In every strategy meeting of nearly every business it’s likely that one question has been posed at nauseum: “How do we target millennials?” Successfully infiltrating the generation and manipulating their consumer behaviors has become the key focus of many industries. However, if the strategy is fixated only on millennials, the target may be misplaced.
The goal of this question is to determine how to appeal to younger consumers, rather than the existing customer base. With the average age of credit union members creeping into the high 40s, it is necessary to set sights on the next generation. But there is one key detail that many credit unions have failed to grasp – how old millennials really are.
While there are many variations of the classification of the generation, the most widely accepted definition of millennials encompasses those reaching young adulthood around the year 2000. This means most of the generation has aged into the mid-30s today. By this stage, most adults have already begun establishing credit and making major purchases such as homes and cars. They have opened checking and savings accounts and set up direct deposit. They are adults who are on their way toward establishing families of their own.
For credit unions looking to target the younger generations for first-time buyer promotions or credit building initiatives, Generation Z may be the more appropriate target.
Gen Z consists of people born in 1995 or later. They make up more than a quarter of the US population and contribute around $44 billion to the American economy. These are the people who have grown up with mobile devices and the internet. They are multitaskers with short attention spans because they have always enjoyed ready access to all the information in the world. And because of that access, they are considered the first “global” generation, identifying more closely with their global peers than with adults in their own country.
The oldest of Gen Z are in their early 20s, meaning they are just beginning to forge their way through understanding finances and credit. Teens in this segment have shown conservative spending habits with more attention to saving that millennials did at the same age. While millennials may be on their second or third car, Gen Z is beginning to make these purchases for the first time.
While members of both cohorts may look young, it’s important to know and understand the differences in consumer behavior between millennials and Gen Z. Both are key demographics to target when considering future members of the credit union – however, the two generations are decidedly different in how they interact with brands and view money.