What Millennials and Gen Z Really Want at Checkout

We’ve seen the headlines: “Millennials only like shopping on their phones”, “Younger Generations Hate Credit Cards”, “Millennials and GenZ aren’t loyal customers”, and the list goes on and on. The press today has painted the picture that Millennials and Gen Z are dramatically different than older generations, especially when it comes to purchasing and payments. Are these claims based in fact or fiction?

Millennials today are the largest group of consumers. Alone they make up 30% of the entire US population, and together with Gen Z they make up half. In terms of age Millennials are in their late 20’s and early 30’s, born between 1981-1994. They make up half of the workforce today and are reaching major life stages, like buying a house and getting married, that require them to make big-ticket purchases.

Retailers and brands are eager to grab hold of these young shoppers, that have a growing amount of buying power, and turn them into loyal customers. They are spending time and money trying to give them what they want based on what they’ve been told they want.


Facing the Facts

Recently we ran a survey of 1,000 American shoppers and found that, younger shoppers are not all that different than older generations when it comes to making purchases at checkout, and that retailers don’t have to completely change their business to cater to these younger generations.

Just like the generations before them, Gen Z and Gen Y adults are fairly comfortable with credit card borrowing. Nearly 7 in 10 younger shoppers reported being at least somewhat comfortable carrying a balance on a credit card, and nearly 1 in 4 are very comfortable with the practice.

Millennial purchasing habits are starting to look more and more like their older counterparts. When it comes to checkout half of Millennials are most likely to use credit to pay for their purchases, and 59% of them have more than one credit card in their wallet.

What does this prove? Retailers shouldn’t view these younger generations as revolutionary and focus their efforts on how they can cater to them in ways different than any other customer segment, but rather focus on what matters to them most.


Giving them What They Really Want

Despite the common misconception that younger generations want to shop at stores that provide them with novel customer experiences and personalization, we found that what they really want takes a few steps back. What Millennials and GenZ want from a checkout experience and payment options, is simple: they want information.

Gen Z is the least likely to know their credit score (42% vs 69% overall) and less likely to feel they have the financial information they need to make the decision about whether to apply for credit online or in the store (53% vs 76%). Retailers and lenders can offer a helping hand by providing more information on interest rates, promotions and individual credit scores – the top things that younger shoppers wish they knew more about at checkout.

Other ways that retailers can give Millennials and Gen Z what they want at checkout include:

Providing the flexibility to shop whenever and however

Today’s customer is savvier than ever. 22% of Gen Y and Z expect to be able to apply for and use their payment options between both online and in-store checkout. They want a truly omni-channel experience with the ability to shop on one channel, and purchase on another, with little disruption.

Offering the right payment options

Consumers want options that truly fit their lifestyle. Unlike common misperception, Gen Z and Gen Y overwhelmingly prefer credit cards to monthly payment options – and even cash when offered common marketing promotions. 80% of Millennial and 70% of Gen Z preferred a credit card with 0% interest for 6 months to fixed monthly payment plan. And over half (53% of Gen Y and 55% of Gen Z) will forgo cash for a credit card that offer 5% cash back.

The next time you read a headline proclaiming that Millennials want completely different things than the generations prior to them, just remember that like most things, this generation is no different than the next. They are merely evolutionary rather than revolutionary.

Want to look deeper into this research? We presented our findings at Shop.org 2017 in a presentation titled “Payments, Gen Y, and Gen Z: Your Assumptions are Wrong”. You can checkout the presentation here.

by Veronika Clough

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