Online purchases have become a necessity for a new and very important economic sector, Generation Z, especially in South Africa, where recent PayPal research suggests that online purchasing will grow by R53bn by 2018. The term refers to those born after the much talked about millennials. They’re a critically important market, so how can businesses ensure they stay in touch with them?
You’ll have probably heard about the closure of Stuttaffords, which has been met by shock and surprise in South Africa, especially by those who grew up familiar with the prestigious 159-year-old department store. Once recognized by many as the “Harrods of South Africa”, Stuttafords sadly failed to adapt, as the world shifted towards online platforms.
The closure also coincided with a decrease in sales due to a local economic slump, isolating premium brands such as Ted Baker and GAP. Affordability and access were key factors in the store’s closure, mirroring the misfortunes of once proud and mighty US and European retailers, such as the UK high street brand BHS.
What many of these retailers failed to recognize is that Generation Z is looking for enhanced digital tools, including the ability to purchase directly via social platforms, such as YouTube, Facebook, Instagram and Snapchat. Recent research from Accenture has highlighted the demand for digital options when making purchases. Surveying 10,000 consumers across 13 countries, the company found that people expect retailers to construct seamless digital shopping options. This is further supported by studies demonstrating that social media is set to become a major direct shopping channel for this generation, with more than two thirds(69%)expressing a desire to purchase goods in this way.
As part of our Generation mBanking series, we’ve already established that digital natives – young people that have grown up with the internet – are willing to change banking provider if they have poor mobile banking experiences.
Furthermore, young consumers have gone so far as to say they wouldn’t tolerate poor security at all, and have also revealed they are most likely to voice their grievances online. Our research demonstrated that 77% of those aged 18-27 use online banking services, even though two thirds are concerned about the risk of using a smartphone or tablet for banking. People are using these services, even though they’re worried about them.
If you’re a bank or retailer trying to construct a successful digital strategy, what can you do? Here are some of our best practice suggestions:
- Embrace best practice with mBanking app development. This means ensuring strong links and strong encryption every step of the way from the authentication process to the bank’s systems and data.
- Make security a cornerstone of your marketing. Given the rising number of breaches the world over, and the high levels of sensitivity of those aged between 18-27 in our research survey, if you’ve built in good security, try to convey that to your target and existing audience.
- Educate your customers on security best practice. Even if your security is rock solid, customers with poor security practices, from using public WIFI to having ‘password’ as their password, will be the weak link. So you need to help them to help themselves.
There are of course country-to-country variations in our data, but overall the Generation mBanking study demonstrates that robust security is a critical component of digital strategies for the next generation of connected, mobile customers. What’s more, customers will not tolerate compromising on the frictionless customer journey, so a balance between security and convenience needs to be achieved.