Mahmoud Abdelkader, CEO and co-founder of very good security.
Gen Z has a unique relationship with money. After watching the financial struggles of millennials, Generation X, and the baby boomers that came before them, Generation Z (generally accepted as being born between 1997 and 2012) have amassed considerable savings: more than $360 billion, a staggering amount given that the youngest of this generation members are just 10. While this means they have money to spend, retailers will need to build and protect the trust of a very skeptical generation.
Gen Z buying patterns are increasingly driven by quality and authenticity over marketing, and their familiarity with technology means they’re ready and able to dig up the facts. While they are more likely to love brands they trust, that loyalty diminishes if a company breaks it.
The way Gen Z likes to pay is also markedly different from other generations. They are more likely to use alternative methods such as buy now, pay later (BNPL), cryptocurrencies, and peer-to-peer payment services such as Cash App, PayPal, and Venmo, rather than traditional credit cards or store cards.
This reflects a trend among consumers in general who have shifted their purchasing and payment behavior towards digital experiences during the Covid-19 lockdown. Eighty-five percent of consumers plan to continue using the digital channels they adopted during the pandemic in the future. For Gen Z, this includes contactless payments, curbside pickup, and purchases within social media, to name a few.
Risk in a digitally changed world
The continued purchase prioritization of digital shopping and payment experiences, such as online banking, grocery ordering, and restaurant delivery, marks a permanent shift in how American consumers as a whole now shop. It also places greater importance on a seamless online payment experience. But this change also marks a simultaneous rise in cyberattacks, particularly on personal data.
In fact, according to FBI records, cyberattacks on personal data increased 400% in 2020, just as the majority of American consumers switched their shopping and banking online. That number continued to rise in 2021, with businesses experiencing 50% more cyberattacks per week.
As the demand for online retail grows, companies face a paradox: meeting the insistence of younger consumers, such as Generation Z, on personalized and integrated checkout experiences, often driven by data, while demonstrates that customer data is secure and that online security standards are met. place.
Trading of personal data for a better user experience
Gen Z is extremely private when it comes to their data, so while increased digital connectivity during the pandemic has led to a general rise in concern about the security of personal data across generations, Gen Z is the most cautious of all. And yet, there is a paradoxical willingness on the part of younger generations to store payment credentials online in exchange for a more seamless checkout experience.
For companies that can convince Gen Z digital-native consumers to share their personal data, the payoff is significant. For authentic and transparent brands, this could result in better capture of loyalty from the generation that is anticipated to be the largest population of US consumers by 2026. But it all depends on whether the retailers that collect the identifying information (PII) are transparent about data collection. , how they use it, and how they keep consumers’ personal data secure.
Building trust with Gen Z customers will determine which retailers come out on top in the next five years. As the purchasing power of Generation Z grows, companies must continue to work to earn their trust and business by creating a seamless customer experience that includes clear and strategic data security practices.
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