by Mahmoud Abdelkader, CEO & Co-Founder Very good security.
getty
Gen Z has a unique relationship with money. After watching the financial struggles of the millennials, Gen X and baby boomers who preceded them, Gen Z (generally defined as those born between 1997 and 2012) have saved up quite a bit: more than $360 billion—a staggering amount given that the youngest of this generation members are only 10. Although this means they have money to spend, retailers will have 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 are ready and able to discover the facts. While they are more likely to be enthusiastic about brands they trust, that loyalty diminishes if a company violates it.
How Gen Z wants to pay is also significantly different than other generations. They are more likely to use alternative methods such as buy-now, pay-later (BNPL) solutions, cryptocurrencies and peer-to-peer payment services such as Cash App, PayPal and Venmo, rather than traditional credit or store cards.
This reflects a trend among consumers as a whole who shifted their shopping 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 social media shopping, to name a few.
Risk in a digitally changing world
The continued priority of shoppers in digital shopping and payment experiences, such as online banking, grocery ordering and restaurant delivery, marks a permanent shift in how US consumers as a whole now shop. It also places increased importance on a seamless checkout experience. But this shift also signals a concomitant increase in cyberattacks—particularly on personal data.
In fact, according to FBI records, cyberattacks on personal data increased 400% in 2020 as the majority of American consumers switched their shopping and banking online. This number continued to rise in 2021, with businesses experiencing 50% more cyberattacks per week.
As demand for online retail grows, companies face a paradox—responding to the insistence of younger consumers, such as Gen Z, for customized and integrated checkout experiences, often powered by data, while proving that customer data is secure and internet security standards apply position.
Trading personal data for a better user experience
Gen Z is extremely private when it comes to their data, so while the rise of digital connectivity during the pandemic has led to an overall increase in concern about the security of personal data between generations, Gen Z is the most cautious of all. And yet there is a paradoxical willingness from younger generations to store payment credentials online in exchange for a more seamless checkout experience.
For companies that are able to convince digitally native Gen Z consumers to share their personal data, the payoff is significant. For transparent, authentic brands, this could result in better capturing the loyalty of the generation expected to be the largest U.S. consumer population by 2026. But it all depends on whether retailers who collect personal information (PII ) are transparent about data collection, how they use it and how they keep consumers’ personal data safe.
Building trust with Gen Z customers will determine which retailers come out on top in the next five years. As Gen Z’s purchasing power grows, companies must continue to work to earn their trust—and their business—by creating a seamless customer experience that includes clear and strategic data security practices.
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