HI! UNDERSTANDINGGENZ
GENERATIONAL DEFINITIONS FOR THIS STUDY
GEN Z*
• BORN 1995-2001
• AGES 16-22
GEN X
• BORN 1965-1982
• AGES 35-52
YOUNG MILLENNIALS
• BORN 1989-1994
• AGES 23-28
BOOMERS
• BORN 1946-1964
• AGES 53-71
OLD MILLENNIALS
• BORN 1983-1988
• AGES 29-34
* 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
WHO IS GEN Z?
WHY THEY’RE A BIG DEAL? ANNUALLY REPRESENT $44 BILLION IN SPENDING POWER 1 THE MOST ETHNICALLY AND RACIALLY DIVERSE GENERATION IN US HISTORY 3 BY 2020 THEY WILL BE OF ALL US CONSUMERS4 40% (larger than Millennials by 3 million²) 1 IN 4 AMERICANS ARE GEN Z 1
(consumers = those with direct purchasing power)
1995 and 2004 BORN BETWEEN
(This research is based on Gen Z ages 16-22)
Consistent with Millennials, 42% of Gen Z’ers believe they interact more with their smartphones than with people
This is higher than Gen X and Boomers. TV • Phone • Laptop • Desktop
DIGITAL GenNATIVES Z grew up with smartphones and are constantly connected to them.
But they don’t feel as guilty about how much they use these devices.
COMPARED TO ALL OTHER GENERATIONS...
Fewer Gen Z’ers believe people are too connected to their phones.
Gen Z is less concerned with being on phones around others
iPod (or other portable music player) # OF SCREENS USED BY GEN Z FOR MULTI-TASKING 1 2 PREFERRED BY MILLENNIALS vs
FINANCES & FUTURE
GEN Z HAS BIG DREAMS FOR THEIR FUTURE...
“I believe I am working hard now and setting my future up to live how I’ve always wanted.”
GEN Z FEMALE, 22, FLORIDA
CONFIDENT that hard work will lead to their success THEY ARE...
78% AGREE
The only way to get ahead is through hard work.
Higher than Similar to Gen X and Boomers
70%69%
OPTIMISTIC & EXCITED about educational opportunities THEY ARE...
“I have a bright future because I graduated high school and plan on going to college.”
GEN Z MALE, 18, OREGON
“There are so many advances in technology and they have come so far with it. I only see it getting better and improving.”
GEN Z FEMALE, 19, ILLINOIS
GEN Z’ERS WANT TO CARE ABOUT THE WORK THEY DO
74% OF GEN Z RANK ‘PURPOSE’ AHEAD OF A PAYCHECK5
This is higher than Millennials, Gen X, and Boomers.
BUT LITTLE UNDERSTANDING OF WHAT IT WILLACTUALLY TAKE
Nearly all Gen Z’ers plan to own a home and a car, but few intend to be tied to mortgages or auto loans.
NO
At this life stage, few Gen Z’ers are thinking about owning typical investment vehicles:
GEN Z WITNESSED THE GREAT RECESSION AND
THE AFTER EFFECTS
“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].”
ROBBY’S MOM
“I’mnotparticularlyconcernedaboutmy financialstatuswhenIgetintothereal world...myparentsaregoingtopayfor mytuitionandfeesformyundergraduate degree,soIhave4yearsafterhigh schooltobecomefinanciallystableand independentbeforeI’monmyown.”
“[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.”
ROBBY, GEN Z MALE,
17, ORANGE COUNTY
Gen Z’s exposure and understanding of financial products are delayed because PARENTS PAY for much of their needs.
GEN Z FEMALE, 16, INDIANA
GEN Z 1995-2001 (ages 16-22)
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)
traditional financial product ownership is low compared to Young Millennials, their closest cohort in age
PURPOSE)
OWNERSHIP & RESPONSIBILITY
CREDIT CARD RESPONSIBILITIES = better financial knowledge, focus on confidencesavings &
GEN Z’ERS WHO PAY FOR PART OF THEIR BILL LOOK DIFFERENT THAN THOSE WHO DON’T.
THEY...
OWN MORE financial products
ARE MORE SATISFIED with their financial situation BETTER UNDERSTAND financial products (APR, HOW CREDIT CARDS WORK)
PRIORITIZE savings
ARE LESS LIKELY to live at home
ARE MORE LIKELY to be working (full or part-time)
ARE SPLIT EVENLY on those attending high school and those who’ve graduated
TRADITIONAL FINANCIAL PRODUCTS AREN’T PREVALENT... BUT DIGITAL FINANCIAL TOOLS ARE.
“[It’s]
GEN Z FEMALE, 17, ATLANTA
While Gen Z is still figuring out how financial products will impact their future...
Much higher than their expectation of needing a residential mortgage, auto loan, personal loan, and others THEY UNDERSTAND THE
“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
PARENTS ARE SAVING FOR THEIR CHILDREN'S COLLEGE COSTS ...BUT IS IT ENOUGH?
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
& RETAIL
Gen Z may live in a digital world, but they still like to shop at brick-and-mortar stores, too. They seek savings and experiences.
GEN Z FAVORS
SHOPPING IN STORES vs. ONLINE
prefer shopping IN STORE vs. online 64%
prefer shopping in stores with ENGAGING IN-STORE EXPERIENCES¹⁰ 75%
Their preference to shop in brick-and-mortars rather than strictly online is a reflection of the importance of the shopping experience to this generation.
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*
Gen Z’ers are choosing to SPEND ON MATERIAL GOODS AND POSSESSIONS (they resemble Boomers more than Millennials or Gen X in this regard) 45%
* Similar to Millennials and Gen X, but higher than Boomers
FAVORITE RETAILERS OFFER: EXCELLENT CUSTOMER SERVICE AND EASY RETURN POLICIES
“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.”
GEN Z FEMALE, 21, ATLANTA
BUILD MERCHANT LOYALTY 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.
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)
DEALS vs. REWARDS
“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
GEN Z ISN’T INTERESTED IN OWNING A STORE OR BRAND AFFILIATED CREDIT CARD
Similar to Young Millennials, the way older generations are.
STORE CARD
Credit card that is offered by a specific retailer and can only be used at the retailer
Express logo on it and can be used at the retailer or anywhere else where Visa, Mastercard or American Express is accepted
26%
Nor are they swayed by REWARDS OR LOYALTY
55% believe brand cardholders receive special treatment believe having a brand affiliated credit card makes them more likely to shop with that brand
GEN Z 1995-2001 (ages 16-22)
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)
METHODOLOGY
We collected Gen Z data during a MULTI-PHASED RESEARCH STUDY
PHASE
1: SECONDARY RESEARCH
Synchrony Financial leveraged existing syndicated and secondary data to outline as many insights and identify knowledge gaps before kicking off Synchrony research.
TIMING:
• May 15 - July 14, 2017
SECONDARY RESEARCH SOURCES
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
METHODOLOGY cont’d
PHASE 2: 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.
This study also included an online discussion board with parents of younger Gen Z participants.
TIMING:
• ONLINE IMMERSION: October 7
• IN-HOME INTERVIEWS + SHOP-A-LONGS:
PHASE 3: QUANTITATIVE
CMB then administered a nationally representative multi-generational online quantitative study.
TIMING:
• ONLINE SURVEY: December 15, 2017 - January 2, 2018
PRIMARY RESEARCH CONDUCTED
For more excerpts from our Gen Z interviews, click here