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Target new consumers by broadening your finance offer

Grocery, fuel and pharmacy retailers can rely on the fact that a broad swathe of consumers will factor a regular spend into their budget, but for the rest of retail, shopping is entirely at the consumer’s discretion and competes with accommodation, entertainment, hospitality and more. We’re sharing some tips on how to reach different consumer demographics by using finance to make your products more accessible.

By Sarah Dunn | November 5, 2019 | Sponsored Content

Most retailers will profile their market when first going into business, but times change and consumer demographics evolve. The broadest trends signal that New Zealand’s population is becoming older and more ethnically diverse, and Kiwis are becoming more urban as Auckland continues to grow. 

Globally, consumer behaviour is changing as new generational cohorts emerge. In the Western world, these tend to be discussed in terms of the following:

GenerationBornRetail preferences
Gen ZMid 1990s – early 2000s.Prefer shopping in physical stores but involve mobile in their path to purchase via social media and other research channels. Gen Z shoppers desire control over their experience and the ability to customise. They and Millennials tend to value experiences over goods.
MillennialsEarly 1980s – mid 1990s.Want brands to cater to their wishes, expecting purchases to reflect their personalities and values. Millennials are omnichannel shoppers who are discount-motivated, comparing and contrasting channels in search of the best deals.
GenerationXEarly 1960s – early 1980s.Sophisticated, educated consumers who are sceptical about marketing tactics and aren’t brand loyal. Gen Xers are conservative shoppers who research heavily before buying.  
Baby BoomersMid 1940s – mid 1960s.Convenience shoppers with a greater amount of disposable income than any other generation, less discount-motivated and more brand loyal than other cohorts. Boomers are comfortable online but prefer bricks and mortar as customer service is very important to them.

Latitude’s Chief Country Officer for New Zealand, David Gelbak, says Buy Now Pay Later (BNPL) products like Genoapay initially appealed to Millennials and Gen Z.

“That younger audience picked up the product first, but now it’s estimated that 30 percent of Australians have a Buy Now Pay Later account,” Gelbak says. 
“It’s growing rapidly in New Zealand as well. What we’re starting to see is, it’s used by different cohorts for different reasons.”

Gen Z and Millennial shoppers might find they need Genoapay to help them afford life’s little luxuries or to smooth payments for necessities under $1500. Gelbak says after Harvey Norman partnered with Genoapay, it saw a rise in younger shoppers’ spending.

“Retailers really like that Genoapay opens up the notions of payment smoothing, affordability to new categories,” Gelbak says. “For instance, a pair of Beats by Dre headphones, that’s not a traditional interest-free finance purchase over 24 months, but if you wanted to do it on Genoapay, you can.”

Gem Visa holders are “very much middle New Zealand”, says Gelbak. He says Latitude underwrites Gen Z shoppers with good credit history, but the bulk of Gem Visa’s cardholders are Millennials, Gen X or Baby Boomers.

These shoppers may use their Gem Visa to help them trade up an existing consumer durable item such as a lounge suite or an engagement ring.

Gelbak says no matter what demographic customers fall into, they tend to return to spend more at the store which initially signed them up with a finance offer. Latitude’s products tend to see repeat use. 

“There’s a raft of purposes but the really important thing is we keep servicing those customers and we keep coming back to help them as their needs evolve over time. Most of the engineering and development work for that is done here in Auckland, with a focus on responsible lending.”

The demographic summaries were compiled with information from Salesfloor, the NRF and Forbes.

This story was created with the support of Gem powered by Latitude.

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