The oldest members of Gen Z, the generation born between 1995 and 2010, are turning 24 this year and as such, are entering the workforce. (By contrast, the oldest Millennials are now 39 years old!). As time marches on and a new generation begins to push the Millennials out of the “youngest generation” status in the workforce, interesting changes are in store. What can U.S.-based marketplaces expect from this new generation of freelancers, sellers, vendors and employees?
Gen Z is the first "mobile-first" generation and true digital natives, and according to a McKinsey & Company report, they represent 32% of the global population. While Millennials were raised by Baby Boomer parents, Gen Z was raised by Gen X, the generation born between 1960 and 1979. Having witnessed 2008’s major recession at a young age, Gen Z is wired to be pragmatic and savvy about money.
For marketplaces, the prospect of interacting with an entirely new generation of digital natives that make up a third of the global population is a tremendous opportunity. Gen Z has grown up in an era when they think nothing of setting up an e-commerce shop on Etsy, reselling used phones on EBay, or signing up on Upwork to work as a developer creating apps. Selling products and services on a marketplace is as natural to Gen Z as breathing! At the same time, it’s important to keep in mind that Gen Z is both pragmatic and realistic, having come of age in the global recession of 2008. Freelance work is appealing to Gen Z, but unlike Millennials, Gen Z also values the security of a full-time job.
When it comes to Gen Z consumers (and for older generations as well, as time progresses), consumption “means having access to products or services, not necessarily owning them,” according to the report by McKinsey & Company. The report goes on to state:
As access becomes the new form of consumption, unlimited access to goods and services (such as car-riding services, video streaming, and subscriptions) creates value. Products become services, and services connect consumers.
Members of Gen Z not only views consumption as access, but to take it a step further, they view consumption as a collaborative relationship with the marketplaces and companies they interact with, and a way to generate additional income, according to McKinsey & Co.’s report, which states:
As collaborative consumption gains traction, people are also starting to view it as a way to generate additional income in the “gig economy.” Another aspect of the gig economy involves consumers who take advantage of their existing relationships with companies to generate additional income by working temporarily for them. Some companies are already embracing the implications.
The first generation to easily integrate online and physical experiences (Gen Z toggles easily between online-only and “real life” friends, for example), the outlook for online marketplaces and Gen Z is a highly positive one. The embrace of online experiences, combined with Gen Z’s risk-averse, pragmatic outlook, a predilection for saving money, and a desire for finding the truth in all things (another aspect to their pragmatic outlook) points to payments implications for marketplaces. To attract and retain Gen Z sellers, freelancers and more, marketplaces should offer a range of payments options.
Here are three tips for aligning your payments options to appeal to Gen Z:
- Delivering good value when it comes to sending funds will be of the utmost importance for this new generation. They will not accept anything less!
- Creating a personalized approach to payments choices is wise, and it will be necessary to provide an array of options.
- Providing transparency into the payments process will be vital, as this generation that values truth above all qualities will not tolerate hidden fees and unexplained delays.