Research & Thought Leadership
Understanding Gen Z
Synchrony’s 2018 Research Findings
June 2018
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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
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Highlights of Generational Differences
4
Global/National Event | Descriptors | Innovation*
1965 – 198236 – 53
Fall of Berlin Wall
Gulf War
AIDS
Independent
Free Agents
Internet, MTV
Mobile Phone
1983 – 199424 – 35
9/11 Attacks
Optimistic
Collaborative
Confident
Tech Savvy
Google, Facebook
Smartphone
1995 - 200414 – 23
Great Recession
Realist
High Expectations
Digital Natives
Apps
Social Games
Tablet Devices
BORN 1946 – 1964AGE 54 – 72
Vietnam
Moon Landing
Civil/Women’s
Rights
Experimental
Innovators
Hard Working
Personal
Computers
*See Appendix
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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
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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
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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
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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
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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
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A majority of Gen Z plan to own a house (97%)
and a car (92%)*
10
27% 43% 48%
Gen ZYounger
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
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Research & Thought Leadership
2. Less Intention to Own Traditional Financial Products
(Except student loans)
11
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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 orLine of Credit
16
Pay Day or CashAdvance Loan
25
Auto Loan
41
0%
20%
40%
60%
80%
100%
Student Loans
24
Personal Loans
11
Title Loan
11
Online installmentloans
Gen Z
Young Millennials
Old Millennials
Gen X
Boomers
82% intend to go
to college*
*See Appendix
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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 4138
32
26
0%
20%
40%
60% % Enrolled in College*
Ge
n Z
Yo
un
g M
ille
nn
ial
Ge
n X
Bo
om
er
Old
er
Mill
en
nia
l
More Gen Z are enrolled in college than Boomers in 1970. College enrollment has steadily increased over the years and generations
From 1980-2014, average college tuition grew by
~260%, compared to the Consumer Price Index
increase of 120%*
*See Appendix13
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Gen Z’ers use few traditional financial products, but that is most likely due to their life stage
39%
55%
62% 61%
67%
42%
65%
71%
75%
83%
Gen ZYoung
Millennials
Old
MillennialsGen X Boomers
Savings
Account
Checking
Account
14
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Gen Z’ers show a preference for using cash or debit card above all other payment methods
15
“[A debit card is better than a credit card because] you are
not tempted to spend more. The debit card uses the actual
money from your account. I think the credit card does too,
but over time you have to pay it back.”
– Eli, Age 16, Indianapolis
43%
60% 60%55% 53%
79%
73% 74% 75%
70%
Debit Card
Cash
Credit Card
Gen ZYoung
Millennials
Old
MillennialsGen X Boomers
67%
54% 55% 57%
50%
(Preference: Among those who own the product)
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Gen ZYoung
Millennials
Old
MillennialsGen X Boomers
Influenced by life-stage and lack of understanding, Gen Z’ersexpectation of owning credit cards are lower than Millennials / Gen X
16
55%
61%65%
71%68%
General
Purpose
Credit Card
Store
Credit Card
34% 33%
44%47%
43%
Likelihood of owning or using in the future (% Agree)
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The majority of Gen Z may not yet be utilizing traditional financial options but they are highly connected to digital financial tools.
17
“Cash App. [It’s] where you can transfer money into
someone else’s account. I use that in school when people
go get lunch and I’m in class.”
– RaKya, Age 17, Atlanta
(has a checking account & debit card, no credit card)
39%42%
vs
61%
26%
21%
Have a
checking account
Have a
savings account
Use PayPal
Use mobile wallet
(Starbucks,
ApplePay)
Use peer-to-peer
payments (Venmo,
Cash App)
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©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.
Research & Thought Leadership
3. Shop in-stores and browse online
Gen Z’ers seek seamless integration of online and
brick-and-mortar shopping experience
18
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Growing up as digital natives, Gen Z does not find online shopping as much of a draw and, as a result, says they prefer to shop in-store
19
64% prefer shopping in store vs. online*
75% prefer shopping in stores with engaging in-store experiences*
Shops online check availability, compare styles and options, and
find local store
Preference is most likely also correlated to heavy cash and debit usage among Gen Z- making it less
friendly to buy and return items online
*See Appendix
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Gen Z prefers shopping in-store for most product categories. 1/4th
prefers shopping online for appliances, electronics and music
90%
66%
63%
59%
58%
53%
53%
51%
49%
38%
11%
4%
16%
20%
18%
15%
15%
26%
19%
24%
In-store
Online
20
Groceries
Furniture
Everyday household items (non-grocery)
Accessories/Shoes
Clothes
Cosmetics, health/beauty products
Automotive supplies
Appliances/Electronics
Sporting goods/Fitness equipment
Music equipment
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Nearly 1 in 2 Gen Z believe the experience of buying something is just
as important as the product itself
21
44% Buying experience is = product itself
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While Gen Z is loyal to certain brands, in-store customer experience is still paramount
22
“GO-TO”
RETAILERS…
EVERYDAY
DEALS
FLEXIBLE
RETURN
POLICY
SUPERIOR
CUSTOMER
SERVICE
ENGAGING
EXPERIENCE
RELEVANT
BRANDS
“GO-TO” RETAILERS…
©2018 Synchrony. All rights reserved. No reuse without express written consent from Synchrony.
Research & Thought Leadership
4. Focuses more on everyday good value and discounts vs. rewards
Gen Z’ers lack awareness and understanding of how to garner value from
retail reward programs
23
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Gen Z’ers are motivated to shop with discounts and savings
24
“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.”
– Brooke, Age 18, Indianapolis
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Gen ZYoung
Millennials
Old
MillennialsGen X Boomers
Gen Z’ers don’t yet equate credit rewards/loyalty programs to the discounts or savings they seek
55%
71% 72%
66%
57%
26%
35%
41%37%
28%
Having a brand
affiliated credit
card that earns
rewards makes
them more likely to
shop with that
brand
I believe brand
cardholders
receive special
treatment
25
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Research & Thought Leadership
5. These digital natives feel less guilt about being connected to their devices
26
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Regardless of where they shop, Gen Z’ers are heavy users of mobile devices
27
“I interact more with my smartphone than I do with people” (% agree)
“People are too connected to their devices these days” (% agree)
“I try to stay off my devices as much as possible when with others” (% agree)
38%31%12% 42%
68% 74% 79% 84%66%
50% 63%62%
62%
76%
43%
Gen Z Young
Mill.
Old
Mill.Gen X Boomers
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Research & Thought Leadership
Recommendations
28
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Connect with these digital natives where
they are
Prepare for high expectations around
a full, seamless digital experience
29
RETAIL OPPORTUNITY
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Make in-store shopping a breeze
30
…and an engaging, fun
way.
Surprise and delight with
constant changing
inventory, design and
messaging.
Ensure associates can
link to online experience
RETAIL OPPORTUNITY
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Embrace social media
31
Personalize deals/sales for each customer
RETAIL OPPORTUNITY
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Use credit conversations to drive
financial education around positives of financing and credit
cards
32
RETAIL OPPORTUNITY
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Research & Thought Leadership
Questions?
33
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Research & Thought Leadership
Appendix
34
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Secondary Research Sources
35
• Slide 12 Getting to Know Gen Z, Barnes & Noble
• Slide 13 National Center for Education Statistics
• Slide 13 5 Facts About Student Loans, Pew Research
Center
• Slide 13 College Has Gotten 12 Times More Expensive in
One Generation, Mother Jones
• Slide 13 Here’s How Much the Average Student Loan
Borrower Owes When They Graduate, CNBC
• Slide 13 This Chart Shows How Quickly College Tuition
Has Skyrocketed Since 1980, Business Insider
• Slide 19 The Next Generation of Retail, Interactions
• Slide 3 Meet Generation Z. Marketing’s Next Big Audience,
Marketo
• Slide 3 Gen Z & the Future of Money, c_space
• Slide 3 Meet Generation Z, the ‘millennials on steroids’ who
could lead the charge for change in the US, Business
Insider
• Slide 3 Move Over Millennials: Generation Z is the Retail
Industry’s Next Big Buying Group, Forbes
• Slide 3 The Power of Gen Z Influence, Barkley
• Slide 4 Adapted from UNC Kenan-Flagler Business School
• Slide 10 Nearly All of Generation Z See Homeownership in
Their Future, National Association of Realtors
• Slide 10 What’s Driving Gen Z, Autotrader and Kelley Blue
Book
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Base Notes
• Slide 9: Base: Gen Z population under age 18 who own or have ever used a
credit card (n=108) ● Q18: “Who is the legal cardholder of the credit card you
use?” ● Q19: “Who is responsible for paying the bill on the credit card you use?”
• Slide 10: Base: All respondents, series split in half. Residential Mortgage: Gen Z
(n=1,003), Young Millennials (n=252), Old Millennials (n=251). Auto Loan: Gen Z
(n=1,007), Young Millennials (n=250), Old Millennials (n=250). ● Q20: How likely
are you to own/use each of these types of financial products in the future? Top 2
Box Likelihood
• Slide 12: Base: All respondents, series split in half. Gen Z: Student Loan,
Residential Mortgage, Title Loan, Online Installment Loans (n=1,003). Home
Equity Loan, Personal Loans (n=1,005). Pay Day, Auto Loan (n=1,007). Young
Millennials: Student Loan (n=249). Residential Mortgage (n=252). Title Loan
(n=247). Online Installment Loans, Home Equity Loan, Pay Day (n=251).
Personal Loans (n=253). Auto Loan (n=250). Old Millennials: Student Loan,
Home Equity Loan, Auto Loan, Title Loan (n=250). Residential Mortgage, Pay
Day, Personal Loans, Online Installment Loans (n=251). Gen X: Residential
Mortgage, Title Loan (n=249). Pay Day, Auto Loan, Personal Loans, Online
Installment Loans (n=250). Student Loan, Home Equity Loan (n=251). Boomers:
Home Equity Loan, Personal Loans, Title Loan, Online Installment Loans
(n=250). Residential Mortgage, Pay Day, Auto Loan, Student Loan (n=251). ●
Q20: How likely are you to own/use each of these types of financial products in
the future?
• Slide 14: Base: All respondents: Gen Z (n=2009), Young Millennials (n=501),
Older Millennials (n=501), Gen X (n=500), Boomers (n=501) ● Q13: Which of
these types of financial products do you currently own or have ever used? Select
all that apply.
• Slide 15: Base: Cash – All respondents: Gen Z (n=2,009), Young Millennials
(n=501), Older Millennials (n=501), Gen X (n=500), Boomers (n=501). Those
who own/have ever used the respective payment options – Debit Card: Gen Z
(n=1,331), Young Millennials (n=386), Older Millennials (n=405), Gen X (n=378),
Boomers (n=410); Credit Card: Gen Z (n=826), Young Millennials (n=321), Older
Millennials (n=364), Gen X (n=379), Boomers (n=424) ● Q23: When shopping
for everyday items (like groceries or gas), how likely are you to use each of the
following tools to pay?
• Slide 16: Base: All respondents, series split in half. Store credit card: Gen Z
(n=1,006), Young Millennials (n=251), Old Millennials (n=251), Gen X (n=249),
Boomers (n=251). General Purpose credit card: Gen Z (n=1,004), Young Millennials
(n=249), Old Millennials (n=250), Gen X (n=249), Boomers (n=250). ● Q20: How
likely are you to own/use each of these types of financial products in the future?
Select all that apply.
• Slide 17: Base: All respondents: Gen Z (n=2009) ● Q13: Which of these types of
financial products do you currently own or have ever used? Select all that apply.
• Slide 20: Base: All respondents: Gen Z (n=2009) ● Q10: In general, how do you
prefer to shop for and purchase the following products?
• Slide 21: Base: Gen Z, series split in half (n=1,003). ● Q8: How much do you agree
or disagree with the following statements?: The experience of buying something is
just as important as the product itself. Top 2 Box Agree
• Slide 25: Base: All respondents, series split in half. Special treatment: Gen Z
(n=1,116), Young Millennials (n=278), Old Millennials (n=279), Gen X (n=276),
Boomers (n=279). ● Q21: How strongly do you agree or disagree with each of the
following statements? Brand affiliated credit cardholders receive special treatment.
Base: Those who own/have ever used a brand affiliated credit card that earns
rewards: Gen Z (n=227, Young Millennials (n=96), Old Millennials (n=163) ● Q21:
How strongly do you agree or disagree with each of the following statements?
Having a brand affiliated credit card that earns rewards makes me more likely to
shop with that brand.
• Slide 27: Base: All respondents, series split in half. Stay off devices: Gen Z
(n=1,004), Young Millennials (n=251), Old Millennials (n=250), Gen X (n=251),
Boomers (n=251). I interact more with my smartphone: Gen Z (n=1,003), Young
Millennials (n=250), Old Millennials (n=251), Gen X (n=250), Boomers (n=250). Too
connected to devices: Gen Z (n=1,004), Young Millennials (n=251), Old Millennials
(n=249), Gen X (n=250), Boomers (n=250). ● Q8: How much do you agree or
disagree with the following statements? Top 2/Bottom 2 Box Agree
36
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