Different generations have varying preferences when it comes to how they shop and pay. Therefore, it’s important for merchants to ensure their offerings are aligned with the demands of their target audience ahead of key dates like Black Friday and Cyber Monday.

In this blog, we delve into the shifting shopping and payment preferences that are set to shape the retail landscape this festive season – particularly those of Gen Z and Millennial consumers. 
 

The top payment preferences of younger generations   

The payment experience can make or break a sale. To maximise revenue during the peak shopping period, it’s important to have an in-depth understanding of the payment methods that are favoured by younger customers.
 

•    Traditional card payments: Despite the rise of alternative payment options (APMs), traditional card payments remain a cornerstone of consumer transactions. Gen Z and Millennials may be the most open to adopting APMs, but they still make traditional card transactions regularly. Globally, Gen Z consumers prefer debit over credit cards, with 45% using them for the majority of their payments. On the other hand, Millennials prefer credit cards with 65% globally reporting they have one; this is likely due to consumers in this age bracket worldwide wanting to build credit score and history for purchases such as buying their first house. Millennials are also most likely to have a card affiliated with an airline (14%) and retailer cards (25%) suggesting a desire for tailored benefits and loyalty perks specific to their habits and personal behaviour. Millennials prioritise experiences over things, so they make the most of the benefits that come with credit cards – blending lifestyle aspirations with financial strategy. 

•    Mobile wallets: With smartphones almost always in the hands of today’s consumers, there has been an increase in mobile wallet usage. This is a convenient, digital solution that enables consumers to make payments and manage their finances on their smart devices with just a few taps. It’s predicted that the number of digital wallet users will exceed 5.2 billion globally in 2026, up from 2.4 billion in 2022.  The younger generations are the biggest fans of mobile payments, with a Visa report revealing that in 2022 80% of Gen Z and 78% of Millennial consumers worldwide adopted mobile wallets. 

•    Buy Now, Pay Later (BNPL):  BNPL is surging in popularity as consumers seek flexible payment options during economic uncertainty. BNPL is an installment payment option that lets shoppers split purchases into smaller payments over time. Some people see the option as an attractive alternative to credit cards (which often include a longer application process). This year Juniper Research found that currently there are 380 million users worldwide. BNPL is mostly used by younger generations globally, with 42% of consumers aged 18 to 24 (Gen Z) and 43% of consumers aged 25 to 44 (Millennial) having used a BNPL service. Globally, merchants offering BNPL options have also seen up to a 40% increase in conversion rates, significantly boosting sales.

What all of this demonstrates is that today’s young consumers enjoy a variety of payment and shopping methods. Because of this, they expect seamless integration between digital and physical retail channels. As retailers prepare for the upcoming holiday rush, they must create an effective omnichannel experience to achieve customer satisfaction and loyalty among Gen Z and Millennials. 

Understanding and adapting to generational shopping preferences isn't just advantageous, it's essential. Merchants who align their offerings with these evolving consumer demands will be the ones that thrive this holiday season.