COVID-19 has sped up the world’s digital transformation, triggering new global payment trends. And if older generations are struggling to adapt, the millennials feel right at home. We’ve been training for this day since we were born. Stuck indoors? No problem. As long as we have access to the internet, we’re good to go. What does this mean for eCommerce?
It’s been said before, but I’ll say it again: eCommerce is evolving. In a recent article for Financial Times, author Yuval Noah Harari explains why changes to our healthcare systems, not to mention economical, political, and cultural changes, are taking place so rapidly:
That is the nature of emergencies. They fast-forward historical processes. Decisions that in normal times could take years of deliberation are passed in a matter of hours.
The same is true for eCommerce. In these unprecedented circumstances, new trends have emerged. Business is migrating online. Unexpected industry sectors boom in popularity. Innovative global payment strategies are introduced. Coping with the ongoing digital transformation means adapting payment processes to the most vulnerable members of society: the older generations.
But what about our usual trendsetters? The millennial generation still has a large impact on eCommerce and global payment trends.
Before we go any further, let’s define millennials. In recent weeks, there seems to have been some confusion on the subject. When American students were shown partying on their spring break, politicians were quick to attack ‘irresponsible’ millennials. But as millennials themselves will attest: the youngest millennial graduated five years ago.
The exact years vary, but the consensus appears to be that the millennial generation is defined as those individuals born in or around 1978-1992. In other worlds, the youngest millennial will be 28 this year while the oldest is in their early 40s.
Financial Habits of the Millennial Generation: Defining Global Payment Trends
Payments are the only thing that stands between merchant and consumer. And for eCommerce businesses, this increasingly means focussing on the millennial generation. Why? Even before the COVID-19 pandemic, millennials were making 54% of purchases online. This is above the non-millennial average of 49%. Which, it’s important to bear in mind, includes the up-and-coming consumers of the future – Gen Z.
These days, that number is even higher and shows no sign of abating. Why would it? As we continue to stay safe by staying indoors, there’s no reason for us to switch to non-digital methods of payment. And the world is adapting. New sectors of eCommerce have sprung up, filling the niches millennial lifestyles demand.
Millennials are increasingly mature consumers. This means we’re in a financial position to make higher value purchases.
As everything heads online, it’s tempting to think that simplification and streamlining of payment processes is oriented towards older generations, who are just coming to grips with the fast pace of digital transformation. Not so. Millennials are just as much – if not more so – focussed on user experience. And if the user experience isn’t right, those high value purchases will be made elsewhere.
As a generation, we’re settled. Most of us have jobs, families, and a mortgage. We’re used to doing our shopping online. Having grown up immersed in tech, we’re natives in the digital world. And, truth be told, we’re one of the most important audiences to please when it comes to doing business online.
Regional Variations: Technologies Preferred by Different Millennial Market Segments
No article about millennial trends – COVID-19 related or otherwise – is complete without mentioning mobile. Even as far back as 2015, Americans were spending 60% of their online shopping time on mobile devices. Business Insider reports that, in 2019, mCommerce already comprised over a quarter of total eCommerce, more than doubling in market share since 2015.
In Asia-Pacific, this number is even higher. 80% of consumers in China, for instance, only access the internet through their smartphone. Mobile is more relevant than ever for Asian consumers, many of whom belong to the millennial generation.
Though countries with mature economies, like Japan and South Korea, have an ageing population, many emerging economies, like Malaysia and Indonesia, have a median age of no older than 30 years old. The developing trends forecast an expanding middle class. The total number of middle-class citizens in Asia overtook Europe in 2011 and has risen steadily since. According to Statista, the middle-class population in Asia-Pacific is predicted to reach 3.49 billion people by 2030.
Mobile is the device of choice in most countries in the Asia-Pacific region. An omnichannel, optimised payment journey is key to build the customer journey guaranteed to boost conversion, improve retention, and ultimately, increase eCommerce revenues.
Engaging Big Tech: Millennials as Both Consumers and Merchants
It’s worth bearing in mind that millennials aren’t just the consumers these days. We’re also the business owners, decision makers, and decision influencers. Payment services can’t cater exclusively to end-users – they must meet the demands of online business. The client journey must replicate the customer journey: quick, easy, and seamless.
It’s an interconnected world. Millennials are shaping eCommerce trends as consumers just as much as defining payment trends as merchants.
Big tech is responding to these emerging global payment trends. Companies like Apple, Google, and PayPal strive to facilitate a streamlined experience for both merchant and consumer. Offering sleek, user-friendly interfaces, they encourage higher conversion, retention, customer satisfaction, and, ultimately, larger transaction volumes.
Global payment trends are taking root as we speak. Millennials across the globe are maturing into active eCommerce consumers. As an online business – millennial-owned or not – it’s best to be prepared. Especially when it comes to appeasing your most lucrative audience. Tapping millennial payment trends across industries, regions, and big tech partners is fundamental to growing your business.