Gen Z – those born between 1997 and 2012 – are already a powerful consumer cohort, and it will become even more so in coming years. Given that, what should retailers know about Gen Z’s preferences, spending habits, values, priorities, how and where they shop, what they purchase, and how they influence the purchasing patterns of other generations?
Answers to those questions are offered up in “Spend Z,” a report from NielsenIQ and World Data Lab that notes that Gen Z’s spending is expected is set to overtake baby boomer spending by 2030, and that by 2034, the younger generation will add more than $9 trillion dollars in spending globally.
“Gen Z is here, they are ready to spend, and companies need to know how to pivot to serve them. Understanding what makes this generation different is key to unlocking the greater than $12 trillion growth opportunity they represent,” said Tracey Massey, COO of NielsenIQ.
Some key takeaways from the report:
- Gen Z demands authenticity: They are more interested in authentic relationships with influencers and brands. “Being true to yourself” is the number one ranked description of success for Gen Z globally. Belonging and self-esteem are two other top values, along with a strong sense of identity that is linked to social causes and activism.
- Unprecedented foot traffic: Their in-store purchases make up almost 50% of their share of dollars and is higher than every other generation before them, even though Gen Z begins their shopping journey online, ranks online reviews from other shoppers as the most important factor when shopping and is heavily influenced by social media.
- Global purchasing power: Gen Z will become the highest consumer spending class in many regions, and 30% of the global workforce in 2030. North America, Europe and APAC will continue to dominate most of the spending with APAC becoming increasingly important. They currently have a more significant share of consumption in regions including Sub-Saharan Africa, Middle East & North Africa, and Latin America/Caribbean, where they make up a more substantial portion of the population.
- Health and wellness matters…to some extent: Overall they are health conscious and sustainability minded. The most dynamic demand growth among the Gen Z consumer class is in the health categories, as well as in alcohol / beverages.
- 81% of TikTok’s U.S. sales are expected to come from health and beauty, showing an outsized impact.
- Over 50% of Gen Z has used a fitness or exercise app, and 17% have used a fitness band to track health and fitness information.
- Technology accelerating behavior:
- Online reviews from other shoppers are paramount when shopping, with 53% of Gen Z population likely to make purchases on social media or live stream platforms.
- 26% of Gen Z use their phones while shopping physically in store to make decisions compared to 23% of Gen Y, 18% for Gen X and 12% for boomers.
“Gen Z is the largest, the richest and the most global generation ever” said Wolfgang Fengler, CEO of World Data Lab. “Businesses need to know that Gen Z is 2 billion people strong, and meeting their needs is a must.”
Click here for more from the NielsenIQ/World Data Lab study.