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Gen Z Spending Trends and Habits

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Gen Z Spending Trends And Habits

With Gen Z being the latest generation to begin joining the workforce, their increased purchasing power along with their engagement for the newest trends and fashions make them a powerful demographic for marketers.

However, this generation differs significantly from predecessors in their spending habits, showing decreased brand loyalty, and a bigger interest in value versus price.

With research from Afterpay’s 2021 Next Gen Index forecasting that Gen Z will account for an estimated 15% of total spending power within the US alone by 2030, it is important that brands are able to understand Gen Z spending.

So, what exactly sets Gen Z consumers apart from other generational demographics, and how can you engage with Gen Z effectively in your marketing?

An Omnichannel Generation

Compared with every other generation, Gen Z exemplifies omnichannel shopping, being without a distinct preference for where and how they shop. A survey from Vogue and GQ found that Gen Z shoppers were 56% more likely to have purchased clothing in-store within a 3 month period, while also being 38% more likely to have bought online within the same time frame.

Gen Z, therefore, tend to take a holistic view when it comes to their purchasing habits, shopping wherever is most convenient to their needs within the moment, opening up major opportunities for brands and marketers to integrate digital experiences with in-person events in brick-and-mortar stores.

Influencer-Led Decision Making

Across all age groups, Gen Z are the most likely to rely on online influencers for finding and recommending products and services, with data from HubSpot finding 55% of Gen Z cite influencer recommendations as the most important factor in their purchasing decisions, compared with 30% for other age groups.

With nearly half [47%] primarily spending their online time on YouTube, closely followed by Instagram, Snapchat and TikTok, the role of online influencers within these spaces cannot be understated. From a brand perspective, scoping out the influencers within your space, and developing influencer-led campaigns, whether at a macro, micro or nano level is key to engaging Gen Z with your products and building consideration within this demographic.

Value vs Price

Gen Z customers are driven by an interest in high-quality products, but also a desire for accessible pricing. Across all of the major product categories, including fashion, beauty, electronics and health and wellness products, Gen Z are looking to balance quality with price.

As a result, this demographic is far more likely to take advantage of buy-now-pay-later solutions, which are actively driving conversions in Gen Z shoppers. With 123% more Gen Zs using BNPL than any other age group, they display the strongest uptake of any generation.

It is also important to note that Gen Zs are far more willing to wait for products to go on sale or become discounted before purchasing, with 80% citing this spending habit. This feeds into omnichannel capability, with the opportunity to push online discounts, exclusive price points and BNPL solutions to drive Gen Z conversions. eCommerce brands and businesses are perfectly placed to partner with BNPL providers as Gen Z adopt this solution at an ever-growing rate, meeting them where they are in terms of both value and that all-important price-point.

Brand Loyalty

Across all generational demographics, Gen Z display the least brand loyalty, with this being one of the last considerations when making a purchasing decision. Similarly, though Gen Zs are driven to stay fashionable and relevant, branding and logo clothing is not necessarily a persuasive factor in purchasing if the right price point is not there.

Gen Zs are far more likely to invest in clothing rental services or try-before-you-buy shopping experiences to meet the pressures of looking good without breaking the bank.

This rules plays out across all major Gen Z product categories, where brands must be able to justify why their product is a better option and value for money compared with a cheaper alternative. Here, both digital experiences and influencer recommendations come into play, and for marketers, this means fully integrated campaigns that do not simply rely on brand recognition, but place value, quality and price at the forefront.

To Conclude

With Gen Z shaping up to be one of the most influential generations when it comes to driving cultural changes in consumer behaviours and beyond, have you considered your approach to reaching this important demographic? Though budget-conscious, the right focus on omnichannel strategy, peer recommendation and value make Gen Z an ideal audience for brands willing to invest and innovate in customer experience and new ways of targeting.

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