How Gen. Z and Millennials Look to Create Change with Their Wallets
It’s a popular trope in media to mock Millennials and Gen. Z as unmotivated or disconnected. Nothing could be farther from the truth. Through entrepreneurship, creative scheduling, and the gig economy, these young people have come to represent a significant portion of the greater US economy.
“Generation Z (sic) and Millennials have different shopping habits, and motivations for buying that continue to affect the post-pandemic retail industry,” says Phil Friedman, President and CEO of an international commerce provider. With a collective buying power of nearly two trillion dollars, they leverage their purchasing power for social and economic change. So, who are they, and what do they want from you?
New Consumers – New Demands
Gen Z, at ages 6 to 24, is the most recent generation of consumers. With less than half of their numbers old enough to hold a job, they still command a buying power of $323 billion. Millennials, ages 25-40, have and spend over $1.4 trillion.
In a massive departure from their parents and grandparents, Millennials and Gen Z are snubbing Amazon and other online marketplaces in favor of local, environmentally friendly, and more socially conscious options. Only 18% say they are concerned with price in making purchases, 27% buy solely on perceived quality, and 82% are planning or have already engaged in “revenge shopping.” This is a new trend defined by a willingness to buy expensive luxury items as a reward for surviving the pandemic and its social privations.
Shopping Small is Big Business
Overwhelmingly, Millennials and Gen Z prefer to shop with small businesses. Last year 58% of all US customers said that they prefer the customization and personalization offered them by the small business experience, and Millennials and Gen Z even more so. Customer service was also a top reason to shop locally.
Small businesses are already well-adapted to their consumers’ shifting expectations and are outperforming much larger competitors, which is good because 76% of those polled said that they plan to spend the same or more with them this year and into next.
Minority, Community, and Sustainability
Minority-owned businesses are seeing a boom, too, thanks to customers 40 and under. 80% of Gen Z and Millennials said that they had shopped at minority-owned businesses during and after the pandemic and intended to continue doing so for the foreseeable future.
Sustainability, however, was by far the most significant indicator of Millennial and Gen Z’s interest. As far back as 2015, 73% of Millennials were willing to pay more for sustainable products and brands. By 2019, 62% of Gen Z agreed. According to a report commissioned by the World Wildlife Fund and executed by the Economist Intelligence Unit, demand for sustainable products across all sectors increased by 71% over the last five years.
In durable goods, two factors stood out: quality and upcycled content. Quality speaks for itself. Objects that last don’t need to be replaced often. Upcycling makes use of discarded materials to create a product of a higher quality or perceived value. It can be as simple as Eileen Fisher’s RENEW brand that resells their refurbished, redyed clothing or as indirect as plastic bottles being made into fabric for a new couch.
Consumers for Tomorrow Today
Millennials and Gen Z are not only the consumers of the future—they are the customers of today. They are, more than any other segment of the buying population, shopping based on their values. They demand quality, social equity, and sustainability from the brands they buy.
As they grow older, their market share will continue to grow. Businesses and brands that move to win their approval now by becoming more socially and environmentally conscious will be well placed to keep that approval in the future.