Gen Z is fastest growing group of tax-free shoppers - Planet report
Tax-free shopping among Gen Z consumers is growing faster than for any other age group, new research from software and payments specialist Planet shows.
Its latest Intelligence Report shows that by January this year, Gen Z was spending roughly the same amount as in 2019 with European retailers, but by October, this had grown to three times as much.
Every other age group accounted for roughly the same or less spending compared to 2019.
The news once again underlines the madness of the UK government’s decision to axe tax-free shopping for tourists, especially given global Gen Z’s fondness for travel and for shopping abroad.
That said, while Gen Z is growing fast, this age group still represents only 7% of in-store tax-free sales at the moment, compared with nearly 43% for Gen Y (aka Millennials).
But clearly, the development of Gen Z’s shopping habits will be key for the years ahead and the fact that this group appears to be shrugging off the pandemic is good news for retailers.
Looking at tax-free sales overall to all age groups, Planet said that the easing of Covid restrictions in the Middle East has boosted retail sales in Europe (French sales to Saudi Arabian shoppers are up 60%). And the same easing across much of the Asia Pacific region has also had an impact with Korean and Singaporean shoppers becoming hugely important for retailers in Europe. In fact, South Korea and Singapore have joined the US in making up the top three source location for European tax-free shopping in general.
In fact, US tourists continue to be the most prolific visitors, with US tourist year-on-year spending significantly up in France, Italy, Spain, and Germany. The UK is clearly left out of this list given the earlier tax-free shopping abolition.
For Gen Z specifically, US shoppers also lead the way, although UK shoppers are important too. Planet said Gen Zs from the UK accounted for 10% of all sales in store made to such shoppers across Europe’s tax-free market, beaten only by those from the US with a 19.8% share. This shows the importance of America’s and Britain’s youngest group of shoppers to European retailers.
“As this age group’s spending power continues to grow, retailers need to not only focus on what they buy, but how they buy,” Planet added. “Gen Z is the most tech-savvy of all age groups and has high expectations for swift, efficient services including payments which they expect to be easy, offer them a full choice of payment methods and be almost invisible. They tend to be the group that are less tolerant of clunky systems and painful processes”.
Luca Cassina, President of Retail at Planet, said: “Today, Generation Z make up 30% of the world’s population so getting their attention is crucial. The most difficult challenge for retailers is keeping up with their preferred channels of communication and shopping.”
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