Gen Z (age 4-24) represents a fundamental break with every other generation in human history – they've never lived in a non-digital world. Their attitudes are very different to older generations and give us a sneak peek to what the future of human behaviours might look like.
Fast-forward ten years and Gen Z’s stature, spending power and influence will grow as they enter the workforce and their predecessors head into retirement. As the generation whose behaviours will reshape commerce over decades to come, their importance to global retailers is considerable/cannot be ignored.
Gen Z are demanding a revolutionized retail experience and organisations need to implement both immediate and long-term strategies that ensure they’re being heard, with attention to three key areas.
Be personal and authentic
In recent years, rapid urbanization, population growth, and the rise of mobile and online commerce has fundamentally changed the individuality of society. Over time, shoppers have swapped in-store experiences for the speed and convenience of shopping online. But more recently, we are seeing society come full circle. Gen Z consumers are placing a renewed focus on the individual and rekindling the one-to-one roots of commerce. For this consumer demographic, one size doesn’t fit all: Gen Z are looking for personal experiences that fit their
values and lifestyle and keep them excited.
Fused with the data that makes personalization possible, technology is powering the possibility of one-to-one customer experiences in the digital age. Mass consumer culture doesn’t sit well with a generation that is immersed in individual expression; retailers are moving away from talking to segments.
According to findings from the newly released Worldpay from FIS 2020 Global Payments Report, 60 percent of Gen Z believe that it is important for brands to value their opinion: tellingly, 35 percent feel favourite brand understands them as an individual. Gen Z have fostered a healthy sense of scepticism and so it is critical for brands to be authentic. Learning how to navigate the world in the era of “fake news” and having their digital lives saturated with messages of questionable quality and authenticity makes Gen Z discerning critics. They’re driven to be authentic and recoil from brands that fail to adhere to their values.
Provide a mobile-friendly experience
Brands seeking to earn the favour of Gen Z will need to cater to their payment preferences. Like the generation itself, Gen Z’s payment preferences are more digital, more social and more mobile-focused than any other generation. Gen Z uses digital services and mobile wallets more frequently than their predecessors.
Over half use digital wallets at least once a month, three quarters use a digital payment app from financial service providers and others, while 79 percent use peer-to-peer (P2P) payment apps at least once a month. In general, Australia has one of the highest smartphone penetrations in the world, with mobile use projected at 84 percent of the population and internet penetration at 90 percent, according to the Worldpay from FIS 2020 Global Payments Report.
Accepting a range of smartphone-based digital wallets is vital to serve a generation that has largely bypassed using plastic cards as a payment method. Tailoring the right mix of digital wallet acceptance is key, as well: although globally recognized brands have a proportionally large share, digital wallets are resisting homogenisation with local and regional alternatives thriving around the world.
Innovate for a hyper-connected generation
Gen Z isn’t instinctively drawn to the same banking, payment and investment tools as their parents’ generation. They are drawn to financial products and services that deliver practicality and convenience. As digital natives, Gen Z consumers are also savvier on what companies can deliver, and increasingly expect the same level of experience regardless of whether they are shopping on Amazon, ordering a pizza, or liaising with their financial service provider.
From peer-to-peer (P2P) services that are increasingly being accepted for business-to-consumer (B2C) transactions, to direct debits; from checking to satisfy recurring payment arrangements, to purely digital banking services: Gen Z is ready and eager to engage with cutting edge financial services and payment innovations.
Alternative financing options that emphasize shorter flexibility—such as “buy now pay later” services find themselves fitting with generational need. According to the Worldpay from FIS 2020 Global Payments Report, these trends are on the rise in Australia with more than two million Aussies (or 1 in 10) using a buy now product between 2019-2020.
Establishing meaningful connections with Gen Z is a long-term approach, but one that requires focused attention. Merchants seeking success must explore how they can formulate and implement strategies with appropriate care, yet with the urgency that Gen Z increasingly expects.
Phil Pomfor is the General Manager for Global E-Commerce, APAC, Worldpay Merchant Solutions, FIS
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