COVID-19 has sped up the world’s digital transformation, triggering new global payment trends. Both retailers and shoppers have been pushed online, and they have had to adapt fast.
It’s been said before, but I’ll say it again: eCommerce is evolving.
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.
Much attention has been paid to the most vulnerable: the elderly. But what about the 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 1981-1996. In other worlds, the youngest millennial will be 25 this year while the oldest is hitting 40.
Financial Habits of the Millennial Generation: Defining Global Payment Trends
Several things define the millennials, but probably the most obvious and consequential is the fact that they are the first digital natives. The previous generations grew up in an analogue world and had to pick up the digital lifestyle later in life. They have been remarkably successful: research suggests that Gen Xers shop online almost as much as Millennials, with the much-maligned Boomers not far behind. Still, the digital natives are an increasingly important group of consumers for eCommerce businesses.
In fact, eCommerce increasingly seems like a redundant term. The digital transformation shows no signs of abating; at times it feels that almost all commerce is turning into eCommerce. Why wouldn’t 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.
Probably more importantly, millennials are increasingly mature consumers. Even the youngest millennials are out of college and entering the labour market; the oldest millennials are nearing middle age. As a generation, we’re settled. Most of us have jobs, families, and a mortgage. 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.
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 though pandemic came with lockdowns and decreased mobility, mobile adoption continued to grow in 2020. App Annie’s annual “State of Mobile” industry report suggests that mobile app downloads grew by 7% year-on-year in 2020, reaching a record-high level of 218 billion. Moreover, people have been spending more in their mobile apps: consumer spending grew by 20% year-on-year to also, reaching another record-high of USD 143 billion. China, the United States, Japan, South Korea and the United Kingdom were among the fastest growing markets.
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.