42 Statistics on the spending habits of Generation Z in 2023 (2024)

All retail brands must pay attention to the spending habits of Gen S this year. The oldest of Generation Z – born between 1997 – 2012 – are all adults. Now that they have completed their degrees and entered the workforce, we are beginning to see the shape of their views and desires. Like all generations before them, they will one day transform American society, so it is important that we pay attention to their priorities. The purchasing power of Generation Z will shape retail over the next decade.

Although Generation Z is still young, their purchasing power is significant. Their current purchasing power is worth hundreds of billions of dollars, and as they age, that number will only increase. Additionally, the younger Gen Z has some influence on the older generations as their Boomer, Gen X and Millennial family members purchase gifts or even necessities. Gen Z is an important demographic that companies, especially those in e-commerce, need to be aware of. However, Generation Z is still young. While paying attention to Gen Z, companies still need to maintain a relationship with older generations. Diversification is key; both Generation Z and older generations prefer different shopping methods.

So what'sThe purchasing power of generation Z, and how do they make their purchasing decisions? Let's look at some statistics.

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Understand the importance of Gen Z in the consumer market

Currently,Gen Z contributes about 5% of US spending. However, this number is expected to grow to 17% by 2030. Gen Z will soon enter their peak earning years, making them an important market.

Although Gen Z only accounts for a small percentage of spending, they tend to spend their money in key areas. This generation buys more goods on social media than any other generation, and they are more likely to research products online before making a purchasing decision.

However, some statistics show surprising habits that go against common Generation Z stereotypes, especially when it comes to brick-and-mortar businesses. Let's look at the statistics surrounding itThe spending habits of Generation Z.

Generation Z uses social media to make purchases

It is perhaps not surprising that social media is not only a form of entertainment for Generation Z, but also a tool. Statistics show that the younger generation is more likely to interact with the brands they like online, use YouTube to research a product, and even make purchases through social media and live events.

1. Twenty-nine percent of Generation Z respondents said they would be more likely to purchase from a brand with a social media presence (aap survey)
2. the hashtag #tiktokmademebuyit has over 6.7 billion views, indicating a new oneGeneration Z shopping habitson social media, especially TikTok. (Forbes)
3. A whopping 97% of Gen Z customers claim they draw inspiration from social media. This suggests that collaboration with influencers and content creators is very important. (Influencer-marketingfabriek)
4. Among Gen Z adults, 74% choose to shop on mobile. Your favorite sources? YouTube comes out on top, with 47% of Gen Z researching their products here before making a purchase decision, followed by Instagram, SnapChat and TikTok. (Hubspot)
5. Companies looking to tap into this market should be aware that Gen Z cares about their privacy. About a third are concerned about online security measures and 38% are concerned about brands sharing their data. (SheerID)

Gen Z prefers to communicate online via smartphone

According to several reports, Gen Z likes to reach brands via the internet.Like Millennials, they eschew phone calls in favor of social media chats or email. To reach this audience, companies must make their online customer service options easily accessible and mobile-friendly.

6. A 2022 study found that 57% of Generation Z prefer to be contacted by brands via email. Social media is the second preferred method at 44%. (statesman)
7. A large number of Gen Z consumers shop on their mobile phone up to four times a week: 68%. (VentureBeat)

Generation Z still shops in physical form

Despite their increased preference for shopping on social media, a large portion of Generation Z still enjoy physical shopping, especially when they get to try something on or see it in person.

8. Generation Z is moving away from e-commerce sites like Amazon. Only 37% indicate that they are dependent on these types of online stores, while 67% of older generations still frequently use such devices. (CGS)
9. A large majority of Gen Z (81%) still prefer to shop in-store, and 73% enjoy discovering new products in-store. The survey found that Generation Z enjoyed the retail therapy that brick-and-mortar stores offered, allowing them to disconnect from their phones. (CBS)

How much purchasing power does Generation Z have?

While Gen As more people from Generation Z enter the workforce year after year, this number will only increase.

The purchasing power of generation Zis on the rise

The older Gen Z gets, the greater their purchasing power. Perhaps due to the fact that they have experienced several recessions in their young lives, they tend to embrace concert culture and engage in side activities. As a result, their purchasing power is growing rapidly.

10. Business Insider estimates that Generation Z has approximately $360 billion in disposable income. This could be due to the fact that Gen Z's spending habits show that it's all about the hustle culture, with many of them having side gigs in addition to their full-time jobs. (Influencer-marketing)
11. As more Gen Zers reach adulthood, they will make up a larger percentage of the workforce. It is estimated that by 2030, 30% of the workforce will be Generation Z.Zenefits)
12. Not only adults have purchasing power. It is estimated that Gen Z teens have an average of $115 in monthly cash. This is in addition to the influence they have on their parents when making purchasing decisions for their Gen Z children. (YPulse)
13. About half of Generation Z (46%) do gig work in addition to their full-time job. (The Labor Institute)
14. Generation Z doesn't just have purchasing power. They also influence spending. Generation Z's influence on their parents has made Generation X more willing to pay more for sustainable products (42% more), and their preference for sustainable brands has also increased by 24%. (Influence of Gen Z eBook)

How much purchasing power do millennials and generation Z have?

Although Millennials and Gen Z have similarities, they are still two very different groups. A key factor here is that most millennials remember a time before the digital age. Many of them grew up with encyclopedias and switched to Google in their teens. Conversely, Gen Z has only known a world where the internet ruled everything. You can see this contrast in the way they consume media. While manyMillennials still value text-based platformsLike blogs and digital articles, most Gen Zers prefer video.

That said, the combined purchasing power of millennials and Gen Z will lead the way over the next decade. Companies would therefore be wise to shift the focus to these younger generations in the coming years.

The purchasing power of millennials and generation Z: The statistics

15. 61 percent of Generation Z and 53% of Millennials follow the brands they like on social media. (aap survey)
16. In 2021, the combined purchasing power of millennials and Gen Z was approximately 30% of all spending. (The economist)
17. Millennials and Gen Z eschew credit cards compared to Gen X, and they (especially Gen Z) embrace Buy Now, Pay Later models instead of credit cards to make their purchases. (Rethink retail)

What is the spending behavior of Generation Z?

Gen Z is known for making socially conscious purchases, thrifting and being very well informed. This is probably due to the large amount of information available to them since birth, and the fact that many of them experienced a recession in their younger years. While older generations believed that they would have ample opportunity to accumulate wealth, most Gen Zers grew up knowing that the economy will not always be in their favor. Therefore, they are much more careful with their money and spend much more time researching their purchases.

Generation Z is the most frugal generation

While Millennials were born into an economic boom, Generation Z entered the world in a recession and saw their parents and older siblings struggle financially. Experts believe this is why Generation Z is more frugal than older generations. Like those who grew up during the Depression, they are more likely to look for a bargain or shop secondhand.

18. Generation Z saves an average of a third of their income. (Influencer-marketing)
19. As many as 80% of Generation Z said they would be more likely to shop secondhand. (Influencer-marketing) This may be due to their thriftiness or their environmentally conscious mentality.
20. 48 percent of Gen Z participants in a 2023 survey said they shop primarily at discount stores.Generation Z luxury spendingis quite low: only 9% say they shop at luxury retailers. (ICSC)

They are willing to pay more for sustainable products

Gen Z attaches great importance to sustainability. Although we have known about the danger of climate change since the 1970s, its catastrophic consequences are yet to come in their lifetimes. Despite their frugality, they are willing to pay more for environmentally friendly products and take things like packaging into account when making purchasing decisions. They may even be more inclined to spend a little extra on itsustainable car. To tap into the purchasing power of Generation Z, companies must do what they can to improve their sustainability goals.

21. Packaging is important to Gen Z. A Kearney survey found that 65% of Gen Z respondents wanted simple packaging and 58% preferred eco-friendly packaging. (Kearney)
22. According to a 2019 survey, 57 percent of Generation Z wanted locally produced and/or environmentally sustainable products.Kearney)
23. According to a 2020 survey, 75% of Gen Z respondents stated that sustainability was important to them when making purchasing decisions. (IBM)
24. Sustainability trumps frugality, as 64% of Gen Z participants said they would pay more for sustainable products. (Deloitte)
25. It's not just Gen Z who wants to shop sustainably. Consumers of all generations are willing to spend more for a sustainable product, compared to just 58% of consumers a few years ago. In fact, an astonishing 90% of Generation X consumers said they would be willing to spend up to 10% more for a sustainable product. Two years ago this was only 34%. It is clear that sustainability is a major concern for everyone. (Influence of Gen Z eBook)

They find authenticity important

As the first generation to know nothing but the digital age, Gen Z knows how to do research. They are smart and can see through devious marketing tactics. They prefer companies that are authentic, transparent and sincere.

26. A 2021 survey found that 32% of Gen Z cite authenticity as a driving factor in their purchasing decisions. (aap survey)
27. 82 percent of Gen Z survey participants said they trust a company more if their ads show actual customers. (BusinessWire)

Social media is a driving factor in purchasing decisions

Because they are attached to their phones (a large number of Gen Zers openly admit to being addicted to their smartphones), social media has a major impact on their purchasing decisions. While they are receptive to ads they see on social media, they prefer when someone they follow recommends a product or when a brand produces content they like. Because they make a lot of online purchases, they prefer simple checkout processes, fast delivery times and a hassle-free user experience.

28. As of 2020, Gen Z spent more than eight hours a day online. This number is almost certainly higher today, because research at the time showed that this number would only increase. (Global web index)
29. A purchase driver for 28% of Generation Z is a simple online shopping experience. (Global web index)
30. A large number of Gen Z consumers are adventurous when it comes to new online shopping technology. Forty percent of participants in a 2021 survey said they would try livestream shopping, and 24% said they would try on clothes using augmented reality. (CGS)
31. A 2023 study found that 45% of Gen Z consumers who made a purchase via social media did so because they saw a product they liked. Twenty-four percent made one because the platform made it easy. (Insider intelligence)
32. About 55% of Gen Z consumers have made a purchase after seeing a brand on TikTok. (AdWeek)
33. Reviews are important. About 68% of Gen Z consumers read or view at least three reviews before making a purchase. (Influencer-marketingfabriek)
34. YouTube is the go-to source for product research for 47% of Gen Z consumers. (aap survey)
35. Instagram is used by 60% of Gen Z consumers to discover new products and services. (Blanco)
36. 48 percent of both Generation Z and younger millennials have made a purchase via social media. (statesman)
37. The majority (83%) of those who browse TikTok say popular products prompted them to make a purchase. (Influence Marketing Factory)

Top spending categories for Gen Z

Generation Z's spending habits show that they care most about fashion, makeup and beauty products, technology and their pets. This may be due to their young age and few large bills.Generation Z prefers 'buy now, pay later' options over credit cardslimit their interest rates, and a large number of 18 to 25 year olds (about a third) still live at home. Additionally, some research suggests that Gen Z is making more personal purchases due to the influence of social media. Let's check the numbers.

What does Gen Z spend their money on?

38. A 2022 study found that Generation Z spends an average of $1,885 on their pets annually. That's more than any other generation surveyed. (AAHA)
39. Another 2022 study found that Generation Z spends about $157.07 on entertainment every month. This mainly concerns streaming services, music and games. (zelf.inc)
40. Social media drives 49% of Gen Z consumers to buy more clothes. Similar figures were found when it came to purchasing beauty products (34%) and technology (31%). (aap survey)
41. Among Gen Z female consumers, 40% shopped for clothes twice a month. (statesman)
42. While most Gen Z consumers still prefer to shop in-person, another survey found that 51.5% of Gen Z say they mainly shop online when purchasing clothes and gadgets. (zelf.inc) This emphasizes the importance of diversifying where your products can be found.

Take away food

Although stereotypes view Gen Z as more consumeristic than older generations, they appear to be careful with their money. However, this does not mean that they do not make purchases. They simply do their research beforehand.

Companies looking to reach this demographic should focus on the following thingsThe purchasing power of generation Z:

• Grow their social media presence, primarily through video or influencer partnerships.
• Improve their CSR, especially when it comes to sustainability. (You can check some of themtips for sustainabilityher.)
• Make sure their websites are mobile-friendly and that they have a solid customer service messaging system.
• Make an offer. Gen Z is frugal and loves a good sale.

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