Author: Andy McDonald, Vice President Merchant Payments - Europe, ACI Worldwide
And plenty of (digital) column space has been dedicated to discussing how the first digital native generation is transforming commerce (and payments) with different expectations, preferences, and shopping behaviours than their older cohorts.
As the largest generation in history becomes the primary demographic within the global workforce, pressure on merchants - and by extension the range of vendors that serve them - is building.
What is also interesting is how millennials’ shopping behaviours and preferences regarding eCommerce, and how they pay online, will influence and even transform the behaviours and preferences of the broader population.
Tech-savvy millennials are 2.5 time more likely to be early adopters than older generations, but bear in mind that they are early adopters, not the only adopters. Soon enough, they will be followed by the early and late majority, making up the vast bulk of consumers in all generational groupings. Maybe it is time to stop talking about millennials’ expectations regarding eCommerce and payments, and simply acknowledge that by 2020, these will be the baseline expectations of most shoppers.
Look no further than Facebook for evidence of this effect. The social networking site may have grown out of a college dorm room, but it took only a few years for Facebook to become a standard communication tool for the baby boomer generation. Figures from 2014 showed that the fastest growing demographic on Facebook was the 55+ group (80.4% 2011-2014).
So if the preferences and behaviours of millennials today can be extrapolated, and older generations will soon follow, what does it mean for eCommerce, payments and the wider finance industry?
For starters, millennials – typically defined as those with birth years 1980-1999 - are typically more debt-conscious than previous generations, with nearly 70% preferring debit over credit cards. 62% are comfortable connecting payment information to retailer apps to speed up payment, 45% are comfortable with the idea of connecting payment information to wearable devices, and 44% would prefer to use phones instead of cash to pay for small items1.
The implications of these figures are pretty clear as they relate to the need for genuine omnichannel solutions, however it’s also notable that three-quarters of all shoppers - and 81% of millennials - will abandon their shopping cart if a mobile site is buggy, slow, or prone to crashes. The standards that consumers expect when shopping online are rising, and are highest amongst the generation that now holds the most spending power.
On top of this, millennials have come of age in a web 2.0 world, where customised and highly personal online experiences have become the norm. This extends to payments, with the desire to be able to complete a transaction with the preferred payment method - which itself also varies hugely by region. Consumers now expect to shop and complete a transaction cross-border with the same ease and efficiency as in their domestic market.
Merchants need to look no further than the demands and expectations of millennials today, to know how they will need to cater to all consumers within the next 3-5 years. By 2020, the millennial buzzword will have well and truly run its course, and all players in the eCommerce payments space will simply be focused on enabling consumers of every age to shop and pay when they want, how they want, and where they want.