The Purchase Power of Gen Z

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April 19, 2021

We’ve commissioned a timely study to glean some insight into the mindset of Gen Z, their lifestyle, spending habits and social concerns within the context of the COVID-19 pandemic. Our research has revealed some key behavioural shifts, particularly when it comes to their interactions with technology, shopping, visual culture, and social expressions. One particularly notable area of shift in behaviours is in online shopping tendencies. There’s one key lesson to be learnt from this: the purchase power of Gen Z should not be dismissed.

 

About Gen Z buying power

Active at a very young age, research shows that of the 10-15-year-old age bracket, 90% of those identifying as male and 67% of those identifying as female are shopping online for themselves. The research similarly reveals a marked uplift of 60% amongst girls aged 16+ taking to online shopping during the COVID-19 lockdowns.

With a buying power of $600 billion worldwide, and online shopping accounting for 40% of all global consumerism, this is an important demographic for organisations and businesses must be ready to cater for this powerful group.

It is worth considering the distinction between those spending on behalf of themselves, and those pestering parents for card details. The statistics for Gen Z spending are likely to be significantly higher when considering the ‘pester power’ effect.

 

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The catalyst for this steep growth is undoubtedly the COVID-19 pandemic. However, it’s also likely to be powered by the AAA effect (Amazon, Alexa, Apps). Spending habits were already moving firmly into the online realms– particularly as voice devices grow in popularity and quite literally make e-commerce child’s play. The pandemic has accelerated this growth.

The ‘Amazon Effect’ is an all too real phenomenon that has sent a powerful wave of disruption throughout the retail marketplace. The neologism entered the modern vernacular because of Amazon’s monopolising of the e-commerce realms. Amongst a plethora of external changes, from an increase in price flexibility to the closure of many brick-and-mortar outlets, is the pre-requisite that shops and brands should offer an online shopping experience. This involves incorporating technological innovations, digital marketing and finding new ways to reach that all-important target demographic.

Recent statistics show that at least 70% of 12–15 year olds in the United Kingdom use at least one form of social media. With Gen Z recording an average increase of 42% in their online spend time, the importance of a social media presence, intelligently targeted content, and an understanding of the youth climate is paramount in tapping into the demographic and realising the purchase power of this generation.

 

If you’re interested in hearing more about our Gen Z research or have a brief that needs to resonate with this audience, get in touch today…