Afterpay has today released its Global Gen Z Report: Financial Feels, a report on the values of Generation Z consumers (born 1995 – 2012) and their behaviours, revealing key trends and take-outs on how they are managing their finances both now and for a healthy financial future.
Combining commentary from leading experts globally with research from Afterpay’s cultural navigators in Australia, the US and UK, the report provides insights into Gen Z’s feelings towards credit cards, financial wellness and flexibility, as well as how and where Gen Z prefers to shop.
The report’s key takeouts included:
- Financial wellness is Queen: Gen Z are rejecting overt displays of wealth, embracing an approach that prioritises flexibility and financial wellness over wealth-hoarding.
- Flexibility first: Gen Z want to maximise flexibility within their lifestyles, preferring subscription and sharing based services and cancel any-time providers, which allows them to turn things on and off as they need.
- Digital convenience: Having grown up on the internet, Gen Z is all about digital, seamless end-to-end mobile experiences, so digital integration of retailers and payment platforms is a must.
- Real people: Gen Z can see through basic marketing tactics and are drawn to brands that demonstrate authenticity, representing normal and diverse people in their imagery.
- Sustainability: Gen Z are openly adopting retail concepts that make use of by-products to combat waste pollution, and seek brands who prioritise sustainability and environmentally friendly supply chains.
As a generation raised in the aftermath of the 2008 global financial crisis, Gen Z are more cautious about spending, are wary about credit cards and are unlikely to use traditional credit-orientated products. Millennials initiated this trend by turning away from credit cards, and now Gen Z are looking for low-commitment solutions that are budget focused.
In fact, 94 per cent of Afterpay’s Gen Z customers use their own money: by linking their Afterpay account to a debit card, Afterpay helps them manage their budget, avoid high cost and long-term credit and allow them to monitor their money in real time. For Gen Z, finance is no longer regarded as a constraint that needs to be overcome, but as a lifestyle enabler that needs to be attended to in a proactive manner.
Financial Wellness is Queen
Gen Z is re-assessing the role of money in their lives, rejecting overt displays of wealth, or wealth hoarding. Instead, they are focused on being financially in control, a trend which the impact of COVID-19 has cemented for this generation. Gen Z have embraced apps and services that lead them to feel confident and calm, and promote their financial wellbeing.
As a generation who grew up with stop-anytime subscriptions including Netflix and Spotify, Gen Z like to maximise flexibility within their lifestyles. The ability to turn on and off commitments in their life is paramount and leads to a generation who prefer to lease, rent and share so they have the financial freedom to spend their money on what’s most important to them without being tied down.
As a generation who care about combating waste pollution, fashion is a paradoxical industry. While convenience is key, Gen Z also cares about sustainability: they like to buy from community-driven labels as well as fast fashion. Unlike Millennials who prefer authentic or craft labels, Gen Z will combine the smaller labels powered by social media with international brands which are available locally.
As a group, they expect fashion and beauty retailers to embrace circular economy waste practices, with pre- owned fashion and accessories appearing in department stores, and thrift apps like Depop spiking as new retail formats.
Nick Molnar, Afterpay Co-Founder said, “As a generation who has a firm grasp of the role finance plays in their lives, Gen Z Aussies are emerging as a self-motivated generation that pay, play and save differently from the Millennials that came before them.
“As an increasingly influential demographic, the report focuses on trends across the globe and shares insights into how Gen Z are helping to shape the future of brands.”
Other things to note about Gen Z
Gen Z are proactive, purposeful and progressive and seek brands that demonstrate these values. In fact, 89% believe it’s necessary for brands to do something to help with COVID-19. A generation that is already cautious with spending, 2020 has made them additionally responsible: With under-25’s more than 2.5 x times more likely to have been working in a sector adversely affected by lockdown, they will be looking to be savvy with their budgets rather than take on debt.
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