By anyone’s measure, 2021 was far from a normal year. Extended lockdowns across Australia restricted regular activities such as grocery shopping, going to the football or ducking out for a lunchtime manicure, but young Australians quickly adapted.
Transactional data collected by Fonto from more than 40,000 Australians between January and December 2021 reveals the changing spending habits of Australians, with 18-29 year olds doubling down on convenience and embracing digital entertainment. On average, young Australians spent more money than the rest of the adult population on home delivered food and gaming as well as beauty products and audio streaming.
Whilst at home, screen-based activities became the norm with gaming, esports (pay to play and pay to watch), multi-player video games, online board games and puzzles all in demand. Young Australians spent a whopping 118% more than the rest of the population in 2021 on gaming alone.
With travel limited, holiday plans cancelled and music festivals on hold, when they were able to go out, young Australians opted for rideshare services (49% higher spend than over 30s). Car ownership is lower among the under 30s but they are no less mobile – thanks to the combination of rideshare and car sharing services, young Australians have plenty of transport options. While out and about, they were also keen to get back to the gym (19% higher spend).
Beauty products were another popular purchase after covid restrictions closed hair and beauty salons for months at a time. Young Australians spent 31% more on hair care, make-up, and other beauty products to support home-based beauty regimes. This may be partly attributed to an increase in Zoom calls and TikTok videos but was more likely to satisfy comfort and self-care needs during a difficult time.
In the financial services categories, Buy Now Pay Later (BNPL) services spending was up by 21%. While some young Australians accessed BNPL for pure convenience, others impacted by reduced earnings turned to deferred payment solutions to help make ends meet. In addition to spending more on deferred payments in 2021, young Australians used the service, on average, more than once a week. The high take-up and year on year growth in deferred payments may indicate elevated financial stress as young Australians seek to maintain their lifestyles.
Regardless of disruptions caused by covid restrictions, Australians of all ages still had to tend to the basics. Grocery remained the highest spending category across the board with 18-29 year olds on average forking out $3,112 each at the supermarket. Groceries are also the most frequent transaction, with young Australians shopping for household staples 91 times a year, or almost twice a week – but not necessarily for home cooking.
In 2021, young Australians spent an average of $1,829 each to have quick service restaurant meals delivered to their door, an increase of 15% on 2020. And they’re spending significantly more (+42%) than the rest of the population for the double convenience of home delivered fast food. No cooking, no washing up, no need to leave the couch.
By mastering the art of convenience, young Australians freed up time to explore the world of cryptocurrency and expanded their engagement with gambling, with surprising new behaviours revealed. Both of these topics will be unpacked in the next chapter of our Young Australians series.
Over the coming weeks, Fonto will dig into the daily transactional data to uncover deeper insights into how, when and where young Australians are spending their hard earned cash. What will be interesting to track is whether this trend towards hyper convenience reflects a wildcard year driven by lockdowns - or are Young Australians committing to new spending habits?
