Tink, the payment services and data enrichment platform, has delved into the spending habits of over 2,000 UK consumers and 500 UK high-end merchants to find out how customer expectations are evolving at the higher end of the market.
According to data found by Tink, Gen Z and Millennials are purchasing the largest share of luxury items – averaging 16 and 14 items per year, respectively. However, with the ongoing cost-of-living pressures, consumers are becoming more discerning with their purchases, opting for products that combine quality with ethical production.
High-end merchants are in the perfect position to respond to this demand. As such, 85 per cent are now focused on delivering a seamless and secure payment experience given that a streamlined payment experience is a critical element of the shopping journey.
Lucy Grant, Tink commercial strategy director said: “Understanding the evolving preferences of Gen Z and Millennial shoppers is key for merchants looking to stay ahead in the high ticket and luxury market. These high-value customers demand more than just a premium product, they expect an exceptional experience, from sustainability and quality to seamless and secure payments.”
Consumer preferences
Tink found that consumers are now looking to prioritise quality, sustainability and secure shopping experiences. According to the findings, part of the benefit of a luxury purchase is an excellent buying experience. This was especially the case for 62 per cent of Gen Z and 68 per cent of millennials.
Seventy-three per cent of Millennials and 64 per cent of Gen Z surveyed want to invest more in quality purchases that will last. Sustainability also plays a key role in decision-making, with the majority of Gen Z (63 per cent) and Millennials (62 per cent) willing to pay more for ethically made items.
Three-quarters of both Gen Z (76 per cent) and Millennials (75 per cent) are also willing to pay more for the reputation of the brand, reflecting the importance of trust – particularly in areas like payment security – in their purchasing decisions.
Adjusting the payments experience
Tink’s data shows that for Gen Z (58 per cent) and Millennials (64 per cent) who shop for high ticket and luxury goods, payment security is a top concern. So much so, that 56 per cent of Gen Z and 52 per cent of Millennials have expressed reluctance to make a high-value online purchase due to fear of a cyber failure leading to a payment error or fraud.
In response, over two-thirds (68 per cent) of high-end merchants plan to enhance their payment systems in the next year to meet these demands.
When shopping for high ticket and luxury goods, younger shoppers value transparency and security. Tink’s research shows that 36 per cent of Gen Z and 42 per cent of Millennials want a payment method with no hidden fees, while 34 per cent of Gen Z and 38 per cent of Millennials demand one that minimises fraud.
Grant concluded: *“Trust and brand reputation have never been more important for consumers when parting with their hard-earned cash, so it’s essential that merchants give shoppers peace of mind when it comes to making high-value purchases. By investing in modern payment solutions, such as Pay by Bank, high-end merchants can offer a secure, trusted checkout option – with authentication happening in the customer’s familiar bank environment.”
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