While baby boomers and GenXers enjoy the benefits of digital technology over analogue in some aspects of their lives, it is millennials and particularly GenZers that are fully plugged into the information age. Those born after 1997 have grown up with technology touching every area of their existence, and it is their innate ease with the digital world that is shaping shopping and payment trends today.
Never has the mobile phone been so ubiquitous, whether it’s for communication, for health tracking, for navigation or for making purchases. For GenZ consumers, the smartphone is the gateway into their digital life, and they are rarely without it, but it would be a mistake to think that it is also the only channel through which they shop.
Shopping instore
A recent study by PWC ‘Generation Z is Talking. Are you Listening?’ found that GenZ consumers visit stores more frequently than any other age group, with 59% saying that they go to a store at least once a week. Once in the shop however, more importance is placed on the use of technology to assist with their shopping journey, with 20% of respondents in the study saying this would improve their in-store experience compared with just 14% of those aged over 35.
Given that convenience is also essential to this young cohort, checkout processes need to be fast and hassle-free. For GenZers, this does not just mean contactless payments, but contactless using their smartphones and smart watches. A Logica Research survey last year found that while 37% of GenZ shoppers are still using cash today, this is likely to decline as only 22% say they will continue to use cash, while use of mobile payment apps for in-person payments is expected to rise from 5% today to 19% in the future.
Digital payment options
These trends underline the importance of speed and efficiency. GenZ shoppers are as comfortable making a purchase on their mobile phone as they are in a physical store, but a vital part of emulating that online experience means eliminating checkout queues and delivering digitally connected payment options. The PWC research found that 31% of GenZers said their in-store experience would be improved by having quick and easy payment methods.
Digital wallets, including Click to Pay or Apple Pay have revolutionised checkout efficiency, with customer data stored in the app, allowing the process to be completed in a few seconds. Our own Computop NFC (Near Field Communication) technology can also enable payment transmitters to be attached to price tags or in shop windows, which means the checkout element of the shopping journey can be completely cut out, further speeding up the process.
Amidst all this talk of smart devices, it’s important to note that the humble debit card is still the most popular in-person payment type for GenZ shoppers according to Logica Research. Linking debit cards to phone banking apps is convenient, and for young consumers who prefer to save rather than get into debt, debit cards are a safe option.
BNPL encourages GenZ shopping
For retailers, there is another option for pleasing GenZers that is rapidly growing in popularity – Buy Now Pay Later (BNPL). A survey just published by Student Beans has found that 42% of 16-24 year old shoppers used BNPL last year to help spread the cost of their purchases. They value this form of credit, which in most cases is interest free if the account is paid within an agreed length of time.
Respected retailers including Marks & Spencer, Halfords and Anthropologie are now offering BNPL as an option at their physical stores, benefiting from increased sales from young consumers who believe they can make the purchase if they don’t have to pay everything upfront.
This snapshot of the buying behaviours of our youngest customers illustrates the importance of fast and straightforward payment processes that support, rather than detract from the shopping experience in-store. GenZers are avid omnichannel consumers, as comfortable purchasing on any digital device as they are on the high street. But the importance of the smartphone cannot be underestimated. This means that payment functions must be seamless across all channels and incorporate security standards such as PSD2. Retailers that deliver a digitally enabled service regardless of where their GenZ customers are shopping are those that will thrive in the future.
By Ralf Gladis, CEO, Computop
