Consumer shopping habits and preferences, particularly Gen Z and Millennials, continue to evolve at pace. While these consumers are navigating the challenges of the cost-of-living crisis and inflation, it’s clear that they have serious spending power. It’s estimated that Gen Z and Millennials have over $360 billion in disposable income, more than double what was estimated three years ago.
Shoppers are continuously prioritising convenience which in turn is leading to a steep rise in mobile commerce - something we recently saw reflected in our State of Retail report with Clearpay. Over the past year, a staggering 82% of online transactions using Clearpay from Millennial and Gen Zs were made on mobile.
With more consumers opting for mobile shopping, fintechs need to deliver on frictionless payments, making sure that retailers and businesses have the tools to deliver a seamless shopping experience and drive business customers' preferred purchasing channels. This allows retailers and small businesses to maximise opportunities with their key consumers, ensuring organisations are prepped as we head into the busy holiday shopping season.
Capatilise through popular shopping channels
With mobile and social shopping, Gen Zs and Millennials are used to making a purchase within just a few clicks. Whether it’s via TikTok shop, or via a sponsored post on Instagram, a lot of this can be attributed to the rise in influencers, using their social platforms to engage customers and encourage them to check out new brands online.
Both groups have also been accustomed to receiving immediate responses and having all the information they need at their fingertips, a result of growing up in a highly connected, digital world. They expect to be able to purchase a product as soon as they see it advertised on numerous social media platforms by their favourite influencers.
Whether it’s on Instagram or TikTok, Gen Zs and Millennials are pre-ordering with increasing frequency. Referring back again to our recent data with Clearpay, we found that customers currently spend 2.3x more on pre-orders than the average online purchase through Square.
Having an omnichannel approach is all about establishing a holistic form of engagement, appealing to customers seamlessly across all marketing channels — offline, online and mobile. As a result, omnichannel loyalty programmes not only increase the number of touchpoints a company can have on the next generation consumers, but also improve the overall reward experience.
To offer a seamless client experience, fintechs need to prioritise a smooth and frictionless mobile shopping experience that's accessible across a variety of digital sales channels - be that WhatsApp, chatbots, online marketplaces and more.
Breaking down generational barriers - BNPL
The next generation also prefers flexibility in how they pay for an item or service. A report by PYMNTS highlighted that one in four Gen Z shoppers won’t buy a product if buy now, pay later services are not offered.
Gen Z has continued to adopt mobile payment solutions including apps and e-wallets like Apple and Android Pay. Because they want to be able to pay whatever, whenever, and with whatever platform or device they choose, traditional payment and POS technology must stay up and be able to accommodate these different payment alternatives. Businesses can reach more consumers by offering more convenient payment methods.
Delivering on frictionless commerce
One bad payment experience is enough to push both businesses and consumers into the arms of a rival retailer. Studies have found that Gen Z are likely to abandon their purchase if their preferred payment method isn’t available.
Merchants need a reliable partner who understands these generational differences. Because, while Millennials and Gen Z have certain financial commonalities, they also differ in a plethora of minor ways, including their reaction to new possibilities like BNPL and crypto, their dislike of account creation procedures and overall brand loyalty. Merchants that notice this and modify their procedures properly will be the ones who prosper.
Elevate the shopping experience
Mobile commerce transactions will continue to grow as digital wallets become a standard part of payments and shopping features are integrated into social media platforms. To remain competitive and appealing to consumers, merchants and payment providers will need to work on optimising websites and payment solutions for their businesses.
With economic uncertainty still on the horizon, retailers need to be doing everything they can to not only benefit from consumers' current desire to spend, but also put measures in place to help combat the challenges the industry is likely to face over the winter months. A method to expedite this is looking at new forms of payments and maximising opportunities through popular shopping channels regularly explored by the fearless next generations.