Amex bets on millennials, Gen Z for growth


Emerging from the Great Recession, American Express was at a crossroads.

Executives were debating whether to knock down connotations of exclusivity by serving a broader consumer base, or double down on the premium card space and remain more exclusive.

Betting on its aspirational distinction, Amex opted for the latter, focusing on the notion “that if we put value in our value propositions, then our premium consumers will pay for that value,” Amex Chief Financial Officer Jeff Campbell said Feb. 15 at the Bank of America financial services conference

The next challenge: Step up efforts to attract younger generations. “When you’re looking to grow a business, you probably don’t want to grow it with people 60 and over,” said Brian Riley, co-head of payments at Javelin Strategy & Research. 

New York-based Amex sought to rejuvenate card benefits and digital capabilities, along with marketing and brand positioning. With card revamps, however, come higher fees: After a 2021 refresh, the company’s platinum card now carries an annual fee of $695. 

Despite that price tag, about 70% of Amex’s new cardholders last year acquired premium cards, which includes any of its cards that come with an annual fee. Millennial and Gen Z consumers made up three-quarters of that new group — a larger share than the company has seen in the last two decades, Campbell said.

Fending off the competition

Compared to rivals, the platinum card’s complex array of fee credits has been compared to a coupon book, said credit card consultant Jason Steele. Amex could risk making its value proposition “too difficult to realize,” he said.

Comparable cards include Chase’s Sapphire Reserve card or Capital One’s Venture X Rewards card. 

If Amex expects to attract younger consumers, it will need to demonstrate how its card benefits are valuable in their eyes and simple to access, consultants and analysts said.

To some degree, rivals have begun to put pressure on Amex’s premium corner of the market. “For a period of time, there was a perception that it was an aging brand,” said Goldman Sachs Analyst Ryan Nash.

While Amex doesn’t disclose the share breakdown of its cards, and such statistics weren’t available for other card companies either, there are data points that provide insights on cardholder demographics.

In the fourth quarter of last year, millennial and Gen Z customers were responsible for 30% of billed business in Amex’s consumer division, compared to Gen X generating 37% and baby boomers and older driving 33%, according to the company’s fourth-quarter earnings presentation.

Millennials were born between 1981 and 1996, meaning they’re mainly in their 30s, while Generation Z refers to younger adults born after 1996, who are under 27 years old, according to Pew Research Center.

Amex’s platinum card is its priciest with the nearly $700 annual fee, while the gold card comes with a $250 annual fee and its green card is $150 annually. The company also has co-branded cards that come with annual fees.

Strategy shift

In the past, Amex employed a “low and grow” strategy, bringing on young customers with no-fee products and tightly controlled credit lines, and moving them to fee-bearing cards over time. Realizing it was leaving money on the table, the company changed its approach several years ago, opening up premium cards to younger customers.

That shift was indicative of Amex “waking up and realizing we can pivot our value proposition and do a better job,” Campbell said during that recent conference appearance. Amex declined to make an executive available for an interview on the topic.

The company is pushing its aspirational connotation with younger generations. In one recent Amex commercial, a young woman trades a greasy spoon for finer dining, takes her parents to a Broadway show and opts for a Caribbean vacation over a Florida beach. 

The ad closes with the narrator asserting, “With Amex, it’s never a question of if you’re going to level up. It’s when.”


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