A quarterly report by the buy now, pay later (BNPL) business Afterpay has estimated that spending share by Millennials and Gen Z will grow to almost 50% by 2030.
The Next Gen Index is a report on the consumer spending behaviours and preferences of the two generations.
According to the report, the share of spending by both generations is expected to increase to 48% by 2030. The company claims this demonstrates their continued strong influence on the economy as they reach their peak earning years.
The report also found that Gen Z and Millennials have a growing preference for BNPL, with BNPL spending in the US growing by 230%, in comparison to a smaller increase of 43% for debit cards and a measly 8% increase for credit cards.
Spending by Gen Z and Millennials has also recovered in Australia, the US and the UK markets faster than older generations, with an average 13% increase in spend from prior to the pandemic.
Small business spending is also on the rise, with an average of 220% growth since early 2020 in this area. This makes up around 67% of all Afterpay spend on small businesses.
Afterpay CSO Mark Teperson said, “Gen Z and Millennials are driving change at the intersection of culture and commerce – so it’s no surprise they have been key adopters of Afterpay and BNPL more generally.
“Having built our business by connecting this next generation of shoppers to the best brands in the world, Afterpay is in a strong position to help its retailers navigate this demographic by providing unparalleled insights into the world’s hardest to reach customer cohorts.”
Merchant solution launch
Afterpay has also launched Afterpay iQ, a new merchant analytics platform to help companies boost their investment and growth prospects.
According to Afterpay, brands who use Afterpay iQ will be able to gain access to customer-centric analytics to help optimise investment and drive growth.
Afterpay claims the platform provides its users with AI-powered insights, visualisations and real-time data through a single self-service user interface. Brands are also able to evaluate marketing performance through the platform, alongside demographic summaries down to the store level and shopping volumes.
Afterpay iQ also provides its users with a recommendation engine that offers actions to optimise business performance based on analytics.
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