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Understanding Gen Z · PDF file 2018-09-10 · Z purchasing power Collective Gen Z purchasing power, factoring in earned income Gen Z indirect spending power, due to influence on household

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  • Research & Thought Leadership

    Understanding Gen Z

    Synchrony’s 2018 Research Findings

    June 2018

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    Planning Online Immersion Meet-Ups Online Survey

    Roadshow Gen Z

    Presentations

    SEPTEMBER 2017 OCTOBER 2017 OCTOBER/NOVEMBER 2017 DECEMBER 2017 MARCH 2018

    Gen Z Online Immersion

    • 75 Gen Z recruits

    • 14-day online immersion

    • Ages 16-22

    • October 7-20, 2017

    Meet-Ups

    • 16 Gen Z recruits

    • In-home interview, followed by

    shopalong

    • 4 recruits in each of 4 regions:

    NYC metro, Atlanta, Indianapolis,

    Orange County

    • 2 weekends in 2 cities: October

    28-29 & November 11-12, 2017

    4,012 Online Survey respondents

    • Gen Z: 2,009

    • Young Millennials: 501

    • Old Millennials: 501

    • Gen X: 500

    • Boomers: 501

    • Census balanced based on region

    and gender per generation group

    • Collected between December 15,

    2017 and January 2, 2018

    • LOI 15 minutes (median)

    • Gen Z respondents weighted

    based on age and gender

    Parents Online Immersion

    • 12 parents of teen Gen Z recruits

    • 3-day online immersion

    • Parents of Gen Z ages 16-18

    • October 14-16, 2017

    Methodology Summary

    2

    QUALITATIVE QUANTATATIVE

    References to data sourced from external resources are cited with an asterisk (*) with full source information provided in Appendix.

    All data sources without an asterisk is sourced from Synchrony’s original research.

    All product names, logos, and brands are property of their respective owners. All company, product and service names used in

    this presentation are for identification purposes only. Use of these names, logos, and brands does not imply endorsement.

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    Why Focus On Gen Z?

    3

    $44

    billion $143

    billion

    Collective Gen

    Z purchasing

    power

    Collective Gen

    Z purchasing

    power, factoring

    in earned

    income

    Gen Z indirect

    spending

    power, due to

    influence on

    household

    purchasing

    decisions*

    • Gen Z is 26% of the U.S. population,

    larger than Millennials by 3 million*

    • Becoming the fastest-growing

    generation in the workplace and the

    marketplace in next 5 years*

    • The most ethnically and racially

    diverse generation in U.S. history

    (48% non-Caucasian vs. 44%

    Millennials)*

    $333

    billion

    *See Appendix

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    Highlights of Generational Differences

    4

    Global/National Event | Descriptors | Innovation*

    1965 – 1982 36 – 53

    Fall of Berlin Wall

    Gulf War

    AIDS

    Independent

    Free Agents

    Internet, MTV

    Mobile Phone

    1983 – 1994 24 – 35

    9/11 Attacks

    Optimistic

    Collaborative

    Confident

    Tech Savvy

    Google, Facebook

    Smartphone

    1995 - 2004 14 – 23

    Great Recession

    Realist

    High Expectations

    Digital Natives

    Apps

    Social Games

    Tablet Devices

    BORN 1946 – 1964 AGE 54 – 72

    Vietnam

    Moon Landing

    Civil/Women’s

    Rights

    Experimental

    Innovators

    Hard Working

    Personal

    Computers

    *See Appendix

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    SUMMARY: 5 Ways Gen Z Differs From Millennials

    1. A delay in adulting and shift in parenting approach post-

    recession has led to Gen Z being quite naïve about financial

    matters

    2. Less intention to own traditional financial products (except

    student loans) but highly connected to digital payment tools.

    3. Prefers to shop and purchase in brick-and-mortar stores but

    browses online.

    4. Focuses more on everyday value and discounts vs. rewards

    programs and lacks the understanding of how to garner value

    from loyalty programs.

    5. Feels less guilty about being connected to their devices

    5

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    Research & Thought Leadership

    1. Naïve About Financial Matters

    Gen Z dreams big for its future but has little

    understanding of what it will take besides college loans

    6

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    Effects of Great

    Recession color

    Gen Z’s outlook on

    financial products

    7

    “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 mother, Orange County

    “[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, Age 17, Orange County

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    Much of Gen Z’s

    exposure to financial

    products is delayed

    8

    “[My parents] definitely have groceries

    for me, they take me to dinner. I get

    some extra money here and there. I

    don’t have to pay rent…I know when I

    get to a certain point, I am going to have

    to pay my car insurance and health

    insurance and stuff like that.”

    – Brooke, Age 18, Indianapolis

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    By paying for their credit card bill, parents may be stagnating Gen Z’s financial maturity

    9

    Gen Z under

    age 18 with use

    of a credit card:

    Gen Z pays

    the full balance

    Gen Z sometimes/

    typically contributes

    Parents pay

    the full balance

    Who pays for

    the credit card

    bill? 30% 29% 41%

    30%

    70%

    Has access to

    credit card

    No access

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    A majority of Gen Z plan to own a house (97%)

    and a car (92%)*

    10

    27% 43% 48%

    Gen Z Younger

    Millennials

    Older

    Millennials

    R E S I D E N T I A L M O R T G A G E

    25% 40% 47%

    A U T O L O A N

    But few expect a mortgage or auto loan in their future

    Likelihood to Own in Future (%4-5)

    *See Appendix

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    Research & Thought Leadership

    2. Less Intention to Own Traditional Financial Products

    (Except student loans)

    11

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    Besides student loans, Gen Z’ers expectation of owning financial products are lower than Millennials and Gen X

    12

    Likelihood of owning or using in the future (% Agree)

    27

    0%

    20%

    40%

    60%

    80%

    100%

    Residential Mortgage

    18

    Home Equity Loan or Line of Credit

    16

    Pay Day or Cash Advance Loan

    25

    Auto Loan

    41

    0%

    20%

    40%

    60%

    80%

    100%

    Student Loans

    24

    Personal Loans

    11

    Title Loan

    11

    Online installment loans

    Gen Z

    Young Millennials

    Old Millennials

    Gen X

    Boomers

    82% intend to go

    to college*

    *See Appendix

  • ©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.

    Share of students graduating with debt has increased:

    • 66% of college seniors in 2011-2012 took out a loan

    • 50% of college seniors in 1989-1990 took out a loan*

    Gen Z: College, student loans and debt

    $9,450

    $29,400

    $37,200

    0

    5,000

    10,000

    15,000

    20,000

    25,000

    30,000

    35,000

    40,000

    1993-Gen X 2012-Millennials 2016 Gen Z

    Avg. student debt at

    graduation*40 41

    38

    32

    26

    0%

    20%

    40%

    60% % Enrolled in College*

    G e

    n Z

    Y o

    u n

    g M

    ill e

    n n

    ia l

    G e

    n X

    B o

    o m

    e r

    O ld

    e r

    M ill

    e n

    n ia

    l

    More Gen Z are enrolled in college than Boomers in 1970. College enrollment has steadily increased over the years and genera

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