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The way that people pay for goods and services has changed across the globe over the last 2 years … [+]
The way that people pay for goods and services has changed across the globe over the last 2 years and this applies across all demographics, yet Generation Z stands out. This demographic, who never knew life without the internet and smartphones, currently represents the largest population group on earth with an estimated spending power of $360 billion.
The global payments platform Thunes conducted a world-wide study into Generation Z’s shopping, social, and payment preferences. They interviewed 6,500 people between the ages of 16 and 24 from 13 developed and emerging countries around the world.
The survey spotlights how the world’s youngest and most digitally-adept consumers are forcing change to decades-old business practices.
Understanding Gen Z
The key findings from the survey spelt out that to achieve growth and success past 2030, businesses must start to understand the living, shopping, and financial habits of Gen Z or Zoomers right now – and accept that they are very different from previous generations.
- Social media consumption: Social media is part of Gen Z daily life and is increasingly driving their economic activity. 8 out of 10 said they use social media on multiple occasions throughout the day. 7 out of 10 said they have purchased products they discovered on social media, such as Facebook and Tik Tok.
- Paying the bill: Cash is on the decline, but still relevant. Mobile wallets are gaining ground: in 5 out of 13 surveyed countries, it is the most popular payment method.
- Shopping habits: Zoomers are a generation of shoppers. In all of the surveyed markets, shopping accounts for the single biggest share of their spending – ahead of entertainment, events, and eating out.
Zoomers are living their lives online – and they expect the brands with which they interact to accommodate that.
Thunes CEO Peter De Caluwe said: “To many, Gen Z is a misunderstood and overlooked generation. This is a generation to which “dial-up” and “desktop” are meaningless words and who don’t just think “mobile-first”, but live and breathe in apps, social media, digital platforms and soon – the metaverse. We should start to take this generation seriously as the revenues and strategic plans of many businesses – especially those that are relying on fast growth – are dependent on them”.
It was further discovered that Gen Z not only spend their money on social media, but are increasingly earning money there too, with a growing range of content monetisation options offered by TikTok, YouTube, Patreon, Clubhouse, and Twitch.
Mobile wallets and a decline in physical cash
Gen Z, according to the research, has little enthusiasm for traditional financial products, be it bank accounts or credit cards. Thunes found that mobile wallets are growing rapidly and in some emerging markets, almost 50 percent of Zoomers now use this type of account, while 62 percent of Gen Z’s don’t have any bank account at all due to their heavy dependence on mobile wallets.
The report also noted that about a quarter of Zoomers in western markets almost never use cash. In emerging markets, physical currency was found to be relevant in offline spending albeit at a decline. This factor was attributed to the growing accessibility of digital tools promoting cashless transactions.
De Caluwe warns, “failure to recognise the imminent influence of the digitally native Zoomer could result in a once perfectly shoppable brand witnessing slipping sales.”
Impacted by financial crisis of 2008—which hit squarely during childhood for many Gen Zs—they value financial security. They are more apt to shop for bargains and fear over-reaching with expenses. Between the growing accessibility of remote work and a desire to live frugally, many experts also see this generation as increasingly more likely to live in small towns, and shop at the businesses located there.
A zoomer sharing what they like about a small business has far-reaching potential – small businesses need to drop traditional marketing methods and tap into what makes Gen Z tick if they want to get their attention.