As more Gen Z’s become financially independent, we take a look at how Australian students budget their spending, as well as what they buy and where you, as a brand, fit in.
With a new raft of Gen Zs headed to university this year, more young people are starting to get to grips with budgeting their finances. Now, more than ever, the student market is a valuable one to engage with, and understanding how a student’s financial position shapes their spending is key to building a successful Gen Z marketing strategy.
Student income: the facts and the figures
Welcome Week, also known as Orientation Week or O-Week, will be kicking off at most universities from this week. The majority of domestic and international students start receiving their student income ahead of Welcome Week, and International students also have the option to pay their tuition fees well in advance, meaning all or most students will have a clear idea of their budget by the time Welcome Week rolls around.
The Higher Education Loan Program (HELP) is repayable to the government based on income and is the most common source of income for all students. This loan pays for tuition, however, living costs are usually privately financed for domestic students, many of which choose to live at home during university to save money.
Of Australia’s 1.5 million-strong student demographic, 33% of students receive student income support, and 62% of students receive support from their family or partner. A massive 80% of students are also in paid work, which means they are likely to have a substantial amount of disposable income to spend on non-essential items across the academic year – good news for brands.
Gen Z’s budgeting behaviour
43% of young people are concerned about their long-term financial future. When it comes to budgeting, this financially sensible group are therefore unlikely to blow the budget – 65% of young Australians actively budget money so they know how much they can spend over the week or month. Yet Gen Zs don’t have too much confidence in their own budgeting abilities, with just 31% describing themselves as financially resilient, according to McCrindle. When marketing to students, brands need to make young people feel confident in what they’re buying to build up brand loyalty and reduce basket abandonment.
Unlike other demographics, students are less likely to receive their income in one lump sum. With wages, income support and family allowances balancing out their budget, students have multiple “paydays”. This means they are likely to have some level of disposable income across the days, weeks and months of the year.
Gearing your marketing towards the typical end-of-month payday could mean you miss key opportunities to connect with your student following. Get to know the key events in a student’s calendar to understand when they will be keen to spend and what they will be buying – and strike while the iron is hot.
What are students buying?
Australia is one of the most culturally diverse nations in the world. 29% of Australians were born overseas and a huge proportion of Australian students are international students. This means that young people are constantly getting introduced to new brands, and are very international in their brand preferences as a result.
The uptake of disruptive tech has been particularly strong in recent years – with Chinese smartphone brands such as Huawei and OnePlus making an impression among young Australians in particular. Brands should definitely hit up international shopping events like Singles Day to really maximise their student marketing reach and tap into their preferences.
Australian students are equally loyal to Australian brands and the pandemic has in many ways impacted where students want to spend their budget. With so many small businesses suffering due to Covid, 70% of students said they intend to support smaller, local businesses this Welcome Week, to help boost their revenue during a difficult time. 60% of young people also plan to buy more products and services from big businesses that took care of their workforces and positively affected society during the pandemic. Any brands looking to target Gen Z will go a long way with this demographic if their values align with this diverse and culturally aware generation.
During the academic year, domestic and international students spend around $347 on groceries, and $42-$84 on books and study supplies. Key differences between domestic and international students’ finances are on things like rent, bills, and the internet. Domestic students that opt to live at home during their studies are likely to spend much less than those students living out or those coming to study from overseas. Nevertheless, whether they are creating an at-home study space or furnishing a new flat, students will be looking to spend on sectors such as homewares and tech regardless. Brands should extend their marketing reach to fit these differing circumstances among students.
Sport is also rated highly among Australia’s student demographic, and after months of lockdown restrictions, we expect fitness and nutrition brands to be very much on Gen Zs radar this academic year. However, with life looking a bit more normal, all brand sectors have an opportunity to be a part of students’ budget this year, especially food, entertainment and travel, which were all hit hard by Covid restrictions.
Opportunities for brands
As digital natives, Gen Z responds well to digital marketing, so creating a social media strategy to target Gen Z will be pivotal in boosting your student conversion rates and revenue for the young demographic. While Facebook makes it into the top three, visual platforms like YouTube and Snapchat are by far the most popular among Gen Z – 91% of young people use YouTube regularly, and Snapchat now has 6.3 million active daily users in Australia. Brands should consider building up their social media strategy with sponsored ads, relatable content, and real-life customer reviews to gain a solid following and generate repeat purchases.
Brands should also reach out to students on campus, particularly during sporting fixtures and events like Welcome Week, where the buzz on campus is likely to be high. Of course, the start of the university timetable will look different this year depending on which state students are in. When it is safe to do so, brands should definitely head over to uni campuses and promote themselves with posters, freebies, sign-up sheets and more. Gen Z value in-person interaction, so you are more likely to gain their trust and attention by representing yourselves in person and sparking conversations in real-time.
Find out more about how Student Beans can help you build a targeted Gen Z campaign by getting in touch today.