To achieve growth and success past 2030, businesses must start to understand the living, shopping and financial habits of Gen Z or Zoomers – consumers aged between 16 and 24 –now and accept that they are very different from previous generations.
The warning comes as global payments platform Thunes publishes the results of a global survey of 6500 Zoomers from across the globe to ascertain how they live their lives – and what that means for retailers and other customer-facing businesses.
According to the study, this demographic, who never knew life without the internet and smartphones, currently represents the largest population group on earth. Members of this age group account for almost 2.5 billion people, surpassing Millennials in 2019.
The study shows that Gen Z does things very differently. Most prominent is the fact that Gen Z is influenced by social media more than any other generation. Some 80% said they use social media on multiple occasions throughout the day. Three-quarters of Zoomers also check in multiple times each day in emerging markets, with two-thirds stating that they have purchased products they first discovered online.
Not only is social media where Gen Z spend their money but increasingly where they are making it too, with a growing range of content monetisation options offered by TikTok, YouTube, Patreon, Clubhouse, and Twitch.
Zoomers are also keen online shoppers, spend a slightly larger proportion (19%) of their money online shopping than they do on socialising, eating out, and entertainment – this is the case in developed and emerging markets.
When it comes to paying, Gen Z has little enthusiasm for traditional financial products – be it bank accounts or credit cards. Some 62% of them don’t have any bank account at all. Mobile wallets are however growing rapidly and in some emerging markets, almost 50% of Zoomers now use this type of account.
As a result cash is down, but not out. About a quarter of Zoomers in western markets almost never use cash. Physical currency remains important in offline spend in emerging markets, but its influence is in decline. This is not surprising given the choice and accessibility of digital tools.
Interestingly, one of the most important drivers for Zoomers considering purchase and payment methods is brand trust – it became the #1 factor for choosing a primary payment method in 7 countries. This is the case in Western and emerging markets. User experience was identified as the second most popular factor, which, in an online world, affects loyalty too.
Thunes CEO Peter De Caluwe comments: “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”.
He adds: “We knew that social media would be a key part of a Zoomer’s daily life, but what our survey helped to reveal is the extent to which they are driving spending activity in this demographic. Another important aspect of their lives that we wanted to explore is their relationships with money and their affection for mobile-driven payment methods. As a company that embraces the diversity of Payments and builds the next-generation Payments infrastructure for the world, we will use these insights to shape our Payment capabilities and solutions for the large group of the Internet businesses that we serve.”
Mobile wallets are gaining traction, particularly in emerging markets where bank accounts have been historically difficult to access and financial exclusion is widespread. Mobile providers have led a digital payments revolution in Asia, while in Africa, the major telecoms providers have offered similar digital payments solutions.
As the world moves online, social media, content and entertainment platforms, payment providers, and consumer brands looking to capitalise on Zoomers and their online spending habits must consider all the factors above. Gen Z will be influenced first, not by price or even range or scarcity, but by their social circles, brand engagement online, and trendy, convenient, trustworthy payment options.
De Caluwe concludes: “Failure to recognise the imminent influence of the digitally native Zoomer could result in a once perfectly shoppable brand witnessing slipping sales.”