Generation Z consumers, born between 1995 and 2012, are more cautious about spending, wary about credit cards and unlikely to use traditional credit-orientated products, according to the latest Global Gen Z Report: Financial Feels from Afterpay.
Millennials initiated this trend by turning away from credit cards, and now Gen Z are looking for low-commitment solutions that are budget focused.
The report found that 94% 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.
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, while promoting their financial wellbeing.
As a generation who grew up with Netflix and Spotify subscriptions, 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.
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.
Afterpay co-founder, Nick Molnar 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.”
The Afterpay Global Gen Z Report: Financial Feels report covers the values and behaviours of Generation Z consumers, revealing key trends and take-outs on how they are managing their finances both now and for the future. 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.