Attracting gen-Z with buy now, pay later
Gen-Z sit at the intersection of technology, affordability, flexibility, and travel. This positions them as a generation uniquely suited to buy now, pay later (BNPL) payment options.
BNPL is a rapidly growing area of the industry, with partnerships fuelling uptake. According to GlobalData’s study, the BNPL market size was valued at $141.6 billion in 2021 and is predicted to grow at a compound annual growth rate (CAGR) of 33.3% from 2021-2026. For more details on BNPL in the aviation industry read ‘Flexibility is here to stay’ and ‘Buy now, pay later flights?’
BNPL offers a level of flexibility that has demonstrated significant appeal during the current economic condition. In the UK over one third of consumers currently use BNPL, a figure that has been attributed to the recent cost of living crisis. However, there is one generation that utilises these payment options more than the rest.
BNPL appears to be primarily attractive to gen-Z (closely followed by millennials). In the United States, 55.1 per-cent of gen-Z digital buyers use a BNPL service at least once a year, this drops to 48.6 per-cent for millennials, and older generations are significantly lower.
For an industry investing in BNPL fintech and simultaneously trying to appeal to gen-Z, this is important.
How to adapt the aviation industry to appeal to gen-Z has been a huge topic, not least because the generation comes with significant proverbial baggage. Characterised by strong views on the climate, a need for instant gratification, flexibility, and heightened digital expectations, the generation has had industry leaders scratching their heads.
However, one of the solutions could be BNPL.
Gen-Z has been demanding cheap travel. Significantly financially impacted by the pandemic but still keen to fly, this generation is price sensitive and leans towards flexibility when it comes to booking. Moreover, the adoption of BNPL options can help to steer younger travellers’ impressions away from that of some airlines as an unaffordable premium service. Through BNPL, airlines can appeal to gen-Z and even work towards establishing loyalty.
Article by Jess Brownlow