Gen Z, Millennials and their Relationship with Money, Credit, and Payments
Results have prompted generational expert and CGK founder Jason Dorsey to predict that 95% of all retailers will offer installments as a payment option by 2023
Sezzle, the leading North American, purpose-driven, payments platform, together with the Center for Generational Kinetics, a global leader in generational research, announced the results of a landmark nation-wide survey of young consumers, providing new insights into how younger generations of consumers think about personal finances, credit products, and payments.
The results, which were released to leading eCommerce merchants, retailers and select media in an invitation-only webinar, highlighted a number of trends that provide a roadmap for the future of the retail sector as it begins to reposition itself in the wake of COVID-19.
The national survey, conducted by The Center for Generational Kinetics, is the first of its kind. The study focused on understanding Gen Z and Millennial consumer attitudes towards the booming "Buy Now, Pay Later" trend, which has taken off since being introduced to the U.S. a little more than four years ago. More than 1,200 adults between the ages of 18 and 64 were surveyed by CGK between February 27, 2020 and March 2, 2020.
"A product of growing up after the Great Recession, Gen Z is wary of credit and worries about their finances more than any other generation. For retailers, it is critically important to understand how these unique attitudes shape young consumers' attitudes," commented CGK President and renowned generational expert, Jason Dorsey, whose firm partnered with Sezzle on the study.
"The data couldn't be more clear: Millennials and Gen Z consumers want options when it comes to how they pay. By 2023, I predict 95% of all direct-to-consumer retailers will be offering some form of installment-based payment solution for both online and in-store checkout," Mr. Dorsey predicts.
"We built Sezzle to give Millennial and Gen Z consumers an alternative budgeting tool that allows them to pay for purchases over time without all the pitfalls of traditional credit products," said Sezzle CEO and co-founder, Charlie Youakim. "This CGK research really reinforces why our product fits the evolving payment needs of younger generations of shoppers."
Installment-based payment programs have long been a staple of the retail sector in countries all around the world from Brazil to Australia to the UK and continental Europe. Based on the CGK study, over 90% of Gen Z and 95% of Millennial consumers are aware of installment payment options. However, largely due to the long-standing predominance of credit cards in North America, alternative payments are just now beginning to take off in the US and Canada as younger consumers find themselves sidelined by the traditional credit market.
The survey conducted in partnership with CGK is the first comprehensive and publicly-released study to delve into the rapidly accelerating installments-based payments sector. The results of this seminal study provide a range of insights into how each generation of consumers approaches personal finances, credit, and payments.
Several other key insights support the consumer viewpoint that installment payments should be on the forefront of every retailer's mind. Sezzle and CGK uncovered the following consumer stats relating to installment payments:
• Consumers are using digital payment services (75%) more than traditional banking apps (67%);
• 81% of consumers indicate that they would at least sometimes use installment payments if they were available with 63% of Millennials either loving or viewing installment payments as a helpful option;
• Over half (53%) of consumers are likely to use installment payments if it is available at their favorite store;
• If installment payments were offered, 60% of consumers would try a new store or website and 65% of consumers would shop more often;
• Installment payments with no fees or interest is the most ideal feature for consumers
• Consumers are far more likely to use an installment payment solution if it helps build their credit.
Chris Dolan, VP of Partnerships at Sezzle, who will lead the webinar along with Mr. Dorsey notes, "We had already seen the positive impact that installment payments have had on converting shoppers into buyers. This study went beyond the transactional data to bring to light some of the additional benefits retailers gain from offering installments to their customers in terms of trust, satisfaction, and loyalty."
The Future of Payments, a landmark nation-wide study which sheds light on Gen Z and Millennial consumer behaviors and sentiments towards spending, credit, and payments.
Sezzle will be releasing additional data and insights from its on-going research initiatives to its merchant partners, some of which will be shared with select media. Additional information related to Sezzle's and CGK's joint "Future of Payments" study can be accessed here.
• The Future of Payments, a landmark nation-wide study which sheds light on Gen Z and Millennial consumer behaviors and sentiments towards spending, credit, and payments.
• Members of the media and other interested parties can sign up for the Sezzle and CGK webinar here.
• Sezzle will be releasing additional data and insights from its on-going research initiatives to its merchant partners, some of which will be shared with select media. Additional information related to Sezzle's and CGK's joint "Future of Payments" study can be accessed here.