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How Gen Z and younger millennials are driving shifts in the way consumers earn and spend

by | Jan 13, 2023 | Public Relations

New research from market intelligence and advisory services firm IDC reveals some dramatic shifts occurring in how different generational cohorts earn income, spend their money, and leverage technology to do both—and how stark differences between Gen Z/younger Millennials and older consumers promise to transform the tech landscape over the next decade.

The firm’s latest Consumer Pulse survey of consumers in seven countries finds that a staggering 48 percent of all households surveyed reported engaging in at least one source of tech-enabled income generation in 2022, led by content creation, peer-to-peer commerce, and rideshare driving. This trend is driven by Gen Z- and Millennial-led households, where 60 percent of respondents said they derived such income in the last year.

“It may be surprising that nearly half of households report online income-generating activities,” said David Myhrer, research vice president, Consumer Strategies at IDC, in a news release. “It’s important to remember that this includes selling things on eBay or Facebook Marketplace, picking up the occasional shift on Lyft or Uber, and posting content on sites such as YouTube. There is now a diverse set of opportunities for consumers to generate new sources of income, and they’re embracing them.”

All told, combined worldwide spending on independently created content, items purchased via peer-to-peer commerce, and ridesharing services will grow to a total of $294 billion by 2026, according to IDC’s Consumer Market Model (CMM), which forecasts strong and continued growth of spending on consumer-derived content, goods, and services. For example, the CMM forecasts that by 2026 consumers will add $15 billion worldwide in new spending in support of their fellow consumers’ independent content creation. Peer-to-peer marketplaces will also see strong growth, accelerating from $33 billion to $117 billion from 2021 to 2026. Finally, rideshare driving will drive $85 billion in new spending worldwide between now and 2026.

“Gen Z and younger Millennials will dominate future spending in a wide range of CMM categories,” said Kelly Brown, senior research analyst for IDC’s Consumer Market Model, in the release. “These groups are not following the same playbook as their predecessors, and they are actively seeking new alternatives to both earning and spending income.”

How consumers spend that extra income is rapidly changing, too

The Consumer Pulse shows that online transactions (50 percent) overtook in-person purchases (43 percent) in 2022, inverting the pre-COVID mix. There are some interesting shifts occurring inside that stat, too.

“When it comes to online grocery shopping, we see a growth in the share of home delivery from 25 percent to 35 percent,” Myhrer says. “What’s most interesting is that the growth is driven by Gen Z, Younger Millennials, and in this instance—surprise—Boomers.”

How Gen Z and younger millennials are driving shifts in the way consumers earn and spend

Related to the shift toward online shopping, the CMM projects that 64 percent of online transactions will be conducted on mobile devices by 2026. An “online first” mentality is present among three fourths of Millennials and has already spread to two thirds of Gen X, Myhrer says. “This is just one example of how the habits of these younger consumers are driving seismic change.”

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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