Are Millennials’ Shopping Behaviors Today, Everyone’s Shopping Behaviors Tomorrow?
Much has been made of the impact that the so-called ‘Millennial generation’ (aka Generation Y) will have – or is already having – on the way financial services are developed and delivered. And plenty of (digital) column space has been dedicated to discussing how the first digital native generation is transforming commerce – and payments – with different expectations, preferences, and shopping behaviors than their older cohorts.
The largest generation in history is becoming the primary demographic within the global workforce, so it’s interesting to look at how millennials’ behaviors and preferences will influence – and eventually transform – the behaviors and preferences of the broader population.
Millennials as early adopters
Tech-savvy millennials are 2.5 time more likely to be early adopters than older generations, but bear in mind that they are early adopters, not the only adopters. Soon enough, they will be followed by the early and late majority, making up the mass of consumers in all generational groupings. Maybe it’s time to stop talking about millennials’ expectations in commerce, payments, and banking, and simply acknowledge that by 2020, these will be the baseline expectations of the vast majority of the population.
Look no further than Facebook for evidence of this effect in action. The social networking site may have grown out of a college dorm room, but it took only a few years for Facebook to become a standard communication tool for baby boomers. Figures from 2014 showed that the fastest growing demographic on Facebook was in fact the 55+ group (80.4% 2011-2014).
So if the preferences and behaviors of Millennials today can be extrapolated upon, and older generations will follow them, what does this mean for payments?
For starters, millennials – typically defined as those with birth years 1980-1999 – are typically more debt-conscious than previous generations, with nearly 70% preferring debit over credit cards. 62% are comfortable connecting payment information to retailer apps to speed up payment, 45% are comfortable with the idea of connecting payment information to wearable devices, and 44% would prefer to use phones instead of cash to pay for small items.
The implications of these figures are pretty clear as they relate to the need for genuine omni-channel solutions, however it’s also notable that three-quarters of all shoppers – and 81% of millennials – will abandon their shopping cart if a mobile site is buggy, slow, or prone to crashes. The standards that consumers now expect when shopping online are rising, and are highest amongst those who now hold the most spending power. On top of this, millennials have come of age in a Web 2.0 world, where customized and highly personal online experiences have become the norm. This extends to payments, with the desire to be able to complete a transaction with their preferred payment method, which varies hugely by region or country.
Merchants need look no further than the demands and expectations of millennials today, to know how they will need to cater to all consumers within the next 3-5 years. By 2020, the ‘millennial’ buzzword will have run its course, and all players in eCommerce and fintech will simply be focused on enabling consumers of every age to shop and pay when they want, how they want and where they want.
Related Blog Posts
How Italian Banks and Processors Can Capitalize on Digital Transformation
The European payments landscape is in an era of significant change thanks to PSD2 and other macro factors, but there is more than one way to deliver real-time and open payments to meet PSD2 requirements and its technical standards. Banks and processors must manage this alongside their own set of domestic challenges and opportunities.
Overcoming Cyber Threats to Payments Security
Recently, Gene Scriven, chief information security officer at ACI, spoke at NACHA Payments 2019 on the ever-changing landscape of cybersecurity. Here are a few highlights from his session, including the impacts of cybersecurity breaches, today’s emerging threats and the new strategies to keep your organization safe.
Removing Gender Bias and Enabling Women to Succeed in Leadership Roles
The recent UK Women in Payments (WIP) Symposium 2019 took place in London, recognizing unique leaders who help uplift women in the payments industry. Among those recognized was ACI’s Melissa McKendry, vice president, Retail Banking Implementation Services, who was honored by WIP as the 2019 Advocate for Women.
Regulating for Real-Time: The Role of Government in Payments Modernization
Dr. Leo Lipis and Craig Ramsey, Head of Real-Time Payments for ACI Worldwide, continue their discussion on real-time payments and the findings of the new white paper, Get More from Real-Time.
Payments and Fraud: The Paradox Twins
Digital commerce through web and mobile is where merchants predominantly experience shopper growth today. This has become a hugely important domain for their focus. It offers a means for international growth, new market penetration and a way to engage with shopper-hungry Millennials in their culture. Merchants frequently adopt a Digital-First, eCommerce-First or Mobile-First strategy to ensure full corporate buy-in to this strategy.
Open Payments Systems for Merchants: Don't Close Down Your Options
Remember “Open Systems”?
It was a big industry nom du jour in the 80s and 90s. Every IT system had to be open and therefore flexible and future-proof. Nobody can argue with the logic behind this; making systems easy to integrate with other systems, ensuring vendors could cooperate with one another; creating agility to improve time to market and drive down costs.
Issuing and Acquiring in a Real-Time and Open Payments Ecosystem – The Global Picture
Dr Leo Lipis and Craig Ramsey, Head of Real-Time Payments for ACI Worldwide, continue their discussion on real-time payments, stemming from the findings of the new white paper, Get More from Real-Time. See part one.
Why It’s Time for Women to Rise UP
As a senior software engineer at ACI Worldwide, Rawan Shawar helps to guide her team’s priorities and enhance processes at both the team and organizational level. Recently, Rawan was selected by the organizers of Money20/20 Asia to be part the Rise Up Class of 2019.
Can Digital Payments Be Kind?
There is no doubt that the era of less (or minimal) cash is truly upon us. According to the Access to Cash Review, cash could fall to just 10 percent of all payments in the UK within the next 15 years.
Other countries, such as Sweden, have already seen significant changes – cashless payments have grown so quickly that only 10 percent of the 20 SEB banks in Stockholm now hold cash. Beyond Europe, China is leading the way with USD$12.8 trillion in mobile payment transactions in 2018.