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Research on Segmentation and Demand Differences of Generation Z Digital Financial Management Users Based on K-means Clustering

Author(s)

Yichen Lu, Guiling Zheng*, Zhixian He

Affiliation(s)

Southeast University Cheng Xian College, Nanjing, Jiangsu, China *Corresponding Author

Abstract

The most prominent emerging generation in the market of digital wealth management is Generation Z with their specific tendencies in terms of financial activities, namely, early involvement age, social orientation and simplicity. However, the current wealth management system is highly homogenized, so there is an urgent need to segment users and understand their needs more deeply. This study targeted Generation Z and collected 1,002 valid questionnaires. This study has been able to determine six major clustering variables by incorporating the AIO/VALS theoretical framework and the K-means clustering algorithm to categorize the four types of users of the Generation Z namely rational-practical type, conservative-stable type, technology-dependent type and social-experience-oriented type as well as obtain a silhouette coefficient of 0.72 which shows that the cluster analysis was effective. According to the given analysis, it is suggested that the product comparison tools should be improved in case of the rational-practical group, incentive mechanisms; in the conservative-stable group, the emphasis is on the security and low-risk product development; in the technology-based group, the system of smart recommendations should be optimized, as well as the transaction costs reduced; in the social-experience-based group, it is necessary to design the community interaction features and a good user experience. These findings can provide data-driven empirical evidence and recommendations for online wealth management services, helping them implement tiered and precise operational strategies to fully leverage the advantages of product characteristics and marketing strategies.

Keywords

Generation Z; K-means Clustering; User Segmentation; Digital Finance; AIO/VALS Theory

References

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