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In order to attract the next generation of consumers, retail stores will need to adapt and put an even bigger focus on the shopping experience – where payment solutions play an important role. Here are some of the clearest examples of how Generation Z, born after 1996, will shape the future of retail.
Over the past 20 years, the retail industry has gone through big changes in order to adapt to Millennials – the generation born between 1980 and 1996 – and many companies are still struggling to adjust to their demands for digitalization, personalization and flexibility. Now, however, we are seeing the emergence of a new generation of consumers who are posing an even bigger challenge for retail: Generation Z
Generation Z is shaping retail
The oldest members of this generation, born between 1996 and 2010, have barely entered the workforce but already by 2020 they are expected to make up 40 percent of all consumers in Europe and the US. What sets Generation Z apart from its predecessors is that they grew up with the internet, social media and smartphones. As a result, these “digital natives” have a different relationship to technology that impacts both how they like to shop and how they prefer to pay. According to a study carried out by Accenture this generation is expected to be the first one to completely abandon the traditional wallet for mobile payments.
But even though they love their phones, these young people haven’t given up on brick-and-mortar shops. According to Accenture’s study, a majority of Generation Z actually prefer to shop in retail stores. The difference between them and earlier generations, however, is that Generation Z values the shopping experience more and tends to make instore shopping a multi-channel experience. While in the store these customers are much more likely to use their phones to do everything from comparing prices and reading reviews to communicating on social media and also actually paying for their products.
New technology attracts younger customers to stores
For Generation Z, combining shopping and new technology doesn’t end with smartphones. Last year, Tata Consulting Services carried out an interesting survey that pointed out how “shopping innovations” could be used to attract these young customers. According to the survey, Generation Z is a lot more interested in using technology like virtual reality, augmented reality and interactive screens when shopping in regular stores.
Another way to attract this group turns out to be innovations connected to how the purchase or payment transaction is carried out. For example, 55 percent of the respondents in the study said that they would use smartphone self-checkout if that was offered in a store. This type of service has already been tested in stores, the most notable example being the cashier-less Amazon Go store in Seattle. Considering the positive attitude that young consumers have towards this technology there is reason to believe that other retailers will follow Amazon’s lead and abandon traditional checkout counters.
Bambora makes it easier to focus on the shopping experience
For Generation Z, interactive and innovative shopping experiences seem to be one of the most important factors when deciding where to buy. They want a shopping experience that is both quick and easy and because of this the technology they use to make a purchase can be as important as the product they’re actually buying.
For you as a merchant, attracting these customers means creating a shopping experience that is focused on flexibility and that incorporates smartphones in one way or another. Offering mobile payment methods in stores is an important first step, but in time most merchants will also have to adopt an omni-channel strategy. If the customer chooses to try out an item in store and then buy it online, or the other way around, the goal must always be to make the experience as seamless as possible for the customer.
At Bambora we put a lot of emphasis on satisfying this demand for ease and simplicity, which is also mirrored in our offerings to merchants. A good example of this are the functions and payment methods we offer through our card terminal solutions. Besides being among the fastest on the market, our terminals are also equipped to accept a large variety of different payment methods. In addition to card payments, they allow you to offer invoice payments directly integrated in the terminal and they are also equipped with NFC (Near Field Communication) technology. Through NFC technology you can create a much smoother shopping experience and reduce lines by offering quick contactless payments, either through the customer’s card or through popular mobile payment methods like Apple Pay, Android Pay or Samsung Pay.
As a customer of Bambora, we help you provide Generation Z with the quick, flexible, and mobile integrated experience they strive for when shopping in-store. As payment experts, Bambora also takes part in leading the development of new payment methods. Our goal is to help you as a merchant to stay one step ahead and take advantage of the new technologies and new solutions that customers demand.