Gen Z and In-app Purchases

gen z woman using her phone to make an in-app purchase

Gen Z is the most technologically savvy generation yet—but do they put their money where their virtual mouth is? 

Who is the “iPhone Generation?”

Gen Z, Zoomers, or the “iPhone generation,” are popular media’s newest generation and demographic. Gen Z has received a lot of hate from older generations, just as every new generation does from their predecessors. Although debates continue over the year the Millennial generation ends and Gen Z begins—spawning the nickname Zillennial for those born on the cusp between the two—the consensus is that Gen Z started in the late 1990s. While Millennials are criticized for their inability to purchase homes due to their apparent avocado toast addiction, Gen Z is receiving criticism for being “self-centered” and “unable to compromise.” 

As Gen Z grew, technology grew with them. The first iPhone came out in 2007, just as Gen Z reached their childhood and pre-teen years. Gen Z grew up in an era of vast technological advancements, the rise of social media, and the creation of social media influencers. Older Zoomers may remember pre-iPhone technological toys like LeapFrog and GameBoy. They might even remember the traumatic sound of dial-up. But, in the long run, information and deliveries have almost always been at the touch of their fingertips.

What are In-app Purchases?

As technology has advanced, so has ecommerce, including options such as Bitcoin, NFTs, and simple but constant in-app purchases. An in-app purchase is made within an online application on a mobile or tablet device. But many tools and applications require a purchase to get the fullest extent of use, like Spotify Premium. Despite this additional purchase Spotify Premium gained users, increasing from 158 million users worldwide to 182 million in the same period from 2021 to 2022. As a result, mobile app revenue has risen steadily, climbing to 29.3 billion dollars worldwide in 2020. The popularity of in-app purchases has established the growth and accessibility of food delivery apps such as Grubhub and an obsession with games like Candy Crush that offer in-app purchases for specific tools and levels. But we’ve all heard horror stories about children spending hundreds of dollars worth in games by accident on their parents’ phones—not to mention data leaks that could affect your bank accounts if stored on mobile apps. So does Gen Z, the “iPhone generation,” continue to make in-app purchases despite these hesitations? 

How did the pandemic affect in-app purchases?

Appalachian State University professors Thomas Mueller and Greg Perreault conducted a study on Gen Z’s mobile app use. This study found that “based on data collected in the third quarter of 2020, Gen Z invests over 4.1 hours each month in mobile apps, which is 10 percent longer in duration than older generations.” In addition, based on the time spent online, Gen Z is more likely to make in-app purchases. 

Physical purchases delivered right to their door aren’t the only things available to Gen Z now: even intangible items like Bitcoin, NFTs, and upgrades in games can be bought directly from your phone, wherever you are. Ecommerce has exploded in popularity in the past 10-15 years with credit cards, debit cards, and money-exchange apps like Venmo, making it possible to buy pretty much anything from the internet. Fast-food deliveries with no contact, clothing, technology, makeup, if you can Google it, you can buy it. Apps like Tiktok have also influenced in-app purchases—you can purchase in-app everything your favorite influencer likes directly from their account bio. Especially as people spend more and more time at home, wishing less and less to go out in public and risk exposure to COVID-19, data/app usage and streaming have soared. In-app purchases rose by 22% in the first two weeks of the pandemic in March 2020. At the very beginning of the pandemic, when there was a run on things like toilet paper and certain food items, online and in-app purchases made it easy to check what was in stock and place orders for delivery without leaving the safety of your home. Although there are flaws to in-app ordering (missing items, missing orders), the accessible nature of in-app, no-contact purchases during a pandemic can’t be ignored. However, the pandemic isn’t the only reason Gen Z uses in-app purchases. 

Are In-app purchases accessible?

In the same survey, Mueller and Perreault concluded that Gen Z is most concerned with usability and accessibility. As online options become more accessible and user-friendly, Gen Z’s use increases too. As the more technologically savvy recent generations, Gen Z navigates online purchases faster and in multiple forms. Delivery apps like Grubhub and sites that offer shipping in a day or less like Amazon have only added to Gen Z’s online purchasing power. In-app purchases especially allow users to order whatever they want directly from their phone—whether in their bed or the bathroom. 

Gen Z is also particularly aware of diversity, equity, and inclusion, or DEI. With almost every new generation, the belief that disability equality should be included in diversity increased: 39% of boomers, 48% of Gen X, 45% of millennials, and a majority of Gen Z, 54%,  believed D&I should include disability equality. With COVID-19, virtual options have become necessary for able-bodied people. Yet what of those with disabilities? Now that these options are available, disabled people can join and live more accessibly than ever before. The ability to order in-app food deliveries and other necessities vastly improves the lives of disabled people, which society has yet to create accessible spaces for. Gen Z and accessibility have begun to go hand-in-hand. 

Will Gen Z continue to use in-app purchases?

Gen Z is the “iPhone generation” and, by association, the in-app purchase generation. They have the access, motivation, and skill to quickly and easily use in-app purchases in all areas of their lives. Even if the pandemic ends, in-app purchases will only continue to grow as technology and ecommerce advance.

Use in-app purchases to increase mobile app use

Want to increase in-app purchases? Let the digital ads team at Online Optimism help your company get the most out of in-app purchases. Contact us today to see how we can increase your mobile app revenue.