SYDNEY: Two thirds of Australian millennials believe brand loyalty programs help keep customers loyal, according to a new report, which advises that programs need to evolve to meet this generation's needs.

The study from strategic loyalty consultancy Directivity reported that the majority of Australians (82%) are members of some sort of retail loyalty program, with the average number of memberships being 3.9.

And while only 57% thought these were essential to drive brand loyalty that figure rose to 68% among millennials. The latter group, however, has rather different expectations to older age groups, B&T reported.

"Interestingly, Millennials have a stronger desire for non-transactional methods of being rewarded such as travel and entertainment experiences as well as being rewarded for interacting with the brand, not only transacting," Adam Posner, CEO of Directivity, explained.

"Specifically for Millennials, loyalty programs need to evolve to reward them for interactions such as sharing on social media, writing reviews, completing surveys and even loyalty games or gamification are highly regarded by them," he said.

Most of those activities are digital but most people still prefer to have a traditional loyalty card for interaction with a program rather than a mobile app (68% v 16%), although the latter is gaining ground (up from 10% last year).

The study also looked at how members would be affected if programs closed down; more than a third (36%) felt there would be no impact on them.

"This is a reality check for owners of programs and a warning sign that programs are just not meaningful enough to have an impact" said Posner.

But while many consumers said they don't feel particularly strongly about such programs they do influence their shopping habits: 31% members said they wouldn't buy as often if a program closed, while 23% wouldn't buy as much.

Coles flybuys program retained first place in the Top 10 unprompted most mentioned programs as "doing a very good job" (36%).

Data sourced from B&T Magazine; additional content by Warc staff