanding acceptance in key cities where our cardholders live, work and travel,” Rutledge said.
Amex’s rewards programs have long been its unique selling point over other credit card providers, and with Generation Z and Millennials addicted to “buy now, pay later” companies like KlarnaAmex relies on discounts that the interest-free lender cannot compete with.
However, Amex’s fees continue to hamper the company’s ability to entice Europeans and the millions of Americans who travel to the continent each year to use its cards.
In June, eBay forbidden the use of Amex on its website, citing “unacceptably high fees,” raising the risk that other retailers could follow suit in the ongoing credit card fee war. Customers can still use their Amex card on eBay through PayPal.
“We are certainly disappointed with eBay’s decision to stop accepting American Express cards,” Rutledge said.
“I believe that this will limit customers’ payment options and take away that service and security.”
Rutledge added that eBay accounts for just 0.2 percent of its total network volume.