Generation Z: Between the Worlds of Digital and Analog

There are approximately 67 million people in the U.S. born between 1997 and 2012, and they make up approximately 20% of the total U.S. population. This group, known as Generation Z, represent a buying power of $44 billion. They also influence an additional $600 billion of family spending. Given all of this, it is very clear why this demographic is a critical target audience for retailers.

Constant interaction with friends on Instagram and TikTok is part of Generation Z’s lives, so there is no question that these social media channels influence what digital natives put in their shopping carts. One-third are inspired by social media before buying that new sweater, electronic gizmo or video game, according to the PwC study Gen Z is Talking. Are you Listening? Consequently, this is a medium that retailers must seriously consider in order to reach the customers of the future.

But the next step on the way to a new favorite item is surprising. After Generation Z has browsed Instagram, they do not go directly to an online store. Rather, they visit the store around the corner. Shopping with a PC or smartphone only ranks second and third in the PwC study. Nevertheless, they would like to see the local store connected to the Internet.

This is further supported by a study from NetSuite, which found that 97% of consumers see a need to go to a physical store. Significantly, 70% of those surveyed believe the most appealing stores have features that simplify and streamline shopping.


According to the IBM Institute for Business Value and the National Retail Federation (NRF), Generation Z consumers place great importance on dependable and consistent experiences when it comes to their retail purchases. How can retailers bring the analog and digital worlds seamlessly together to meet the key needs of Generation Z? Payments play a key role.

Shopping Must be Rapid and Streamlined

According to the PwC study, more than one-third of Generation Z believe that an ideal shopping experience must be as quick and easy as possible — especially when paying. That means no checkout line and fast access to product information. These are all qualities of ecommerce, so why not connect the online shopping experience with the POS?

Digital wallets such as Click to Pay or Apple Pay make checkout faster. The customer data is stored in the app, so all it takes is a few clicks to pay. In most cases, no further authentication is even necessary. Near Field Communication (NFC) technology works on a similar principle. To pay, the customer only needs to bring their smartphone close to the transmitter and a payment page is called up. Then the desired payment method can be selected. However, since the transmitters also can be attached to price tags, for example, the traditional checkout line can be skipped or eliminated completely.

Debit Cards and Smartphones

One in three 16- to 29-year-olds has already used their smartphone to pay at the checkout. In 2021, 15% even preferred to pay with their smartphone. Interestingly, many are using their debit cards to do this.

In the U.S., it has been shown that Generation Z prefers to pay for clothes, cosmetics, electronics and dinner with friends using their debit card as opposed to a credit card. Why? Many digital natives here saw their parents lose almost everything in the 2007 global economic crisis. It is an image that sticks in their minds. And for those younger Generation Z customers there are a number of debit cards available from U.S. banks that allow parents to “keep tabs” on their children’s spending, often via a simple app.  

Given this, it is no surprise that this generation saves more than any other before buying something and tries to avoid debt. The debit card is perfectly suited for this, and the ability to be able to do this via their smartphone is key.  

Generation Z and the Trends of Tomorrow

The smartphone accompanies Generation Z everywhere. It is a fitness coach, stage and shopping advisor all in one. So why not the mall and the wallet too?

What drives Generation Z today, including how they shop and pay, shows us the trends that will be in the world of retail payments. These include NFC, omnichannel and wallets like Apple Pay. Those retailers that take advantage of these payment methods starting immediately can not only meet the needs of this important demographic now, but also be rewarded with these customers in the future.

Jed Danbury is VP at Computop, a leading global payment processor.

Feature Your Byline

Submit an Executive ViewPoints.

Featured Event

Join the retail community as we come together for three days of strategic sessions, meaningful off-site networking events and interactive learning experiences.


Access The Media Kit


Access Our Editorial Calendar

If you are downloading this on behalf of a client, please provide the company name and website information below: