New survey from GoDaddy shows 41% of Gen Z and 43% of Millennials have followed a brand on social media for a discount, but 47% of small businesses do not offer a discount code when someone follows their brand on social media. The survey conducted by GoDaddy have shed light on a critical issue facing small businesses: a significant disconnect between what they believe they're offering and the expectations of their potential customers, particularly those in the Gen Z and Millennial demographics.
A staggering 91% of small business owners surveyed are confident that they provide a convenient online experience. Yet, only 21% of consumers echo this sentiment, with an even smaller percentage of Gen Z, at 19%, agreeing. This disparity suggests that many small businesses may be inadvertently turning away the very customers they seek to attract.
"Consumers are ultimately looking for convenience, and if small businesses aren't meeting these expectations, they're likely losing business," said GoDaddy Trends Expert Amy Jennette. "GoDaddy offers cost-effective tools small businesses can use to create more modern and convenient experiences for their customers, like 'buy online, pickup in-store,' for instance. The most important thing is that small businesses are adapting as Gen Z and Millennial preferences evolve beyond what's been the status quo."
The demand for convenience among younger consumers is not just a passing trend; it's a decisive factor in where they choose to spend their money. Small businesses that fail to meet these expectations are likely missing out on significant revenue opportunities. However, all is not lost. There is a silver lining, as 73% of Gen Z and 75% of Millennials express a willingness to increase their patronage of small businesses if they could match the convenience offered by larger chain stores.
So, what does convenience look like to these tech-savvy shoppers?
The surveys highlight several key areas:
Ways to Pay: A majority of Gen Z (73%) and Millennials (83%) value the option of "Buy Online, Pickup In-Store" (BOPIS), but only 34% of small businesses offer this service. Additionally, while most young consumers expect contactless digital payments, 27% of small businesses do not accept digital wallet payments.
Online Shopping: Free shipping is important to 90% of consumers, yet 38% of small businesses don't provide this service. Similarly, despite 89% of consumers emphasizing the importance of having a website, 24% of small businesses lack one. Direct online purchasing is very important to over half of Gen Z and Millennials, but nearly 3 in 10 small businesses don't have an online store.
Social Media: Young consumers overwhelmingly agree (80% of Gen Z and 75% of Millennials) that it's important for small businesses to have social media storefronts for easy shopping. However, small businesses tend to use social media for brand awareness rather than sales, with only 25% using it to sell physical products and 19% for digital products.
When using a debit or credit card, a greater percentage of younger consumers said they preferred paying via Tap to Pay compared to older generations:
- Gen Z – 50%
- Millennials – 31%
- Gen X – 23%
- Boomers – 18%
When asked if it's important that small businesses accept contactless digital payments:
- Gen Z – 85% said it's important
- Millennial – 82% said it's important
- Gen X – 67% important / 33% not important
- Boomers – 40% important / 60% said not important
When asked about the importance of being able to make purchases directly from a business's website:
- Gen Z – 55% said it's very important
- Millennials – 61% said it's very important
- Gen X – 50% said it's very important
- Boomers – 41% said it's very important
When asked how important it is for small businesses to have storefronts linked to their social pages:
- Gen Z – 80% said social storefronts are important
- Millennial –75% said social storefronts are important
- Gen X – 50% important / 50% not important
- Boomer – 29% important / 71% not important
Although nearly all small businesses (91%) agreed it's important to make sure their business is keeping up with tech innovations, they are not quite meeting the high expectations of an increasingly tech-savvy consumer base. And there are some stark differences across generational preferences that may be contributing to small businesses' confusion around the convenient experiences their customers want.
