According to a recent report by software and payments specialist Planet, tax-free shopping is experiencing a boom among Gen Z consumers. The report reveals that Gen Z spending with European retailers has tripled since January of this year, highlighting their growing importance in the retail industry.
Although this growth is significant, Gen Z currently only accounts for 7% of in-store tax-free sales, compared to nearly 43% for Millennials. However, the report suggests that understanding the shopping habits of Gen Z will be crucial for future success. One interesting finding is that Gen Z seems to be largely unaffected by the pandemic, which is positive news for retailers.
The UK government’s decision to end tax-free shopping for tourists has received criticism in light of Gen Z’s love for traveling and shopping abroad. The report indicates that the easing of Covid restrictions in the Middle East has boosted retail sales in Europe, with French sales to Saudi Arabian shoppers increasing by 60%. The Asia Pacific region has also seen an increase in tax-free shopping, with Korean and Singaporean shoppers becoming important for European retailers. Currently, South Korea, Singapore, and the United States are the top three source locations for European tax-free shopping.
US tourists continue to be the most frequent visitors to Europe, with year-on-year spending significantly higher in France, Italy, Spain, and Germany. However, the UK misses out on this trend due to the abolishment of tax-free shopping. Nevertheless, UK shoppers still hold significance, and Gen Zs from the UK make up 10% of all sales to this group in Europe, second only to the US with a 19.8% share.
The report also underscores the importance of technology when targeting Gen Z shoppers. This age group is the most tech-savvy and expects quick and seamless services, including easy and flexible payment methods. Retailers need to adapt to their preferences and provide efficient and user-friendly processes.
Luca Cassina, President of Retail at Planet, stresses the need for retailers to adapt to Gen Z’s preferred channels of communication and shopping in order to capture their attention. With Gen Z making up 30% of the world’s population, it is crucial for retailers to understand and cater to their needs and expectations.
To learn more about tax-free shopping and its impact on Gen Z consumers, you may find the following links useful:
– Retail Dive – 5 things on Gen Z and taxes: No, they didn’t pay less
– Planet – The Tax-Free Revolution: How retailers can capitalize on the opportunity
