With every generation, consumer behaviors change. Gen Z (ages 18-24) and Zillennial (25-26) shoppers grew up online. Many don’t remember a time before the internet; their teenage and young adult lives have revolved around ecommerce and digital payment options.
Because young consumers are so reliant on the internet, their payment preferences are drastically different from older generations.
For instance, rather than going to a bank branch and opening a checking account in person, younger consumers prefer to do everything online. They want to download an app and manage their banking and spending from their smartphone.
As consumers return to brick-and-mortar stores to shop in person, merchants must be mindful of changing customer expectations. Younger generations don’t want to carry physical cards or cash. Instead, they want to shop around, find what they want and then use a digital wallet or app to pay.
The Importance of Payment Personalization
In our Payments Innovation Pulse Report, we found that half of consumers aged 18-24 (53%) and 25-40 (57%) and even 41- 56 (46%) use payment applications when shopping in-store.
As NMI Chief Product Officer Peter Galvin noted in a recent interview, “Right now, younger consumers prefer mobile and digital payments, and they expect these options to be available to them in almost all payment scenarios.”
Unfortunately, a reliance on technology can make it difficult for small- and medium-sized businesses to win customer loyalty - especially from younger shoppers. In an age of personalization, where social media platforms and ecommerce giants seem to know everything about your shopping preferences and tastes, consumers demand the same level of attention from the businesses they interact with daily.
McKinsey found that 71% of consumers expect companies to provide personalized experiences at every interaction, and 76% are frustrated when these expectations aren’t met. Young consumers insist that brands understand their shopping habits and offer payment options to match those preferences. Unfortunately, they are also willing to walk away from a sale if they can’t pay on their own terms.
“In today’s tough economy, every customer is critical, so businesses cannot afford to lose a sale,” Galvin said. “Implementing mobile and digital payments can help ensure that younger consumers always have a payment method available to them.”
To see Galvin's full interview and learn more about changing consumer payment trends, read the full article from eCommerce Times here.