Born into a connected world, shaped by the 2008 global economic crisis and now grappling with the coronavirus pandemic, Gen Z is taking a different path from previous generations and reimaging how to buy, pay and save.

As the biggest generation of shoppers — more than 2.6 billion globally — Gen Z’s shopping and financial preferences aren’t just important — they are setting the trend for the future of retail. To better understand these preferences, Afterpay, a “shop now, pay later” online payment provider, recently released an in-depth report on Gen Z’s financial feelings and how they affect retail.

Here is what the research uncovered:

1. Flexibility comes first

It’s fair to say that Gen Zers haven’t known anything but flexibility and convenience. Raised in an entirely digital era, they’ve always communicated with friends and consumed content from anywhere at any time. They’ve also grown up with access to flexible, stop-anytime subscriptions, such as Spotify or Netflix.

So when it comes to their money, it’s no surprise that Gen Zers’ expectations are all about flexibility. “They are looking for low-commitment, straightforward solutions that are budget-focused, customer-centric and empower rather than entrap,” said Nick Molnar, co-founder of Afterpay.

Almost half (48%) of Gen Zers say they want tools that allow them to customize products and experiences, and this type of flexibility extends to how they purchase those products and experiences. They want the ability to turn on and off commitments in their life, and they like having options to rent, share or buy as well as flexible, low-commitment payment options, such as buy-now-pay-later or stop-anytime subscriptions.  

2. Wellness tops wealth

Like millennials, Gen Zers favor experiences over things, with 57% ranking happiness as a top priority and only 13% placing a priority on wealth. But this preference for happiness doesn’t mean they aren’t concerned about their finances — they are. Instead, it’s a reassessment of the role of money and ownership in their lives, with an emphasis on flexibility and financial wellness over wealth-hoarding.

As part of this focus on financial and emotional well-being over wealth, Gen Zers look for ways to reduce their financial anxiety. “They are the only generation not to have been taught finances through physical money that you can count by hand,” said Claire Madden, author of Hello Gen Z.

As a result, finances can feel fleeting and difficult to pin down. More than 8 in 10 Gen Zers in the United States between ages 18 and 21 report money as a source of significant stress. To calm these fears, Gen Zers have embraced digital apps and services that can help guide them toward a position of financial wellness — and an emotional state of greater confidence, control and calm around their finances.

They’ve also used their wallet to prioritize their emotional health over material wealth by purchasing lifestyle and experiences that express their feelings about a brand or their social or political views.

3. Cautious consumers

Another distinguishing trait of Gen Zers is their cautious nature. Having come of age during the financial crisis of 2008, when they saw their parents struggle with work and finances, as well as having seen millennials crushed by student debt, and now being heavily affected by the COVID-19 crisis, Gen Zers’ attitude is one of pragmatism, caution and a desire for stability.

Many already report that the pandemic has made them reassess their spending, making cuts and prioritizing saving. This isn’t surprising given that they’ve shown themselves to be more financially savvy than millennials and have an easier time paying off their debt and have higher credit scores than millennials did at their age.

In fact, while millennials have turned away from credit cards, Gen Zers aren’t even signing up. Ninety-four percent of Afterpay Gen Z customers link their account to a debit card.

“I personally don’t like the idea of getting a credit card, but I do like to use Afterpay because there is no interest,” said William, a 22-year-old Gen Zer from Australia.

Engaging Gen Zers may seem daunting given the generation’s frugal outlook and measured approach to spending and retail, but there are ways to reach them.

Immersed in a world where nonownership, blockchain and social networks allow them to generate a different kind of value and collect experiences rather than products, social media has become a great way to create the customizable, branded experiences as well as merge the digital and physical experiences that are intuitive to Gen Zers. Digital integration and payment platforms on social channels such as Instagram, TikTok, Snapchat or WeChat are now essential.

Another way to get on Gen Z’s radar is to tap into the values that are important to what Gen Z really wants.

“They are looking for brands that have a firm outlook on things that matter to them, such as sustainability and social responsibility. This generation likes to be ‘real’ — meaning they appreciate honesty and candidness. Brands offering open and transparent communication, and personalizing on their approach will win with this cohort,” Molnar said.