Gen Z Likes Ordering Food Online. Baby Boomers Not So Much

Published by PYMNTS Intelligence, “How People Pay: Payment Choice Depends on Shopping Channel” unpacks consumer shopping and payment preferences, highlighting significant shifts and persistent distinctions across various retail channels.

The report’s central findings indicate that eCommerce adoption rates for retail and travel purchases have largely stabilized over the past year. Despite younger consumers often being labeled digital natives, the disparity in online transaction frequency between age groups is less pronounced than widely assumed.

While overall online purchasing rates remain similar across generations for retail and travel, notable differences persist in categories like restaurant and grocery purchases, where Generation Z and millennials show a significantly higher inclination for online transactions.

The study further details a clear divergence in payment choices depending on the shopping channel: credit cards and digital wallets dominate online transactions, whereas debit cards maintain their stronghold in physical retail environments.

These payment preferences are intertwined with perceived security concerns and budgeting priorities. Online, consumers appear to favor credit cards due to their enhanced fraud protection and separation from direct bank accounts, potentially viewing debit cards as riskier without the option for PIN entry. Conversely, in physical stores, debit cards are the preferred payment method.

Merchant preferences also vary by channel; Amazon leads the online retail space, while Walmart holds the top spot in brick-and-mortar shopping. Debit card users, in particular, tend to gravitate towards value-focused retailers, reinforcing the link between payment method choice and consumer priorities, often driven by budgeting considerations.

Key data points from the report include:

• eCommerce Adoption Consistency: For their last retail purchase, the share of consumers who shopped online was remarkably similar across generations: 27% of baby boomers and seniors, 25% of Generation X, 26% of millennials, and 23% of Generation Z. However, this cross-generational consistency does not extend to all categories, as Gen Z consumers were 72% more likely to have made their last restaurant purchase online than baby boomers and seniors.
• Payment Method Channel Split: In physical stores, 42% of consumers used a debit card for their last retail purchase, making them 50% more likely to choose debit over credit. Online, these preferences reverse, with 38% of consumers using credit cards for their last online retail transaction, making them 27% more likely to choose credit over debit. Digital wallets were also twice as likely to be used for online retail purchases (16%) compared to in-store (8%).
• Dominant Merchant Choices: Amazon was the destination for 53% of shoppers who used credit cards for their last online retail transaction and 44% of those who used debit cards. In the brick-and-mortar space, Walmart was the choice for 23% of in-store debit shoppers and 15% of in-store credit shoppers. Online debit shoppers were more than four times more likely to purchase from Walmart than online credit card users.

The “How People Pay” report offers deeper insights into the interplay between payment choices, perceived security, budgeting priorities, and the unique demands of different shopping channels. The methodology aimed to reflect the U.S. adult population across key demographic variables, including gender and income.

Additional findings within the report explore other aspects of consumer finance and payment trends, such as cash flow shortages driving buy now, pay later (BNPL) usage, the impact of BNPL and embedded finance on credit choices, and how financially struggling consumers use credit.