Gen Z, Millennials Turning to Buy Now, Pay Later to Finance Summer Purchases

As consumer behaviors continue to undergo dramatic shifts due to over a year in a pandemic, research data from PayPal is revealing the shift in post-pandemic consumer spending habits specifically among Gen Z and Millennial shoppers — who are gearing up for summer activities.

According to a survey by Atomik Research, commissioned by PayPal of more than 2,000 Gen Z and Millennials in the U.S. in May 2021, 60 percent of young consumers are “excited and happy” to return to in-person gatherings. Moreover, these consumers are making purchases with specific events in mind.

As previously reported by WWD, the trend of “revenge shopping,” or the phenomenon where consumers spend money on items and experiences they have felt deprived of during the pandemic, reached the U.S. as early as this spring. Of PayPal’s survey respondents, 39 percent are making purchases for birthdays, 25 percent are purchasing for travel and 21 percent are making purchases for going on dates.

And as they shop, PayPal’s research revealed Gen Z and Millennial consumers are looking for “nostalgic and comfort-looks.” Notably, The survey found 39 percent of women plan to shop for cropped tops, 32 percent will purchase 1990s nostalgia looks and 25 percent plan to buy 1990s hair accessories.

“Transition wear,” the company said, is also helping consumers emerge from lockdown with 51 percent of women saying they are shopping for casual footwear and 21 percent report they are shopping for athleisure, while 40 percent of men are shopping for casual clothing and 41 percent are looking to buy casual footwear.

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Meanwhile, while these young consumers are ready to shop, they are continuing to pay close attention to finances — making financial awareness trend. According to PayPal’s data, 27 percent of Gen Z and Millennials are reading more news and seeing more social media posts about personal finance, while 24 percent said they have been impacted by friends and peers changing their spending habits.

“The return to gatherings and events is giving consumers more inspiration and reason to shop, while at the same time they are paying close attention to spending and finances,” said Jill Cress, vice president of consumer marketing at PayPal. “Gen Z and Millennials are fast adopting products like Pay in 4 from PayPal to update wardrobes and plan vacations as it provides a flexible payment option that complements their post-pandemic lifestyle and mindset.”

In fact, 41 percent of consumers told the company they delayed purchases during the pandemic and 58 percent said they are experiencing a reduced household income — making the need to manage budgets top of mind as consumers shop for summer activities. Moreover, 60 percent of respondents said they are rethinking what items they need and how they plan to pay for them, with 57 percent saying they feel using buy now, pay later, or BNPL, options is a smarter way to shop.

Maeve Reilly conducted a poll on PayPal’s Instagram to ask consumers to vote on summer items. Courtesy Image.

With 37 percent of Gen Z and Millennials finding BNPL as an appealing way to control their finances, PayPal partnered with celebrity stylist Maeve Reilly to share items she used PayPal’s Pay in 4 to purchase to refresh her summer style. Known for working with Hailey Bieber, Megan Fox and the D’Amelios, Maeve used PayPal’s Instagram stories to launch a poll called “Needs vs. Wants,” featuring items from FarFetch, Target, Nike and NastyGal, which can all be purchased using PayPal’s Pay in 4. The results of the poll will be shared through social media on July 8.

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