The New Generation of Spenders

To Baby Boomers, Gen-X, and even Millennials, Gen-Z are considered to be the digitally native generation who were born into the laps of the internet, with a mobile phone in their hand. The pragmatic nature of Millennials has coined them as experimental with new technologies, seeing many engaging with financial services embedded into social media apps, and trying technologies in numerous digital channels including neobanks and the metaverse. Logically, as Millennials have greater spending power compared to our younger consumers, they are leading the adoption of digitally-driven payments and services – showcasing their desire for seamless shopping experiences. In addition to the seamless experience, they seek savings and discounts through loyalty apps and show no hesitation to explore social media app shopping.

Attitudes to finance and banking?

The economic climate has undoubtedly impacted the experience of any end-user, and Millennials first entered the job market soon after the recession, to build their finances. Comparatively, Gen-Z has grown up in the recession, watching their families in the early 2000s struggling with high interest rates and costly expenses. Consequently, 81% have said that money was a major stress factor, and 33% see personal debt as a source of anxiety. The economic stance during the formative years of our influential shoppers has moulded their experience with finances, banks, and financial management. Whilst both generations are keen to make practical and effective financial decisions, the way in which they choose to access financial services has veered away from the sole use of traditional institutions for a number of reasons. One of the top reasons for Gen-Z and Millennials’ use of non-traditional financial institutions is their growing demand for more customer-centric service provisions which cater to faster, more convenient, and flexible services which can be accessed 24/7. Additionally, both generations hold concerns over the rigid terms of a traditional bank account – as younger generations hold minimal, and sometimes poor, credit scores. And with alternatives to traditional banking, such as neobanks, digital coins, and NFTs, the future generations are pursuing a more digitally native future, away from the confines of blanket financial services, and turning to personalised services that offer banking functionalities at a higher level. And so, our digitally evolving landscape is supported by the ageing populations of both generations who are now reaching influential positions with disposable income, careers, and knowledge that will influence the financial industry. 

Where can we find the tech-savvy shoppers?

Despite their adversity to ‘simple’ finances and traditional banking, the switched-on generations have formed spending habits on fast platforms (such as retail apps, e-commerce platforms, and social media) where they can satiate quick purchasing, on the go. Having grown up around smartphones and social media, neither Gen-Z nor Millennials shy away from opportunities to explore new brands — however, they do have a shorter attention span. With the average attention span of eight seconds, brands are grappling with the opportunity to be seen by our young shoppers through targeted ads and short-form content on social media platforms such as Snapchat, Instagram and TikTok. 

In recent years we have witnessed exponential growth in social media influence – with influencers promoting brands, newsworthy items, meme culture, and beyond. And more recently we have seen the introduction of social media commerce — where e-commerce businesses make their goods and services available on social media platforms to widen their brand audience and customer reach. The worldwide revenue of social commerce was valued at 724 billion USD in 2022 and is predicted to surpass six trillion USD by 2030. TikTok shop has been swallowing hours of our time, with short videos that offer product promotions, brand engagement, influencer knowledge, and quick sales. Social media platforms, much like TikTok have risen in popularity with end-users but also businesses as they can effectively reach their target audiences in an engaging and personalised manner that encourages mutual interaction and spending. Its success is in the statistics as a survey shows that 55% of Millennials and 48% of Gen-Zs are likely to make a purchase directly through a social media platform in the next 12 months. 

Our savvy shoppers can also be found spending and investing in the metaverse, with younger generations building their knowledge from various areas of the metaverse. For instance, popularity in streaming/gaming services, virtual reality, augmented reality, digital currencies, and virtual experiences to support relationships and cultural experiences have become popular to both generations and segway them seamlessly into the metaverse. Deloitte’s 2023 Digital Media Trends study showed that those between 14-40 years of age (Gen-Zs and Millennials) feel that experiences in digital spaces are important for socialising and building a sense of community. And close to 50% of both generations claim to spend more time interacting on social media than in real life, and 40% claim to spend more time socialising in video games compared to real life.

How can brands effectively engage with Gen-Z and Millennials?

The powerful question lies in how businesses can reach our digital shoppers with notoriously short attention spans. As noted above, their preferences in digital experiences and non-traditional ways of shopping are a great opportunity for any brand if harnessed correctly. 

1. Be honest about your brand and products: Gen-Zers are particularly known for their affiliation with conscious brands who align with their personal values and views. A study showed that 86% of students would rather choose a company that is ethically focused, even if there are fewer incentives. Moreover, when winning over the younger generations, caution should be taken not to break trust, as both generations grew up in financially strait times which has formed habits of cautious financial spending and lower trust rates. The proof? 60% place higher importance on digital first impressions compared to in-person ones.
2. Leverage technology: Both generations are more financially aware than previous generations, and so they look for practical solutions to help them spend most efficiently and offer returns that support their longer-term goals (such as savings and investments). Both Millennials and Gen-Zers want to feel in control of their finances and decisions – and the most optimal way to give them that control is through what they know best: digital technology. Their expectations are high, so brands should be sure to create an engaging environment that offers a seamless customer experience, that is supported by personalised customer service when required. AI, chatbots, data-collation, etc. can be leveraged to streamline your brand experience for our shoppers with high standards. 
3. Personalised targets: Millennials, in particular, respond well to deals and offers with brands, particularly with coupon codes, social media posts, and email traction. Technologies have the potential to provide merchants with in-depth data analysis of shoppers, allowing them to better understand the trends, behaviours, and wants of consumers, which is imperative to effectively reach both generations. Salesforce showed that 74% of Gen-Zers and 67% of Millennials are interested in personalised products.
4. The right payment methods: With lower credit scores and cautious spending of disposable income, younger consumers want the option to spread costs and better manage their cash flows. Brands that optimise their payment methods at checkout can reduce the percentage of cart abandonment, and engage with a global customer base. The average cart abandonment rate as of 2023 sat at 70.19%, with mobile cart abandonment being even higher at 85%. A seamless checkout experience that is tailored to the audience and brand is important to offer shoppers the greatest convenience and appreciation for their purchases. And with the continual advancements in payments technology, digitally-savvy customers will continue to find more convenient ways of shopping. 

It is important to look ahead to new payments in order to remain competitive and relevant to consumers. For many brands, they don’t have the time or additional resources to expend on conducting the research and development of technologies to support better engagement with their customers. And that’s why Unlimit supports business with safe, fast, and convenient expansion through our API integration that helps you to scale your business and reach your target market. No matter where your customers are, which generation they come from, or how they like to shop – Unlimit’s payment technologies help businesses to accept payments in a myriad of currencies and through several processing solutions.