Gaming? Smart-phones? Sneakers? What do teens spend their hard earned cash on? With some reports stating that as soon as 2020, Generation Z will account for 40% of all consumers, and spending over $40 billion, markets need to get savvy to their purchasing behavior. Luckily for them, this generation has left itself a huge cyber footprint for marketers to tap into and draw a plan. So just who is this Generation Z, and what are the things they most desire when it comes to shopping? That’s what we’ll find out, in this episode of The Infographics Show, What Does Gen Z Spend Their Money On?
Depending on who you speak to, Generation Z consists of those born between 1990 and 2009, and this makes them the largest generational group in the US. This generation has grown up totally online, being the first generation to have left the cyber gatekeepers with a complete record of their social interaction and buying habits. Research by consulting firm Millennial Branding showed that they are more entrepreneurial than the millennial generation, with 72% school students wanting to start a business, and over 60% preferring to start their own company rather than climb the corporate ladder.
This group is, as mentioned, totally digitally connected, with the average Gen Z-er multitasking across five screens per day and spending 41% of their time outside of school hooked up to some kind of device. 74% of Gen Z members spend over 5 hours a day online, and marketers who want to catch their attention obviously need to do so online. 46% consumers research items on mobile devices before making in-store purchases. They prefer to work alone, and are concerned about the economy, crime, politics, and the cost of goods.
According to an article by Mediapost, Generation Z has a spending power of $44 billion and with this they want to own stuff – they want to buy a home and a car rather than rent an apartment and take Ubers here and there. In a Gen Z study by magazine Autotrader and Kelley Blue Book, 92% of this generation plan to own a vehicle, and in doing so, 72% of them are willing to give up social media, and 63% would give up new clothes to own a new car. The handing over of the cell phone was more of an issue, with only 33% willing to give up their cell phone to have ownership of vehicle. A study from RetailDIVE shows 80% of Gen Z purchases are driven by social media, and 50% of this generation cannot live without Youtube and shows like ours.
Some more facts about Generation Z include their penchant for home-cooked foods over processed ready meals. They’d rather spend their hard-earned cash on a traditional stove than a microwave. They spend lots of money on food. Their favorite place to eat is Starbucks, according to Piper Jaffray’s survey and other surveys of the teens. Their favorite clothes brand is Nike followed by Forever 21, Action Sports, American Eagle and Polo Ralph Lauren. Despite their favorite clothing brands being sports brands, Generation Z are actually less active, preferring online gaming to the real thing.
The Gen Z buyers are a group of an estimated 2.6 billion who also influence 93% of their parent’s household spending. The National Retail Federation and IBM’s institute for Business Value surveyed 15,000 consumers between the ages of 13-21 from 16 countries, and they found that these buyers still like to shop in-store. They prefer their brands to be transparent and authentic and to offer the buyer the chance to engage in product development.
43% of Gen Z shoppers are happy to leave a customer review. 47% of shoppers said they use their smartphone while shopping in-store. This data suggest that stores would benefit from incorporating technology such as ‘magic mirror’ that displays a virtual picture of the buyer wearing items of clothes. Generally Gen Z likes to collaborate with brands, and they want to be part of the product development process rather than just the guy at the cash register handing over a credit card.
So how do we break down Gen Z spending in a nutshell? According to 2015 figures, most teens spend 23% of their money on food. Accessories account for 10% and video games 8%. Electronics another 8% and shoes make up 7%. The rest is spent on music, movies, and events. The winner in all this appears to be Starbucks who are the preferred brand in the largest spending bracket. So remember that next time you sip on a Java Chip Frappuccino.
So, what do you think? Are you generation Z? Where’s your money being spent? Do you want to save up for a home or a car, or are you looking to spend freely on the more immediate enjoyable things in life? Let us know in the comments. Also, be sure to watch our other video called – Millennials vs Gen Y – How Do They Compare. Thanks for watching, and as always, don’t forget to like, share and subscribe. See you next time!