Inflation is at a four-decade high, forcing consumers to be more wary of their purchasing habits and impacting retailers’ much needed recovery following the loosening of covid-19 measures. However, a recent survey by Coresight Research still found a positive consumer sentiment toward spending, despite inflation, which further suggested that despite their willingness to spend, shoppers are also looking for ways to save money too.
In response, a new report by Afterpay has been published detailing how millennials and Gen Z, or New Gen, consumers are planning to save this money, with the payment provider stating that “consumers’ penchant for finding new paths to financial freedom has steadily grown”. Content from the report has been derived from an analysis of data from an online survey conducted by Afterpay, in partnership with Coresight Research, consisting of 500 consumers in the US and Canada.
Centred around the use of ‘buy now, pay later’ (BNPL) options, Afterpay highlighted three insights generated by the report, suggesting the younger generation’s use of technology in their money saving plans.
Using BNPL as a budgeting tool
Out of those surveyed, Afterpay noticed a trend in BNPL users optimising the payment method as a budgeting tool to counteract inflation. According to the firm, around 39 percent of shoppers have used BNPL more due to covid-19 and inflation, a percentage that rises to 49 among Gen Z.
Seeking value and discounts
Despite evidence showing that Next Gen shoppers want to spend, the report stated that they were most likely to seek out value and discounts when shopping. Product pricing was found to be the most important criteria when participants were asked how they decide where to shop, with many suggesting that they only purchase from select brands during sales and markdowns.
In these periods, Afterpay said shoppers of all ages were using BNPL, including Gen X, whose spending was up 15 percent during the Black Friday shopping period for 2021.
Spending on experiences
In a poll from the report, Afterpay found that experiences and travel were the most popular sectors for Next Gen shoppers to spend their money on, with recreation coming out as one of the fastest growing categories for Gen Z and Millennials. While experiences were expected to benefit the most from increased spending over the next 12 months, apparel and footwear came in third on the list, with an expected increase of 23 percent over the same period.