Gen Z’s potential as consumers is a factor that brand retailers should not overlook. With a buying power exceeding $500 billion, Gen Z teens and young adults have at their disposal a spending ability that is comparable to the GDP of many countries, including Belgium, Poland, Sweden, Thailand, and Venezuela, according to a new report from market research firm Packaged Facts.
The report, Looking Ahead to Gen Z: Demographic Patterns and Spending Trends, provides a comprehensive look at Generation Z, which comprises 52 million Americans and represents 16 percent of the U.S. population. Between the money they have and the money their parents spend on them, Gen Z is already having a significant impact on the American economy.
While they grew up with modern technology, many Gen Z consumers employ a more “old-fashioned” approach to shopping
The 31 million 18- to 24-year-olds in the vanguard of Gen Z and the 21 million 13- to 17-year-olds growing up behind them are making a profound impact on the American consumer economy. Gen Z young adults generate an aggregate income of $463 billion, while older teens (15- to 17-year-olds) have an aggregate income of $17 billion and have parents who spend $25 billion on their clothing and categories such as entertainment and personal care items.
Gen Z digital natives continue to seek out consumer experiences in the brick-and-mortar world: 67 percent of them prefer to make a purchase in a store as opposed to shopping online, or to shop using an app, the report found. Brick-and-mortar clothing retailers may want to consider targeting them as significant consumers as Gen Z seems to also favor shopping for clothes and shoes. Gen Z young men spend 53 percent more money on apparel than their Millennial counterparts. Generation Z also enjoys experiencing entertainment outside of the home more than their Millennial counterparts, with many Gen Z young people regularly attending movies and concerts or other live performances, perhaps because they are much less likely to have children.
Another defining characteristic of Gen Z is their unprecedented comfort with the idea of gender fluidity and their broad view of sexuality
As a result, marketers have begun to respond to Gen Z consumers by launching gender-neutral marketing campaigns and rolling out gender-neutral products that have traditionally been geared exclusively toward either males or females.
“Gen Z is anything but monolithic or expected,” said David Sprinkle, research director for Packaged Facts, in a news release. “A common thread between the diverse array of Gen Z kids seems to be their tendency to weave social media, and digital experiences into their physical, everyday lives. For a brand to be big with Gen Z, having brick-and-mortar store locations and a strong online presence are both essential to generating business and buzz.”