With inflation in Australia at its highest levels in over two decades, new data from shopping platform, Cheddar, has revealed the rising cost of living is by far the largest concern for nine in ten (87 per cent) Gen Z and Millennials.
As purse strings tighten, so have the spending habits of young Aussies. The data has revealed that big-ticket items aren’t a top priority for this age group, who instead uncover new ways to make their money go the distance.
This includes finding clever ways to source deals and earn cash back on their purchases as they focus on experience-led spending on categories such as travel, dining and health and wellbeing.
To better understand the shopping behaviours and attitudes of Aussies aged between 16-27 (Gen Zs) and 28-42 (Millennials), Cheddar, which is backed by CommBank and built by its venture-scaling arm, x15ventures, has commissioned research in partnership with L.E.K Consulting to uncover how young Aussies intend to spend over the next 12-18 months.
What’s troubling young Aussies’ spending habits?
Against the backdrop of Australia’s economic uncertainty, which looks only set to worsen, the data has revealed that the cost of living and inflation is the top area of concern for young Aussies right now, with 87 per cent ranking it as a key concern. This was followed by house prices (77 per cent), and concerns around income and employment opportunities (50 per cent).
This combination of concerns has led to Gen Zs and Millennials implementing a raft of measures to ensure they’re being more thrifty with their spending.
Ushering in an experience-led renaissance
Despite this gloomy economic backdrop, experiences are top of mind for this age group with six in 10 (60 per cent) intending to prioritise their spending on dining in the next 12-18 months, followed by over half (56 per cent) intending to spend on health and wellbeing and a similar proportion (47 per cent) intending to prioritise travel.
In the current environment, less than three in 10 (29 per cent) respondents said they were likely to spend money purchasing a car in the next 12-18 months, with just over a quarter (26 per cent) intending to direct their hard-earned cash towards the purchase of a house. Others are focusing elsewhere – covering their essentials, continuing to add to their savings, and prioritising experiences and self-expression within their discretionary spend.
So how will they afford this lifestyle-led spending?
The data has revealed that Gen Zs and Millennials are much savvier shoppers, engaging more with cashback programs and buy-now, pay-later (BNPL) services than their older generation counterparts.
Over six in 10 (63 per cent) of Gen Z and Millennials shop across different brands and platforms to find the lowest prices. Older generations rely more heavily on loyalty programs with three-quarters (73 per cent) of those ages 42+ opting for point schemes that allow them to bank up benefits for future purchases.
Similarly, half of young Aussies (48 per cent) engage with cashback programs, enabling them to earn back some of the money they spend on purchases. This drops to just a third (32 per cent) of older generations. BNPL has also become a popular tool for Gen Z and Millennials with more than three in ten (32 per cent) using the likes of CommBank’s StepPay to help them spread payments over longer periods of time.
The $1million+ that’s already been given back to young Aussies this year
The analysis comes as Cheddar celebrates its first birthday, having already helped users save more than $1 million through its cashback app.
Customers can download the app or shop online with access to hundreds of brands. It takes seconds to earn cashback, with epic new deals dropping every day, 365 days a year.
The shopping platform has experienced momentous growth over the past year, seeing a 60 per cent increase month-on-month in its user base, and over 1,000 merchants on the platform including Nike, The Iconic and Adore Beauty.
So much so, Cheddar customers are spending an extra 40 minutes a week shopping compared to other Gen Zs or Millennials, safe in mind they’re getting cashback as they go.
Helen Hey, managing director at Cheddar, said: “Young Aussies want to experience life whilst being savvier than ever with their spending. This is no mean feat which is why we’ve built Cheddar – a platform that’s native to how Gen Z and Millennials approach life. We’re more than just a shopping platform, we’re a way to help manage young Aussie’s lifestyles.
“We consistently see travel, dining and fashion as the top-performing categories and I expect this trend to continue throughout 2023 as this age group places a firmer emphasis on shared experiences and self-expression. After giving back $1 million to our users in the first year alone, we want to triple that in our second year. Our goal is to onboard everyday categories like groceries to help young Australians get more back from their everyday purchases.”