If you were to ask Generation Z the following question – “If you had some extra money to invest, which platform would you use?” – I can assure you that the majority of them would say Robinhood. The stock trading app prides itself on its friendly and approachable interface, coupled with the company’s overall mission to ‘democratize finance for all’. With Gen Zers having been disproportionately affected by job losses during the pandemic it’s no surprise that Robinhood is more popular amongst younger generations than ever before … but what exactly did Robinhood do to win over Gen Z?
They broke down the initial barriers of investing
Investing is an intimidating activity for anyone, no matter their age. For first-time investors, having to wrap their heads around which stock to buy, which broker to use, and how long to hold the investment are all daunting decisions. Couple that with additional brokerage fees and long waits and most Gen Zers will already be getting cold feet.
In comes Robinhood, a stock trading mobile app that wanted to take these daunting decisions, extra fees, and waiting times out of the equation.
Robinhood’s emphasis on mobile trading is no surprise given that Gen Zers are ‘the smartphone generation’. They grew up with them, they use them for anything and everything, and they never have them out of sight. Gen Zers don’t want to deal with intermediaries (knowing fully well that the technology is capable of replacing the intermediaries entirely) and they want the user experience to be as seamless and efficient as possible.
To match these expectations, Robinhood invested heavily in UX design (User Experience design), stripping away the complex jargon normally associated with the stock market and allowing users to buy stocks within minutes of downloading the app. The app’s ease of use is key to Robinhood’s success, especially when considering that over half of its users are first-time investors. Finance-related apps often overlook the importance of successful UX design but Gen Zers are particularly receptive to it, wanting apps to be as straightforward and effortless as possible.
They tapped into gamification
Robinhood has combined gamification and investing like never before. It is worth noting that gamification is not to be confused with video games. Instead, it looks at the integration of interactive mechanisms within an app that leads to boosted engagement. As is the case with Robinhood, one of the most effective gamification mechanisms is friend referrals.
Robinhood tapped into this powerful feature in the early days and has since built out a successful ‘refer a friend, get a free stock’ program, adding a social element to a historically independent activity (investing). Moreover, the company offers users the chance to win a more expensive stock by sharing their experience online, which indirectly turns their users into brand ambassadors.
They became part of the Gen Z discourse
While Robinhood launched back in 2014, it became a household name at the beginning of 2021. Notoriously, Robinhood played a major part in the WallStreetBets uproar that caused a media frenzy. The chat forum, WallStreetBets, a hub of Millenial and Gen Z stock speculators, hosted on the popular forum site, Reddit, initiated a short squeeze (aggressive buying of a particular stock) on GameStop. Young and eager investors flocked to Robinhood as the easiest platform to participate in this short squeeze.
The sheer popularity of mobile apps like Robinhood signal that Gen Zers are increasingly likely to take the risk of day trading for quick returns rather than hold onto long-term, more stable investments. Robinhood has transformed stock investing into a seamless, effortless, and even social experience – and Gen Z can’t get enough of it.
At Zogo, we work with over 90 financial institutions nationwide to help them engage with the younger generations through our gamified financial literacy app. Visit www.zogofinance.com to meet with one of our Gen Z specialists and see how we can help your financial institution tap into the future generations.