More young Aussies support small businesses using Buy Now Pay Later, finds Afterpay
Gone are the days where Buy Now Pay Later (BNPL) is only associated with big retailers.
In fact, according to Afterpay’s Next Gen Index, more Aussies under the age of 40 are shopping with small businesses using BNPL.
With a focus on two age groups: Gen Z (9 - 24 years old) and Millennials (25 to 40 years old), Afterpay recorded that 67% of all Afterpay spend in small businesses comes from these age groups.
And since last year, the Millennial collective saw a growth in small business spending of 20% year-on-year, while Gen Z’s contribution grew by 45% in the same time period.
“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,” chief strategy officer at Afterpay, Mark Teperson said.
“This demographic is set to account for nearly half of the globe’s retail spend by 2030. Their influence on the economy will only continue to grow, especially as they reach peak earning years.”
Afterpay’s latest stats showed that BNPL usage in Australia has skyrocketed since January 2020. Gen Z and Millennials’ usage grew by 174% and 110% respectively, while credit card spending remained static for those over 25 and dropped for those younger.
“Gen Z and Millennials are becoming a powerful force in the economy. Within the next ten years, they’ll represent nearly half of Australia’s total retail spend,” chief executive officer of the Australian Retailers Association, Paul Zahra said.
“BNPL has proven to be incredibly popular for young Australians who are embracing new payment options in growing numbers. It’s important that retailers can adapt to the consumer trends that are emerging, and through the Next Gen Index, business owners have access to the data, insights and tools they need to grow and innovate.”
So are young Aussies spending more with Buy Now Pay Later?
The truth is, with the volatile nature of the pandemic, younger shoppers are spending less than they did in December 2020.
Millennials are spending 5% less than they did pre-COVID, while Gen Z are spending 7% less. Whereas in December last year, spending was 10% greater than pre-COVID levels.
Interestingly, these age groups have turned away from home-style purchases like furniture and outdoor items (which were popular in December 2020). As of July 2021 (before lockdowns were in place) under 40s used Afterpay the most on recreation and experiences, including game, electronics, travel and events.
Want to try out Buy Now Pay Later? Head over to our Buy Now Pay Later hub to find out more about what options are out there! Interested in the numbers around Buy Now Pay Later? Check out our BNPL statistics report.