Millennials Are Influencing New Rules on Pay
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Built by Millennials for Millennials is the underlying mentality fostering payments platform Afterpay, and the product innovations it delivers. Lizzy Eisenberg, director of market development at Afterpay, shared how this cohort is rewriting the rules of spending.
Shaped by their past experiences — growing up during the 2008 recession and later accumulating $1.5 trillion in student loan debt — Millennials are “fiscally responsible and mindful consumers,” in the words of Eisenberg.
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Not just transfixed by the latest fad (matcha lattes, as Eisenberg joked), Millennials are brushing power consumer territory and should be acknowledged for their unique buying behavior. Eisenberg stressed the importance of speaking to the misunderstood Millennial generation — “the biggest generation in the U.S. this year.” They represent spending power of more than $600 billion in the U.S. and assume over half of the workforce. One in every three dollars is spent by Millennials.
How they spend is different from previous generations. Operating with an aversion to credit card debt from tightened purse strings in the past, some 63 percent of Millennials don’t own a credit card. As such, they’re “early adopters” of payments tools, and retailers are benefiting by building increased customer loyalty and average order value, Eisenberg shared.
Not only shaped by their past experiences, Millennial shoppers are impressionable and look to influencers for inspiration, education (in the form of tutorials or how-to videos popularized on YouTube and Instagram stories) and for insight on what to purchase (over 68 percent).
“Influencers are experts in driving discovery and commerce,” Eisenberg reiterated.
Citing use cases from influencer-led beauty brand: Summer Fridays and Morphe, “an expert in collaborating with beauty influencers” from Afterpay’s merchant directory, which “is driving 4 million new leads a month to our brands,” it’s clear modern payment tools are more importantly “conversion tools.” For the former, more than 25 percent of shoppers use Afterpay at checkout; and for the latter, a 52 percent increase in AOV was seen after adding Afterpay. “They know how to talk to the Millennial audience, and they’re doing a great job doing it,” Eisenberg said.
Eisenberg reiterated that Afterpay is “not a credit product,” and can benefit brands in unique ways. For installment products, there is an advantage in allowing customers to divide payments and afford more items or higher-value products. For makeup brands, it equates to allowing consumers to get the entire look, while skin-care brands are enabling consumers to build a regimen — obtaining the items now, paying later. All of which adds up at the checkout, at which point cart abandonment becomes a lesser concern. With the aid of conversion tools such as Afterpay, consumers experience no interest or added fees, aside from late fees.
But what about the shopping behavior of Generation Z? “They want to spend their own money and not get into debt,” she said. Identifying a sweeping consumption trend, “debit cards have overtaken credit cards.”
As the conversation served, retailers are forewarned not to be left behind.
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