GenZ Lookbook

HI! E D N U

R

IN D N STA

Z N E GG

OK

O B K O O L S I H ABOUT T

THE WHY To gain an understanding of the Generation Z (Gen Z) segment to help drive corporate strategy, product development, business development, and to help Synchrony Financial win this emerging audience.

Within the next five years, Gen Z will become the fastest-growing generation in the workplace and the marketplace.

LOOKING FOR MORE INFORMATION OR HAVE QUESTIONS?

Contact Sheila Dreyer Van Buskirk, VP Network Research and Insights sheila.dreyer@syf.com

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OK

O B K O O L S I H ABOUT T

THE WHY To gain an understanding of the Generation Z (Gen Z) segment to help drive corporate strategy, product development, business development, and to help Synchrony Financial win this emerging audience.

Within the next five years, Gen Z will become the fastest-growing generation in the workplace and the marketplace.

LOOKING FOR MORE INFORMATION OR HAVE QUESTIONS?

Contact Sheila Dreyer Van Buskirk, VP Network Research and Insights sheila.dreyer@syf.com

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TABLE OF CONTENTS Who is Gen Z?.................................................................5 CH. 1 | OUTLOOK ON FINANCES & FUTURE

Big dreams, little understanding....................................9 Parental influence and role...........................................11 Use of traditional financial products............................12 \

Credit card use & responsibility...................................13 Digital financial tools.....................................................15 Student loans.................................................................16

GENERATIONAL DEFINITIONS FOR THIS STUDY

CH. 2 | SHOPPING & RETAIL GEN Z*

YOUNG MILLENNIALS

OLD MILLENNIALS

• BORN 1995-2001 • AGES 16-22

• BORN 1989-1994 • AGES 23-28

• BORN 1983-1988 • AGES 29-34

GEN X

BOOMERS

Retailer must-haves.......................................................21

• BORN 1965-1982 • AGES 35-52

• BORN 1946-1964 • AGES 53-71

Deals vs. rewards...........................................................22

Shopping in-store vs. online.........................................19 Experiences vs. things..................................................20

Store / brand credit card interest..................................23 * YOUNGER GEN Z are those age 18 or younger and still in high school OLDER GEN Z are those age 18 or older and not in high school

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Methodology & Sources................................................24

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TABLE OF CONTENTS Who is Gen Z?.................................................................5 CH. 1 | OUTLOOK ON FINANCES & FUTURE

Big dreams, little understanding....................................9 Parental influence and role...........................................11 Use of traditional financial products............................12 \

Credit card use & responsibility...................................13 Digital financial tools.....................................................15 Student loans.................................................................16

GENERATIONAL DEFINITIONS FOR THIS STUDY

CH. 2 | SHOPPING & RETAIL GEN Z*

YOUNG MILLENNIALS

OLD MILLENNIALS

• BORN 1995-2001 • AGES 16-22

• BORN 1989-1994 • AGES 23-28

• BORN 1983-1988 • AGES 29-34

GEN X

BOOMERS

Retailer must-haves.......................................................21

• BORN 1965-1982 • AGES 35-52

• BORN 1946-1964 • AGES 53-71

Deals vs. rewards...........................................................22

Shopping in-store vs. online.........................................19 Experiences vs. things..................................................20

Store / brand credit card interest..................................23 * YOUNGER GEN Z are those age 18 or younger and still in high school OLDER GEN Z are those age 18 or older and not in high school

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Methodology & Sources................................................24

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Z N E G S I O WH

B O R N

B E T W E E N

1995 and 2004 (This research is based on Gen Z ages 16-22)

1 IN 4 AMERICANS ARE GEN Z1 (larger than Millennials by 3 million²)

T H E M OST

Consistent with Millennials, 42% of Gen Z’ers believe

E T H N I C A L LY A N D R A C I A L LY

DIVERSE GENERATION I N

U S

H I S TO RY 3

Z smar grew up tp w cons hones a ith nd ar tantl y con e to th em. necte d But t h guilt ey don’t y abo fe ut ho el as they use t w mu hese c devic h es.

they interact more with their smartphones than with people

?

L A E D IG B A E ’R Y E WHY TH

This is higher than Gen X and Boomers.

COMPARED TO ALL OTHER GENERATIONS...

ANNUALLY REPRESENT

$44 BILLION IN SPENDING POWER1

5

BY 2020 THEY WILL BE

40%

DIGIT NATI AL VES Gen

Fewer Gen Z’ers believe people are too connected to their phones.

Gen Z is less concerned with being on phones around others

# OF SCREENS USED

BY GEN Z FOR MULTI-TASKING1 TV • Phone • Laptop • Desktop • iPod (or other portable music player)

OF ALL US CONSUMERS4

vs

2

PREFERRED BY MILLENNIALS

(consumers = those with direct purchasing power) 5|

|6

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?

Z N E G S I O WH

B O R N

B E T W E E N

1995 and 2004 (This research is based on Gen Z ages 16-22)

1 IN 4 AMERICANS ARE GEN Z1 (larger than Millennials by 3 million²)

T H E M OST

Consistent with Millennials, 42% of Gen Z’ers believe

E T H N I C A L LY A N D R A C I A L LY

DIVERSE GENERATION I N

U S

H I S TO RY 3

Z smar grew up tp w cons hones a ith nd ar tantl y con e to th em. necte d But t h guilt ey don’t y abo fe ut ho el as they use t w mu hese c devic h es.

they interact more with their smartphones than with people

?

L A E D IG B A E ’R Y E WHY TH

This is higher than Gen X and Boomers.

COMPARED TO ALL OTHER GENERATIONS...

ANNUALLY REPRESENT

$44 BILLION IN SPENDING POWER1

5

BY 2020 THEY WILL BE

40%

DIGIT NATI AL VES Gen

Fewer Gen Z’ers believe people are too connected to their phones.

Gen Z is less concerned with being on phones around others

# OF SCREENS USED

BY GEN Z FOR MULTI-TASKING1 TV • Phone • Laptop • Desktop • iPod (or other portable music player)

OF ALL US CONSUMERS4

vs

2

PREFERRED BY MILLENNIALS

(consumers = those with direct purchasing power) 5|

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CHAPTER 1

BACK TO TABLE OF CONTENTS

N O K O O OUTL

S E C N A N FI E R U T U F &

CHAPTER 1

BACK TO TABLE OF CONTENTS

N O K O O OUTL

S E C N A N FI E R U T U F &

BACK TO TABLE OF CONTENTS

CH. 1 | OUTLOOK ON FINANCES & FUTURE

THEY ARE...

GEN Z HAS BIG DREAMS FOR THEIR FUTURE...

CONFIDENT that hard work will lead to their success

78% AGREE

The only way to get ahead is through hard work.

Higher than

orking hard “I believe I am w my future up to now and setting ays wanted.” live how I’ve alw DA

70%

G KE N I ND Y TA A T S ALL R E D CTU N U A E L L L TT IT WI I L BUTWHAT OF

69%

Similar to Gen X and Boomers

Nearly all Gen Z’ers plan to own a home and a car, but few intend to be tied to mortgages or auto loans.

E, 22, FLORI

GEN Z FEMAL

THEY ARE...

PLAN TO OWN A HOME6

PLAN TO OWN A CAR7

OPTIMISTIC & EXCITED

RETIREMENT?

about educational opportunities

“I have a bright future because I graduated high school and plan on going to college.”

97%

“There are so many advances in technology and they have come so far with it. I only see it getting better and improving.”

N O PROBLEM...

92%

At this life stage, few Gen Z’ers are thinking about owning typical investment vehicles:

45%

GEN Z FEMALE, 19, ILLINOIS

EXPECT TO HAVE A RETIREMENT ACCOUNT IN THE FUTURE (401k, 403b)

GEN Z MALE, 18, OREGON

GEN Z’ERS WANT TO CARE ABOUT THE WORK THEY DO 74% OF GEN Z RANK ‘PURPOSE’ AHEAD OF A PAYCHECK5

27%

19%

CERTIFICATE OF DEPOSIT (CD)

23%

18%

IRA / ROTH IRA SAY THEY WILL HAVE A RESIDENTIAL MORTGAGE

SAY THEY WILL HAVE AN AUTO LOAN

Lower than

Lower than

43%

48%

45%

40%

47%

15%

ETF / MUTUAL FUNDS

48% GEN Z 1995-2001 (ages 16-22)

This is higher than Millennials, Gen X, and Boomers.

9|

(but similar to Boomers)

(but similar to Boomers)

YOUNG MILLENNIALS 1989-1994 (ages 23-28) OLD MILLENNIALS 1983-1988 (ages 29-34)

GEN X 1965-1982 (ages 35-52) | BOOMERS 1946-1964 (ages 53-71) | 10

BACK TO TABLE OF CONTENTS

CH. 1 | OUTLOOK ON FINANCES & FUTURE

THEY ARE...

GEN Z HAS BIG DREAMS FOR THEIR FUTURE...

CONFIDENT that hard work will lead to their success

78% AGREE

The only way to get ahead is through hard work.

Higher than

orking hard “I believe I am w my future up to now and setting ays wanted.” live how I’ve alw DA

70%

G KE N I ND Y TA A T S ALL R E D CTU N U A E L L L TT IT WI I L BUTWHAT OF

69%

Similar to Gen X and Boomers

Nearly all Gen Z’ers plan to own a home and a car, but few intend to be tied to mortgages or auto loans.

E, 22, FLORI

GEN Z FEMAL

THEY ARE...

PLAN TO OWN A HOME6

PLAN TO OWN A CAR7

OPTIMISTIC & EXCITED

RETIREMENT?

about educational opportunities

“I have a bright future because I graduated high school and plan on going to college.”

97%

“There are so many advances in technology and they have come so far with it. I only see it getting better and improving.”

N O PROBLEM...

92%

At this life stage, few Gen Z’ers are thinking about owning typical investment vehicles:

45%

GEN Z FEMALE, 19, ILLINOIS

EXPECT TO HAVE A RETIREMENT ACCOUNT IN THE FUTURE (401k, 403b)

GEN Z MALE, 18, OREGON

GEN Z’ERS WANT TO CARE ABOUT THE WORK THEY DO 74% OF GEN Z RANK ‘PURPOSE’ AHEAD OF A PAYCHECK5

27%

19%

CERTIFICATE OF DEPOSIT (CD)

23%

18%

IRA / ROTH IRA SAY THEY WILL HAVE A RESIDENTIAL MORTGAGE

SAY THEY WILL HAVE AN AUTO LOAN

Lower than

Lower than

43%

48%

45%

40%

47%

15%

ETF / MUTUAL FUNDS

48% GEN Z 1995-2001 (ages 16-22)

This is higher than Millennials, Gen X, and Boomers.

9|

(but similar to Boomers)

(but similar to Boomers)

YOUNG MILLENNIALS 1989-1994 (ages 23-28) OLD MILLENNIALS 1983-1988 (ages 29-34)

GEN X 1965-1982 (ages 35-52) | BOOMERS 1946-1964 (ages 53-71) | 10

BACK TO TABLE OF CONTENTS

CH. 1 | OUTLOOK ON FINANCES & FUTURE GEN Z 1995-2001 (ages 16-22)

SED S E N T I W ION GEN Z S S E C E R T THE GREA FTER EFFECTS A E H T D N A “Well, we went through a bankruptcy...8 years ago.

So yeah, that was not good...

Rather than $20,000 I’ll put $5,000 [on credit cards now].”

YOUNGER GEN Z still in high school (ages 18 or younger) OLDER GEN Z not in high school (ages 18 or older) YOUNG MILLENNIALS 1989-1994 (ages 23-28)

“[I learned from my mother] don’t get a credit card… Maybe I’ll probably get one when I’m older and more responsible, probably, but I don’t want to get one now.”

traditional financial product ownership is low compared to Young Millennials, their closest cohort in age

ROBBY, GEN Z MALE, 17, ORANGE COUNTY

ROBBY’S MOM

64%

OWN DEBIT CARD

42%

OWN CHECKING

ACCOUNT

Gen Z’s exposure and understanding of financial products are delayed because

t my u o d ab real e n r once into the y for c y l r t a icula hen I ge ing to p aduate t r a ot p atus w are go ndergr n m ’ “I l st arents r my u high a i c d r finan ... my p fees fo ars afte table an d d s worl ition an ave 4 ye ncially own.” u a h my t e, so I ome fin on my e c ’m degr ol to be efore I b scho endent p inde

PARENTS PAY for much of their needs.

GEN Z FEMALE, 16, INDIANA

46%

72%

77%

26%

49%

OWN CREDIT CARD (GENERAL PURPOSE)

65%

18%

30%

51%

BUT THIS MAY BE DUE TO GEN Z’S STAGE IN LIFE AS OWNERSHIP INCREASES WITH AGE

46% REPORT HAVING BEEN INSIDE A BANK IN THE LAST MONTH.8 vs

11 |

26%

70% OF MILLENNIALS

| 12

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CH. 1 | OUTLOOK ON FINANCES & FUTURE GEN Z 1995-2001 (ages 16-22)

SED S E N T I W ION GEN Z S S E C E R T THE GREA FTER EFFECTS A E H T D N A “Well, we went through a bankruptcy...8 years ago.

So yeah, that was not good...

Rather than $20,000 I’ll put $5,000 [on credit cards now].”

YOUNGER GEN Z still in high school (ages 18 or younger) OLDER GEN Z not in high school (ages 18 or older) YOUNG MILLENNIALS 1989-1994 (ages 23-28)

“[I learned from my mother] don’t get a credit card… Maybe I’ll probably get one when I’m older and more responsible, probably, but I don’t want to get one now.”

traditional financial product ownership is low compared to Young Millennials, their closest cohort in age

ROBBY, GEN Z MALE, 17, ORANGE COUNTY

ROBBY’S MOM

64%

OWN DEBIT CARD

42%

OWN CHECKING

ACCOUNT

Gen Z’s exposure and understanding of financial products are delayed because

t my u o d ab real e n r once into the y for c y l r t a icula hen I ge ing to p aduate t r a ot p atus w are go ndergr n m ’ “I l st arents r my u high a i c d r finan ... my p fees fo ars afte table an d d s worl ition an ave 4 ye ncially own.” u a h my t e, so I ome fin on my e c ’m degr ol to be efore I b scho endent p inde

PARENTS PAY for much of their needs.

GEN Z FEMALE, 16, INDIANA

46%

72%

77%

26%

49%

OWN CREDIT CARD (GENERAL PURPOSE)

65%

18%

30%

51%

BUT THIS MAY BE DUE TO GEN Z’S STAGE IN LIFE AS OWNERSHIP INCREASES WITH AGE

46% REPORT HAVING BEEN INSIDE A BANK IN THE LAST MONTH.8 vs

11 |

26%

70% OF MILLENNIALS

| 12

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CH. 1 | OUTLOOK ON FINANCES & FUTURE

D R A C T I D E CR

& P I H S R OWNE PONSIBILITY RES

EN Z UNDER

D USE BY G CREDIT CAR

& e c n e id f n o c s g n i v a s n o s u c o f

18

G E N Z ’E R S W H O PAY F O R PA R T O F T H E IR B IL L L O O K D IF F E R E NT THAN THOSE W H O D O N ’T.

14%

5%

card belongs to parent; child is an authorized user

TH E Y. ..

OWN MORE fin

ancial product

child is sole owner

s

ARE MORE SA TISFIED with th

eir financial situ

70% no access

BETTER UNDE

(A PR , H O W C

RSTAND financi

R ED IT C A R D

al products

S WORK)

vings

ARE LESS LIK

ELY to live at ho

me

ARE MORE LIK 29% SPLIT

ation

PRIORITIZE sa

?

IT R O F S Y A P O H W 41% PARENTS

e,

g d e l w o n k l ia c n better fina

card belongs to parent; child not an authorized user

11%

ITIES =

ESPONSIBIL

DR CREDIT CAR

ELY to be workin

30% GEN Z

g (full or part-ti

me)

ARE SPLIT EV

ENLY on those attending d those who’ve graduated

high school an

13 |

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CH. 1 | OUTLOOK ON FINANCES & FUTURE

D R A C T I D E CR

& P I H S R OWNE PONSIBILITY RES

EN Z UNDER

D USE BY G CREDIT CAR

& e c n e id f n o c s g n i v a s n o s u c o f

18

G E N Z ’E R S W H O PAY F O R PA R T O F T H E IR B IL L L O O K D IF F E R E NT THAN THOSE W H O D O N ’T.

14%

5%

card belongs to parent; child is an authorized user

TH E Y. ..

OWN MORE fin

ancial product

child is sole owner

s

ARE MORE SA TISFIED with th

eir financial situ

70% no access

BETTER UNDE

(A PR , H O W C

RSTAND financi

R ED IT C A R D

al products

S WORK)

vings

ARE LESS LIK

ELY to live at ho

me

ARE MORE LIK 29% SPLIT

ation

PRIORITIZE sa

?

IT R O F S Y A P O H W 41% PARENTS

e,

g d e l w o n k l ia c n better fina

card belongs to parent; child not an authorized user

11%

ITIES =

ESPONSIBIL

DR CREDIT CAR

ELY to be workin

30% GEN Z

g (full or part-ti

me)

ARE SPLIT EV

ENLY on those attending d those who’ve graduated

high school an

13 |

| 14

BACK TO TABLE OF CONTENTS

CH. 1 | OUTLOOK ON FINANCES & FUTURE

L PRODUCTS TRADITIONAL FINANCIA UT AREN’T PREVALENT... BOLS ARE. DIGITAL FINANCIAL TO guring out how fi ll ti s is Z n e G While act their future... p im ill w ts c u d ro financial p

THEY UNDE

61% 39%

42%

26%

21% HAVE THE HIGHEST EXPECTATION

SAVINGS ACCOUNT

CHECKING ACCOUNT

TRADITIONAL PRODUCTS OWNED

DENT LOANS.

Y OF STU IT L A E R E H T D RSTAN

MOBILE WALLET

PEER-TO-PEER PAYMENTS

41%

DIGITAL TOOLS USED

“I think my parents are contributing for part of [college]. But most of it might be [paid by] student loans. So, to be able to pay that off would be very important. that’s priority #1 of course...I’m going to try and work as soon as I can to help offset that payment.”

GEN Z MALE, 17, NYC METRO

EXPECT TO NEED STUDENT LOANS IN THE FUTURE CASH APP

“[It’s] wher e yo money into u can transfer someone els account. I use that in e’s sc people ge t lunch and hool when I’m in clas s.”

GEN Z FEMALE, 17, ATLANTA

15 |

Much higher than their expectation of needing a residential mortgage, auto loan, personal loan, and others

ING FOR THEIR PARENTS ARE SAV EGE COSTS CHILDREN'S COLL

H?

...BUT IS IT ENOUG

72% OF US PARENTS ARE SAVING FOR THEIR CHILD’S COLLEGE COSTS BUT ARE ON TRACK TO FILL ONLY 29% OF FUNDING GOAL BY FRESHMAN YEAR IN COLLEGE9 | 16

BACK TO TABLE OF CONTENTS

CH. 1 | OUTLOOK ON FINANCES & FUTURE

L PRODUCTS TRADITIONAL FINANCIA UT AREN’T PREVALENT... BOLS ARE. DIGITAL FINANCIAL TO guring out how fi ll ti s is Z n e G While act their future... p im ill w ts c u d ro financial p

THEY UNDE

61% 39%

42%

26%

21% HAVE THE HIGHEST EXPECTATION

SAVINGS ACCOUNT

CHECKING ACCOUNT

TRADITIONAL PRODUCTS OWNED

DENT LOANS.

Y OF STU IT L A E R E H T D RSTAN

MOBILE WALLET

PEER-TO-PEER PAYMENTS

41%

DIGITAL TOOLS USED

“I think my parents are contributing for part of [college]. But most of it might be [paid by] student loans. So, to be able to pay that off would be very important. that’s priority #1 of course...I’m going to try and work as soon as I can to help offset that payment.”

GEN Z MALE, 17, NYC METRO

EXPECT TO NEED STUDENT LOANS IN THE FUTURE CASH APP

“[It’s] wher e yo money into u can transfer someone els account. I use that in e’s sc people ge t lunch and hool when I’m in clas s.”

GEN Z FEMALE, 17, ATLANTA

15 |

Much higher than their expectation of needing a residential mortgage, auto loan, personal loan, and others

ING FOR THEIR PARENTS ARE SAV EGE COSTS CHILDREN'S COLL

H?

...BUT IS IT ENOUG

72% OF US PARENTS ARE SAVING FOR THEIR CHILD’S COLLEGE COSTS BUT ARE ON TRACK TO FILL ONLY 29% OF FUNDING GOAL BY FRESHMAN YEAR IN COLLEGE9 | 16

CHAPTER 2

G N I P P O SH L I A T E R &

op at h s o t e nces. till lik e i s r e y p e x h t e gs and rld, but n o i v w a l s a t i k ig hey see e in a d T v . i l o o y t a , Gen Z m -mortar stores nd brick-a

BACK TO TABLE OF CONTENTS

CHAPTER 2

G N I P P O SH L I A T E R &

op at h s o t e nces. till lik e i s r e y p e x h t e gs and rld, but n o i v w a l s a t i k ig hey see e in a d T v . i l o o y t a , Gen Z m -mortar stores nd brick-a

BACK TO TABLE OF CONTENTS

BACK TO TABLE OF CONTENTS

CH. 2 | SHOPPING & RETAIL

GEN Z FAVORS SHOPPING IN STORES vs. ONLINE

64%

op in Their preference to sh ther than brick-and-mortars ra flection of strictly online is a re e shopping the importance of th neration. experience to this ge

prefer shopping IN STORE vs. online

75%

Gen Z’ers are choosing to SPEND ON MATERIAL GOODS AND POSSESSIONS

prefer shopping in stores with ENGAGING IN-STORE EXPERIENCES¹⁰

(they resemble Boomers more than Millennials or Gen X in this regard)

DON’T DISCOUNT THEIR INTEREST IN THE BUYING EXPERIENCE Nearly 1 in 2 Gen Z’ers say the experience of buying something is just as important as the product itself*

45%

* Similar to Millennials and Gen X, but higher than Boomers GEN Z 1995-2001 (ages 16-22)

To view on YouTube, click here

YOUNG MILLENNIALS 1989-1994 (ages 23-28) OLD MILLENNIALS 1983-1988 (ages 29-34) GEN X 1965-1982 (ages 35-52) | BOOMERS 1946-1964 (ages 53-71)

19 |

| 20

BACK TO TABLE OF CONTENTS

CH. 2 | SHOPPING & RETAIL

GEN Z FAVORS SHOPPING IN STORES vs. ONLINE

64%

op in Their preference to sh ther than brick-and-mortars ra flection of strictly online is a re e shopping the importance of th neration. experience to this ge

prefer shopping IN STORE vs. online

75%

Gen Z’ers are choosing to SPEND ON MATERIAL GOODS AND POSSESSIONS

prefer shopping in stores with ENGAGING IN-STORE EXPERIENCES¹⁰

(they resemble Boomers more than Millennials or Gen X in this regard)

DON’T DISCOUNT THEIR INTEREST IN THE BUYING EXPERIENCE Nearly 1 in 2 Gen Z’ers say the experience of buying something is just as important as the product itself*

45%

* Similar to Millennials and Gen X, but higher than Boomers GEN Z 1995-2001 (ages 16-22)

To view on YouTube, click here

YOUNG MILLENNIALS 1989-1994 (ages 23-28) OLD MILLENNIALS 1983-1988 (ages 29-34) GEN X 1965-1982 (ages 35-52) | BOOMERS 1946-1964 (ages 53-71)

19 |

| 20

BACK TO TABLE OF CONTENTS

CH. 2 | SHOPPING & RETAIL

R: E F F O S R E E L I C I A T V E R R E E S IT R R O ME FAV O T S U C T EXCELLEN TURN POLICIES E R Y S A E D AN “A great retailer probably would be a group that’s really happy and just has positive branding behind it... Don’t hire people who aren’t happy to work there because that makes a big difference if you’re walking around and there is just a bad vibe in the store.”

S D R A W E R .

DEALS vs

LOYALTY T N A H C R E M D IL U B WITH GEN Z NOW

Leverage Gen Z’s preference to shop in stores with engaging in-store experiences to bring them to retailers and build their loyalty at this early life stage.

“You don’t necessarily have to pay full price. You can find quality and a good price on the sale rack. Marshalls and TJ Maxx are also some of my favorites, and I can find a lot of the brands that they carry like Von Maur and Nordstrom.”

Gen Z shoppers are motivated by sales and discounts instead of rewards or loyalty programs.

89% ARE VERY PRICE CONSCIOUS10

OFFER:

GEN Z FEMALE, 21, ATLANTA

GEN Z FEMALE, 18, INDIANAPOLIS

I N - S TO R E SPECIALS

FUN EXPERIENCES

LIVE EVENTS

WHAT GEN Z EXPECTS FROM RETAILERS GOOD PRICING AND “DEALS” (although Gen Z rarely compares prices) STAND BY PRODUCTS and offer a GOOD RETURN POLICY STRONG CUSTOMER SERVICE ENJOYABLE SHOPPING EXPERIENCE (clean, safe, organized stores)

WHEN SHOPPING, GEN Z’ERS EQUALLY LIKE DISCOUNTS / CASH BACK...

LOWER THAN

43% MILLENNIALS

58%

...AND FREE PRODUCTS 11 HIGHER THAN

42% MILLENNIALS 29% 21 |

| 22

BACK TO TABLE OF CONTENTS

CH. 2 | SHOPPING & RETAIL

R: E F F O S R E E L I C I A T V E R R E E S IT R R O ME FAV O T S U C T EXCELLEN TURN POLICIES E R Y S A E D AN “A great retailer probably would be a group that’s really happy and just has positive branding behind it... Don’t hire people who aren’t happy to work there because that makes a big difference if you’re walking around and there is just a bad vibe in the store.”

S D R A W E R .

DEALS vs

LOYALTY T N A H C R E M D IL U B WITH GEN Z NOW

Leverage Gen Z’s preference to shop in stores with engaging in-store experiences to bring them to retailers and build their loyalty at this early life stage.

“You don’t necessarily have to pay full price. You can find quality and a good price on the sale rack. Marshalls and TJ Maxx are also some of my favorites, and I can find a lot of the brands that they carry like Von Maur and Nordstrom.”

Gen Z shoppers are motivated by sales and discounts instead of rewards or loyalty programs.

89% ARE VERY PRICE CONSCIOUS10

OFFER:

GEN Z FEMALE, 21, ATLANTA

GEN Z FEMALE, 18, INDIANAPOLIS

I N - S TO R E SPECIALS

FUN EXPERIENCES

LIVE EVENTS

WHAT GEN Z EXPECTS FROM RETAILERS GOOD PRICING AND “DEALS” (although Gen Z rarely compares prices) STAND BY PRODUCTS and offer a GOOD RETURN POLICY STRONG CUSTOMER SERVICE ENJOYABLE SHOPPING EXPERIENCE (clean, safe, organized stores)

WHEN SHOPPING, GEN Z’ERS EQUALLY LIKE DISCOUNTS / CASH BACK...

LOWER THAN

43% MILLENNIALS

58%

...AND FREE PRODUCTS 11 HIGHER THAN

42% MILLENNIALS 29% 21 |

| 22

BACK TO TABLE OF CONTENTS

Similar to Young

CH. 2 | SHOPPING & RETAIL

Millennials,

GEN Z 1995-2001 (ages 16-22)

TERESTED GEN Z ISN’T IN R BRAND O E R O T S A G IN OWNIN CARD IT D E R C D E T IA AFFIL .

YOUNG MILLENNIALS 1989-1994 (ages 23-28) OLD MILLENNIALS 1983-1988 (ages 29-34) GEN X 1965-1982 (ages 35-52) | BOOMERS 1946-1964 (ages 53-71)

rations are

ne the way older ge

BRAND AFFILIATED CARD STORE CARD Credit card that is offered by a specific retailer and can only be used at the retailer

34%

33%

44%

47%

43%

Credit card that is offered by a retailer that also has a Visa, MasterCard, or American Express logo on it and can be used at the retailer or anywhere else where Visa, Mastercard or American Express is accepted

35%

39%

48%

54%

50%

REWARDS OR LOYALTY

believe brand cardholders receive special treatment Lower than 35%

41%

37%

(but similar to Boomers)

ONLY 1/3

55%

23 |

SECONDARY RESEARCH

Synchrony Financial leveraged existing syndicated and secondary data to outline as many insights and identify knowledge gaps before kicking off Synchrony research.

believe having a brand affiliated credit card makes them more likely to shop with that brand

TIMING:

Lower than

SECONDARY RESEARCH SOURCES

71%

72%

66%

(but similar to Boomers)

OGRAM MOST ACTIVE REWARDS PR

OF GEN Z WILL JOIN A FREQUENT SHOPPER PROGRAM WHEN OFFERED12 LOWER THAN MILLENNIALS

We collected Gen Z data during a MULTI-PHASED RESEARCH STUDY

PHASE 1:

Nor are they swayed by

26%

GY O L O D O H T E M

GEN Z

MILLENNIALS

12

• May 15 - July 14, 2017

1 Beyond Millennials: How to Reach Generation Z, Marketo 2 Move Over Millennials: Generation Z is the Retail Industry’s Next Big Buying Group, Forbes 3 Gen Z & the Future of Money, c_space 4 What is Generation Z, And What Does It Want?, Fast Company 5 Here’s What You Need to Know About Gen Z, Boss, Monster 6 Nearly All of Generation Z See Homeownership in Their Future, National Association of Realtors 7 What’s Driving Gen Z, Autotrader and Kelley Blue Book 8 The State of Gen Z 2017: Meet the Throwback Generation, The Center for Generational Kinetics 9 10th Annual College Savings Indicator Study, Fidelity Investments 10 The Next Generation of Retail, Interactions 11 Gen Z vs. Millennials: The Changing Landscape of Loyalty, CrowdTwist 12 America’s Retail Report: Redefining Loyalty for Retail, EY

46% | 24

BACK TO TABLE OF CONTENTS

Similar to Young

CH. 2 | SHOPPING & RETAIL

Millennials,

GEN Z 1995-2001 (ages 16-22)

TERESTED GEN Z ISN’T IN R BRAND O E R O T S A G IN OWNIN CARD IT D E R C D E T IA AFFIL .

YOUNG MILLENNIALS 1989-1994 (ages 23-28) OLD MILLENNIALS 1983-1988 (ages 29-34) GEN X 1965-1982 (ages 35-52) | BOOMERS 1946-1964 (ages 53-71)

rations are

ne the way older ge

BRAND AFFILIATED CARD STORE CARD Credit card that is offered by a specific retailer and can only be used at the retailer

34%

33%

44%

47%

43%

Credit card that is offered by a retailer that also has a Visa, MasterCard, or American Express logo on it and can be used at the retailer or anywhere else where Visa, Mastercard or American Express is accepted

35%

39%

48%

54%

50%

REWARDS OR LOYALTY

believe brand cardholders receive special treatment Lower than 35%

41%

37%

(but similar to Boomers)

ONLY 1/3

55%

23 |

SECONDARY RESEARCH

Synchrony Financial leveraged existing syndicated and secondary data to outline as many insights and identify knowledge gaps before kicking off Synchrony research.

believe having a brand affiliated credit card makes them more likely to shop with that brand

TIMING:

Lower than

SECONDARY RESEARCH SOURCES

71%

72%

66%

(but similar to Boomers)

OGRAM MOST ACTIVE REWARDS PR

OF GEN Z WILL JOIN A FREQUENT SHOPPER PROGRAM WHEN OFFERED12 LOWER THAN MILLENNIALS

We collected Gen Z data during a MULTI-PHASED RESEARCH STUDY

PHASE 1:

Nor are they swayed by

26%

GY O L O D O H T E M

GEN Z

MILLENNIALS

12

• May 15 - July 14, 2017

1 Beyond Millennials: How to Reach Generation Z, Marketo 2 Move Over Millennials: Generation Z is the Retail Industry’s Next Big Buying Group, Forbes 3 Gen Z & the Future of Money, c_space 4 What is Generation Z, And What Does It Want?, Fast Company 5 Here’s What You Need to Know About Gen Z, Boss, Monster 6 Nearly All of Generation Z See Homeownership in Their Future, National Association of Realtors 7 What’s Driving Gen Z, Autotrader and Kelley Blue Book 8 The State of Gen Z 2017: Meet the Throwback Generation, The Center for Generational Kinetics 9 10th Annual College Savings Indicator Study, Fidelity Investments 10 The Next Generation of Retail, Interactions 11 Gen Z vs. Millennials: The Changing Landscape of Loyalty, CrowdTwist 12 America’s Retail Report: Redefining Loyalty for Retail, EY

46% | 24

BACK TO TABLE OF CONTENTS

ont’d c Y G O L METHODO PHASE 2:

P R I M A RY R E S E A R C H C O N D U C T E D B Y

QUALITATIVE

Synchrony partnered with market research and strategy firm Chadwick Martin Bailey (CMB) to conduct an online immersion with Gen Z’ers in four US markets.

INDIANAPOLIS ORANGE COUNTY

NYC METRO

ATLANTA

This study also included an online discussion board with parents of younger Gen Z participants.

TIMING: • ONLINE IMMERSION: October 7 - 20, 2017 * amongst a select Gen Z recruits from each of the 4 markets

• IN-HOME INTERVIEWS + SHOP-A-LONGS: October 26 - November 12, 2017

PHASE 3:

QUANTITATIVE

CMB then administered a nationally representative multi-generational online quantitative study.

TIMING: • ONLINE SURVEY: December 15, 2017 - January 2, 2018

25 |

| 26

BACK TO TABLE OF CONTENTS

ont’d c Y G O L METHODO PHASE 2:

P R I M A RY R E S E A R C H C O N D U C T E D B Y

QUALITATIVE

Synchrony partnered with market research and strategy firm Chadwick Martin Bailey (CMB) to conduct an online immersion with Gen Z’ers in four US markets.

INDIANAPOLIS ORANGE COUNTY

NYC METRO

ATLANTA

This study also included an online discussion board with parents of younger Gen Z participants.

TIMING: • ONLINE IMMERSION: October 7 - 20, 2017 * amongst a select Gen Z recruits from each of the 4 markets

• IN-HOME INTERVIEWS + SHOP-A-LONGS: October 26 - November 12, 2017

PHASE 3:

QUANTITATIVE

CMB then administered a nationally representative multi-generational online quantitative study.

TIMING: • ONLINE SURVEY: December 15, 2017 - January 2, 2018

25 |

| 26

For more excerpts from our Gen Z interviews, click here