While millennials worry about never retiring, most Gen Z’ers have never had a job—but that hasn’t stopped them from influencing their parents’ purchases.
According to a Fung Global Retail & Technology report, published this week, some $829.5 billion was spent on Generation Z (which the group defines as those born after 2001) in the United States in 2015. That was about 6.8% of total U.S. consumer spending last year, but up 8.1% over 2014, when Gen Z influenced $767.6 billion or 6.5% of all dollars spent.
Not bad for a generation that only counts for one in every five Americans, the oldest of whom are just 15.
“By 2020, Gen Z will be the third-largest age group in the U.S., narrowly lagging Gen X in size. But, while significant, Gen Z is not set to become the dominant segment of American society in the medium term,” the report said.
But that’s not to say they don’t matter. Fung Global points out that a Mintel survey in 2015 found that some 9.7% of American parents or guardians said their child influences 100 percent of what they buy, up from 7.6% in 2014.
The group also reasons that total spending on clothing for Gen Z by families in 2015 amounted to roughly $49 billion, up from $39 billion in 2013, highlighting their growing power over purse strings. At the same time, spending on miscellaneous categories such as entertainment and beauty also increased during that two-year timeframe, from $57 billion to $66 billion, which isn’t a surprise given the rise of social media and the pressure to be perceived as living an experience-rich life.
Notably, Gen Z is the first not to have known life without technology and, as such, brands and retailers need to adapt to this generation’s on-demand, Instagram-ready lifestyle.
“It’s not just that Gen Z’ers adopt tech readily, but that the tech has affected their expectations and behaviors in a way that it has not affected those of other age groups,” the report said, noting that these youngsters expect their consumer needs to be fulfilled immediately, which makes them more demanding than their predecessors.
Not to mention, Gen Z’ers are, and will continue to be, the heaviest users of technologies. Some 68 percent of Americans ages 13 to 14 have a smartphone, while 76 percent of those aged 15 to 17 have one, according to 2015 Pew Research Center data. Meanwhile, FutureCast found that Gen Z multitasks across five digital screens every day, compared with just two for millennials.
“As Gen Z matures, it will become more discerning, but its demanding nature is unlikely to be diluted. We think brands and retailers will be the ones that need to change, because Gen Z looks unlikely to compromise on its high expectations,” the report concluded.