Gen z/millennials credit literacy: want to engage today’s younger consumers? Educate them.
Today the consumer drives the retail world. With Millennial and Gen Z shopping expectations and shopping power on the rise, it’s important to appeal to these shoppers. In a recent survey, both Gen Z and Millennials were 10x more likely to be interested in learning about credit over other generations. This was because Gen Z and Millennial’s overall knowledge of credit (27%) was good but not great. Both generations were particularly interested in learning about alternative as well as traditional payment options and in particular 1 out of 10 wanted to understand how these options could help with their financial future.
The following insights from the survey paired with key takeaways provide a QuickTake glance on how to better engage and service the young consumer.
INSIGHT 1
Top Payment Method Both Generations are interested in Learning about is Mobile Payments
Millennials were slightly higher than Gen Z (42% versus 37%) at being more curious about mobile payments. BNPL had equal interest for both generations and interest in learning more about a store or co-brand credit card was more interesting to Gen Z (31%) than Millennials (27%).
KEY TAKEAWAY:
Empower the customer with choice. Providing flexible payment options and letting customers know about these options early in the shopping journey can help you as retailers increase your sales by making the shopping experience feel more personalized.
INSIGHT 2
One in four younger consumers admits feeling like they don’t understand credit
43% of Gen Z felt they had a decent understanding about credit but 27% felt they didn’t have a good understanding at all and 1 out of 10 described themselves as “clueless when it comes to credit.” Millennials did not describe themselves much better, with 23% saying they don’t know enough about how credit products work.
KEY TAKEAWAY:
Many young consumers don’t know how credit products work. Position your brand as an advocate in helping these young consumers understand the benefits and nuances of the program and encourage dialogue and questions.
INSIGHT 3
Millennials are actively more likely to educate themselves.
Millennials are more likely (36%) than Gen Z (27%) to prefer learning via online classes, reading on their own (42% vs. 32%) and Facebook (24% vs 17%). Gen Z respondents are more likely than Millennials to prefer obtaining the information via YouTube (40%), TikTok (27%) , Instagram(23%) and Snapchat (18%.)
KEY TAKEAWAY:
There is an opportunity for established brands to leverage digital platforms to provide reliable, accessible and dependable financial advice. Content should make managing finances approachable especially amongst Gen-Z by lowering barriers to entry and enabling access for all.
Source: A sample of 2,016 US consumers participated in the Gen Z and Millennial Appetite to Learn About Credit study through an online quantitative survey that took place from 7/26 – 8/2/2021.
