In 2017, two major milestones will be reached.
With the launch of Android Pay late last year and Apple Pay this March, 2017 will be Ireland’s year of the mobile wallet.
On top of this, the eldest members of Generation-Z will turn 21, marking the coming of age of Ireland’s newest and most enigmatic generation.
A hidden tipping point for tech adoption
This year will mark the beginning of a ‘hidden tipping point’ in how we spend, manage and earn our money.
Generation-Z (anyone born since 1995) have been raised in a completely omni-channel and digital environment. They have never known the world without the internet, smartphones, social media and, soon, fintech.
2017 sees the eldest getting their first real jobs, opening up savings accounts, considering loans to do the things they want to do. They will naturally embrace disruptive new financial technologies beyond mobile wallets and peer-to-peer payments to do this, pushing their use in the mainstream.
While Millennials have been the focus of marketers for some time, Generation-Z is different because they are true digital natives and far more open to doing things differently than their predecessors.
As marketers get used to the idea of the omni-channel shopper, Generation-Z are already ‘omni-channel natives’ – they expect to be able to move seamlessly between online and offline environments and payment channels. We will start seeing a merging of media channels and payment channels as interactions between consumers and brands become even richer.
What brands have proactively responded to this disruption?
Pointing the way, some brands have begun adapting to this change.
Starbucks’ mobile wallet integrates the ability to pay with a smartphone with instantly redeemable MyStarbucks Rewards and extra features and benefits like pre-ordering coffees for collection. By creating an owned payment channel and virtual currency, the Starbucks’ mobile wallet has proved to be an incredibly powerful branding tool and new kind of payment/media channel.
Blending virtual currencies with gamification techniques is becoming an increasingly important way to connect with younger audiences. In Mexico, Nike+ let fans use their health app data as currency to bid on exclusive Nike products. In Denmark, McDonald’s created its own gamified currency, Coins, which young, cash-strapped customers would earn by competing against friends and then redeem at McDonald’s outlets, increasing overall customer frequency and spend among this hard-to-reach audience.
It has been estimated that there will be 21 billion connected devices worldwide by 2025. With the advance of the so-called ‘internet of things’, it seems technology can now convert anything into a payment trigger. Connected to the internet, Amazon’s Dash button lets consumers order shopping items literally at the push of a button. Apart from providing utility for consumers, these new payment mechanisms provide brands with a new kind of sales channel.
Taking this a step further, some brands are combining both virtual currencies and gamification techniques. With fitness and health tracking a rapidly growing trend – European sales of Fitbit devices are growing 46% annually – in Mexico, Nike+ let fans use their health app data – their ‘sweat’ – as currency to bid on exclusive Nike products, and becoming a kind of media channel driving brand engagement.
Marketers will need to start preparing now. Irish consumers have proven themselves to be rapid adopters of new technologies in the past – as with Facebook and contactless cards, adoption can be slow at first, but takes off rapidly once a tipping point is reached.
2017 will be the year marketers and retailers must start looking seriously at Generation-Z and this hidden tipping point or risk losing out.
A version of this article appeared in Core Media’s Outlook 2017 report.