American Express CEO Steve Squeri recently disclosed the company's successful endeavors in attracting more millennial and Generation Z customers, revealing that this demographic constituted a significant portion of new card acquisitions in the last quarter.
In an interview with CNBC's Jim Cramer on April 30, 2024, Squeri highlighted the importance of catering to younger clientele and emphasized the value proposition American Express offers to this demographic. According to him, younger cardholders hold substantial long-term value for the company, as they tend to maintain their American Express cards as they age.
Squeri noted a strategic shift in American Express's approach to attracting millennials and Gen Zers, moving away from offering no-fee cards with limited benefits. Instead, the company focused on providing cards with high-value propositions tailored to the preferences and lifestyles of younger consumers. Squeri cited the example of the platinum card, which offers significant benefits exceeding the annual fee of $695, making it an attractive option for younger cardholders.
Squeri attributed the growth of the younger customer base to the increasing acceptance of American Express cards by merchants. This expanded merchant acceptance has facilitated greater usage of American Express cards for everyday transactions, further enhancing their appeal to younger consumers.
Highlighting the spending habits of younger cardholders, he revealed that cardholders under the age of 35 conducted 70% more transactions at restaurants compared to other cohorts. This trend underscores the evolving preferences of younger consumers and their inclination towards using American Express cards for everyday purchases.
Squeri expressed confidence in the widespread acceptance of American Express cards, particularly among younger consumers who have acquired cards in recent years. With American Express being accepted at a growing number of merchants worldwide, younger cardholders are increasingly leveraging their cards for various everyday expenditures, contributing to the company's continued growth and success.
The insights shared by Squeri provide valuable perspectives on American Express's strategies for engaging and retaining younger customers in an evolving financial landscape. By understanding the preferences and behaviors of millennials and Generation Z, American Express has positioned itself as a preferred choice among younger demographics, setting the stage for sustained growth and profitability in the years to come.
