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Gen Z changing spending habits, says Visa

The generation born into a world of digital technology is maturing and catalysing a shift in spending habits, writes JASON BANNIER.

Despite the resurgence of in-store shopping, the Covid-19 pandemic has permanently altered the shopping experience. Now, as Generation Z (Gen Z) — those born between 1997 and 2012 — continue to grow up, a substantial shift is occurring in spending habits and digital shopping behaviour.

“We’ve seen consumer habits change during Covid, and now we have a digital first with the influx of new spending demographics among Gen Z,” said Andrew Torre, regional president of Visa for Central and Eastern Europe, the Middle East and Africa (CEMEA).

This was a focal point in his keynote address at the Visa CEMEA Security Summit 2024 in Dubai last week. The summit brought together more than 350 participants, including top Visa executives, industry experts, and thought leaders from around the world, to discuss the latest trends and technologies in payment security. This summit’s theme, “Steering the new security paradigm”, explored innovative solutions and new partnerships to accelerate digitisation and safeguard the ecosystem’s integrity.

“If we step back to 2019, and look at spend on a Visa card or activity on a Visa card, it would have been 35% of all activity, while the remaining 65% would have been cash,” said Torre. “Fast forward to the end of 2023, that 35% went up to 57%, so digital payments are now the majority of all activity on a Visa card in the CEMEA region.”

This rise in digital transactions mirrors the exponential growth of the payments industry, with CEMEA emerging as one of the fastest-growing payment regions globally, according to Visa. This surge aligns with the maturation of Gen Z, who grew up with technology and social media, thereby shaping the shift in shopping behaviour.

“Three out of 10 Gen Zs basically do all their shopping online in social media,” says Torre. “Gen Z represents one of the biggest waves of consumption that we’re going to have in the next decade, so it’s really important we understand them and support this type of commerce.”

The four areas that Torre covered when it comes to understanding and supporting commerce was personalisation, convenience, social, and trust.

“Personalisation has become a cornerstone of consumer expectations, with 80% of consumers expressing a desire for personalised offers,” said Torre. “GenAI is rocket fuel for personalisation, and driving really great consumer experience.”

Leveraging advancements in technology, such as GenAI, is revolutionising personalised experiences, enabling future services like predictive grocery shopping and personalised shopping assistants.

“What’s different about this generation is they don’t go shopping, but rather they’re in their own online medium,” said Torre. “They’re on social media, and shopping comes to them naturally.”

According to Torre, an example of the future shopping experience will be observed in Mercedes Pay wherein shopping on-the-go will become possible through GenAI integration. The vehicle will be capable of suggesting items to its driver based on what the system calculates the driver will want or need.

“After dropping off one’s kids, the vehicle can suggest a coffee order from a shop at which you regularly stop, with the integration of GenAI into the system. Upon arrival, your coffee will be ready for consumption,” said Torre. “This experience will be coming soon because of the emergence of GenAI.”

To make the purchase suggested by your vehicle, it would only need to scan your fingerprint via its steering wheel. This is a great example of personalisation and convenience being implemented for consumer satisfaction and merchant success.

It is with the future of these technologies that Gen Z is poised to reshape spending habits and the online shopping experience of CEMEA.

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