Social commerce key as Checkout.com research flags Generation Alpha’s rising influence in digital economy

A global study released by PayTech firm, Checkout.com, highlights the consumer buying behaviour which is powering today’s digital economy. The research, conducted across the UK (2,000 people), US (2,000), UAE (1,000) and China (2,000), reveals a number of trends, including the growing spending power of Generation Alpha.  

Children aged 8-15 years old (Generation Alpha) are driving 27% of their household’s monthly spend, rising to nearly a third of monthly spend for digital purchases, as 29% of Millennial parents take responsibility for purchasing digital products each month for their children. This comes as digital products and services make up 21% of the average global household spend. 

Generation Alpha’s purchase influence is greatest in online educational resources, which 47% of parents purchase for their children, followed by entertainment streaming, purchased by 30% of parents globally.

The study also highlighted several regional trends in parents buying digital goods and services for their children. 28% of Millennials globally pay for monthly e-gaming services for their children, rising to 47% of parents in the UAE. Parental spend on e-gaming is lowest in the US but this is offset by 33% of children in the US making e-gaming purchases independently each month.

Chinese children benefit most from educational purchases, with 59% of Millennial parents in China buying monthly digital educational resources for children under 12, and over 22% purchasing news media subscriptions for them.

Meanwhile parents in the UK spend significantly on online education for their children (39%) and are the most likely to continue to purchase monthly online education for their teenagers.

Apart from being the beneficiaries of their parents’ spending, children are also spending independently in the digital economy:

• 33% of children in the US (aged 8-15 years) commonly make in-app purchases with their pocket-money. 

• In the UK, 71% of children are making their own purchases for non-essential items by the time they are 15, with cards cited as their preferred payment method. 

• 75% of 8-year-olds and 92% of 15-year-olds in the UAE make payments themselves, rather than via a grown up. 

• There’s also a growing trend of children over 13 using buy now, pay later (BNPL) as a payment method in the US (7%), UAE (11%), and China (19%). This figure is less than 1% in the UK, however.

• In China, 65% of 15-year-olds are taking their purchases into their own hands, with social commerce being their most frequent shopping channel (51%) and QR codes (39%) and digital wallets (39%) their preferred payment methods. 

Social commerce is already a major shopping channel in China, with 46% of all adult Chinese consumers purchasing via social channels. In the UK (24%), USA (17%) and UAE (23%) this is currently a less common channel amongst adults, however children around the world use social media as the go to source for finding out about deals on products, with very little regional variation (UK: 48%, US: 57%, China: 56%, UAE: 41%).

Further, social commerce is the most common shopping channel, globally, for Gen Zs in all countries, with only 35% of Gen Zs regularly shopping in physical stores.

“It’s clear that Generation Alpha is playing a major role in the digital economy,” says Rory O’Neill, Chief Marketing Officer at Checkout.com.

“The younger generation is going beyond using social channels for discovery, but actually purchasing through these platforms. We're seeing this unfold in China, which should always be considered the blueprint for future commerce. Whatsmore, businesses need to pay close attention to customer preferences for payment - across all generations - in order to drive growth and loyalty in this fast changing and competitive market.” 

2024 RTIH INNOVATION AWARDS

Digital retail is a key focus area for the sixth edition of the RTIH Innovation Awards, which is now open for entries.

The awards, sponsored by Scala, CADS, 3D Cloud, Brightpearl by Sage’s Lightning 50, and Retail Technology Show 2025, celebrate global tech innovation in a fast moving omnichannel world.

Key 2024 dates

Friday, 25th October: Award entry deadline 

Tuesday, 29th October: 2024 shortlist revealed

30th October-6th November: Judging days

Thursday, 21st November: Winners announced at the 2024 RTIH Innovation Awards ceremony, to be held at RIBA’s 66 Portland Place HQ in Central London.