Retailers, take heed of Generation Z’s desire for convenience in processing payments.
Without offering frictionless payments and a comprehensive set of system tools to meet the demands of this up-and-coming generation born between 1997 and 2012, retailers can say goodbye to Gen Z as customers.
As if catering to ever-changing consumer shopping trends was not already challenging, the Gen Z shopping mindset can be elusive and confusing. If you spend some quality time studying industry reports on what retailers must do to attract Gen Zers’ attention and close transactions, you might well be left scratching your head over how to meet their wants and needs.
For instance, some reports call for providing Gen Z shoppers with unique in-store experiences, relevance, and newness while shopping. The Gen Z population is careful about spending habits, declare other reports.
Much of those strategies are applicable to all shoppers in the new omnichannel landscape. But successful retailers must find clarity to get Gen Zers on board.
Payment Choices Essential
Gen Z shoppers want authenticity. Being young, they do not hurry to build brand loyalties. They expect value in your brand. Not finding any, they will shop elsewhere. Retailers targeting this buying category need to:
- Focus on social media advertising
- Truly understand Gen Z culture
- Take a stance on social issues
- Offer buy now, pay later (BNPL) purchase options
From that list of what Gen Z shoppers want, perhaps the most necessary is what payment options a retailer provides.
Gen Zers do not balk at paying more for sustainable products or from brands that share their social and political views. But without providing convenient payment methods, retailers are conducting a losing proposition, suggests Greg Cohen, CEO of payments and commerce technology platform Fortis.
“To meet these new demands head-on, retailers must invest and improve their overall checkout experience by providing an all-encompassing set of tools that not only offers frictionless payments but also split payments and a streamlined checkout process to meet Gen Z’s desire for convenience,” he told CRM Buyer.
Payment Part of the Journey
According to a 2020 study by Fiserv, 70% of Gen Z shoppers still planned to choose contactless payments after the pandemic because it is simple. Businesses need to prepare for the new payment demands expected to follow suit.
It is all about customer engagement that leads to making a purchase. That process needs to be embedded in the entire journey, according to Cohen.
Retail is not a one-stop shop. The world of software and payments has become very verticalized, he offered. Take, for example, restaurant software. You might have restaurant software made specifically for pizza parlors, versus Chinese restaurants. You see that same evolution in almost every vertical.
A second trend will be the winners of the core systems that are much more open architecture, added Cohen. This lets retailers plug in some of these value-added pieces to their existing systems to meet the customers where they are.
Plenty of software platforms try to own every piece of an ecosystem. Opening that ecosystem allows for more players to conduct transactions in their specific markets. That is why retailers must research the wide variety of payment tools that are available, he advised.
Simplicity and Convenience
Gen Z consumers differ from other age groups primarily by their insistence on getting speed, contactless, and wallet payment forms, according to Tom Tucker, president of Americas at Till Payments.
“These include Apple Pay/Google Pay and Buy Now buttons. Buy now, pay later is the biggest in this group,” Tucker told CRM Buyer.
The experience is imperative, he added. Security is not their biggest concern. Stored credentials for faster checkout are table stakes.
Fiserv’s study showed that most Gen Z shoppers plan to use contactless payments after the pandemic because it is simple. Businesses need to prepare for the new payment demands expected to follow suit,” he reiterated.
“UIs need to be simple and have minimal interaction required of the consumer,” he added.
How retailers do that preparation is rather straightforward, he suggested. Update all user interfaces for one-click and wallet payment types.
“Gen Z and Gen Y grew up with the internet and have the most need for wallets, BNPL, and mobile technologies. Gen X and boomers are adopting quickly but are slow to move. Covid helped push them forward dramatically by two to three years,” Tucker said.
Zoomers’ Mobile-First Mindset
Marketing to Gen Z is much different than other age groups mainly because they are the first generation to not know life without a screen in their hand, observed Kristin Dorsey, vice president of marketing at CRM software firm Linc.
“As a result, Zoomers expect a mobile-first customer experience and digital ads are not as effective because they have learned to tune them out. Gen Z does not want to feel sold to, which is why more brands are prioritizing educational content, influencer marketing, earned media, and building communities over large ad buys,” she told CRM Buyer.
That scenario is the foundation for how businesses should prepare for new payment demands to meet Gen Z’s unique buying situations, Dorsey continued. This mobile-first mentality means businesses must stay up to date with the latest cashless and contactless payment options to create an ideal customer experience.
“Gen Z favors mobile payment methods over cash — and even debit or credit cards — much more than previous generations. The convenience of touchless digital payments like Apple Pay and Google Pay is one big reason why, along with concerns around spreading germs using cash and cards,” she explained.
Plus, having grown up after The Great Recession, they are more skeptical of traditional financial institutions and their products. That is why businesses need to stay ahead of new alternative financing options like BNPL, she concluded.