Gen Z are either still at school or just recently entering the workforce, so their earning potential has not been fully reached yet. This is the main determinator of their spending habits. Fashion dominates spending for Gen Z, with around 75% of their purchases being in this sector, compared to 65% of millennials.
They have a stronger purchasing power than recent generations.
Having been technology natives since birth, they expect a more streamlined and efficient consumer experience (CX). This is reflected in the graph, in the ‘ease of shopping experience’ and ‘quality of their marketing’ statistics. Like the generation before them, ethical spending is still seen at large also.
How important ‘recommendations from someone they trust’ is surprised me. I think this could also account for the importance of influencer culture and their promotion of certain products. Social media presence also seems to be of great importance.
They Save About a Third of Their Income
“While Gen Z have billions in disposable income, it can be difficult to get them to spend their money as they’re regarded as thrifty consumers. One of the reasons why they’re known as thrifty spenders is because they save about a third of their income on average, according to a Bloomberg report.”
What’s more, about 25% of them already own stocks thanks to a mobile app like Robinhood, while 14% are already busy investing in retirement accounts.
About 45% Plan to Buy a Home Before 2026
In addition to saving a significant chunk, 45% of Gen Zers are considering becoming homeowners before 2026. A survey completed among more than 13,000 US participants revealed that more or less 21% of the Gen Z generation had plans to buy a home before June 2022. So, compared to other adults, Gen Z is more keen to enter the housing market soon.
Gen Z Spend Less Generally
Due to growing up through a recession and watching their parents make drastic financial cuts in the 2008 recession, they are more price sensitive. Only 18% of Gen Z are willing to buy on credit, compared to 30% of Millennials.
(Sun Branding Solutions)