Generation Z – What the Payment Industry Must Know
Generation Z, born between 1995 and 2012, is primarily a work on progress. After all, some of the 23 million members are still toddlers.
However, the research already done on Generation Z shows they differ in many ways from Millennials. If the payment industry wants to do business with them it will have to get down pat the combination of characteristics making this generation unique in American history. They are not simply younger Millennials.
Business Insider aggregated and interpreted the findings of marketing companies and consultants trying to suss out the next generation. Among the researchers are marketing agencies Sparks & Honey, The NPD Group and Martin-Wilbourne Partners, consultants Millennial Branding and Internships.com and financial firm Piper Jaffray.
As the youngest members mature, they could wind up as different from the oldest members as the latter are from Millennials. At the current time, though, there are knowns. Here are the major ones and some of their implications for the payment industry.
Entrepreneurial, Not Hooked on Academic Degrees
Perhaps they noticed Millennial joblessness. About 72 percent want to start their own businesses, not have to hunt for jobs. Entrepreneurs, at least those who know what they’re doing, tend to have more flexibility in making a living than employees. That could mean they could wind up with a shot at, yes, making a good living. This could be a financially successful generation.
Also, only 64 percent are considering advanced academic degrees. What did in Millennials, especially financially, has been their blind trust in higher education. Too many wind up without employment and with five-figure or even six-figure student loan debt. Generation Z could escape much of that.
Therefore, Z, unlike Millennials, could have a lot of money to spend. Since they are totally digital, the payment industry, of course, has to provide the cool technology to facilitate how they pay. Special niche products and services might be created just for Z.
Since they are essentially post-word and rely on emoticons and emojis, those would be configured for that visual orientation. Design dominates. Everything from promotions to operational navigation would be visual.
Determined to Change the World
About 60 percent intend to make a difference and 25 percent already are volunteers. Only 39 percent of Millennials want to be change agents for the betterment of mankind. The payment industry will have to position and package commercial messaging oriented toward doing-the-right-thing. In addition, rewards programs would include options of donations to their causes.
Lifestyle Focused on Food and Beverages
Z members spend more of their money on the experience of eating and drinking instead of buying material things such as clothes. That means that earn-double-points programs would be oriented toward where food and beverages are purchased. Redemption options would include freebies in these two categories as well as discounts on cooking hardware.
The extended family of immigrant days is back. Members of generation Z are likely to live in a multi-generational household. That’s because of the coming together of a number of trends. Those range from economic uncertainty to the aging needing support services from the family. Unlike when Baby Boomers were young, this generation values the opinions of family authority figures.
Therefore, pitches have to be simultaneously created to attract the attention and trust of several generations: Baby Boomers, Generation X and Generation Z. The tone would have to be respectful for all their very specific values. Points programs could include incentives for doing business with those which provide services and products for the aging.
In addition, members of this generation may be the payment industry’s best ambassadors to introduce older potential customers to fresh approaches and the technologies which come with that.
Although Generation Z has its idiosyncratic traits, it still represents youth. Its oldest member is about 19 years of age. Youth, no matter the generation, seeks continual change. The payment industry cannot fall in love with one slogan, type of campaign, set of incentives or technology. That might already be a lesson it has learned. American Express, for example, has become diversified in not only its target markets but has also developed and changed the pitches to each segment, be they moms or Uber riders.