worldyoung people It has always puzzled the elders. Today’s youth are no exception. Sure, they are perplexed. The wallet is thin and it tastes expensive. They value convenience and social conscience. They want shopping to be seamless and personal.They crave authenticity while they exist always immersed In a substitute digital world. As these young people start spending money in earnest, brands are trying to understand what these walking paradoxes want and how they shop. The answer will define the next era of consumerism.
The absolute numbers are frightening. About 125 million people aged 10 (who will become consumers in the next few years) to 34 years old live in the European Union.zand millennials, one-third of the population.Total Annual Expenditures of U.S. General-Headed Householdszs and millennials will reach $2.7 trillion in 2021, about 30% of the total.
Good place to start your analysis spirit Young consumers need to think about the economy that shaped them. Today, in his 30s, he came of age during the global financial crisis of 2007-2009 and the recession that followed. Their younger peers had a little more luck, starting careers in years when a tight labor market pushed wages up. That is, until the covid-19 pandemic upended much of their lives.
These two major shocks, which parents were largely spared during the calmer economic years of the 1990s and mid-2000s, fueled pessimism among young people who experienced them. According to a McKinsey study published in 2022, a quarter of generationszI doubt they can afford to retire. Fewer than half believed they would own a home.
Uncertainty about the future may fuel impulsive spending of current limited resources. Young people have been hit harder by COVID-19 than other generations and are now recovering. enjoying According to McKinsey, the American millennial (since 1980 he was born in the late 1990s) spent 17% more in his year to March 2022 than he did the year before.Despite short-term recovery from the dark days of the pandemic, their long-term prospects are not so good.American Millennials and Generationszs has accumulated less wealth than Gen-.X Or baby boomers of the same age.
Easy access to dissemination of payments can also encourage spillovers. Another McKinsey survey in October 2022 found that 45% of Europeans in their teens and early twenties plan to splurge in some way in the next three months, compared to before 1964. 83% of born baby boomers said “no” to such waste. Market research firm Forrester found that most users of “buy now, pay later” apps are between the ages of 20 and 20. When it comes to her shopping, she admits to being uninhibited until her bill arrives, until she chuckles.
In many ways, young people’s shopping habits, like their lives, are defined by an “attention economy” that has made it much easier to shop without going to a store. The rise of social media means there are many new ways to get consumer attention. Most young shoppers didn’t know a world without smartphones. From age 18 to 34 he is an American, more than two-thirds of him uses a device for more than four hours each day. As we rise in the age of Airbnb, Amazon and Uber, our expectations of convenience increase. Young people want shopping to be completely problem-free.
In the speed-of-light online world, it seems that our tolerance for long delivery times is also declining. According to a study by business software giant Salesforce, Gen-z Americans of all ages tend to want their groceries delivered within the hour. According to Forrester, they’re more likely than other people to shop using their mobile phones, and they’re an afterthought when the range of payment methods is limited.
As McKinsey named it, these “regular buyers” often avoid the once-a-week shop for quick fixes on everything from fashion to furniture. They prefer subscriptions and often prefer shared access to products over full ownership. This has led to a boom in online rental sites (such as fashion’s Rent the Runway) and streaming services. Investors may have left Netflix, but Gen-z I have not. The company is one of America’s most popular brands among its age group.
The Internet has also changed the way young people discover brands. Print, billboard, or TV advertising has been replaced by social media. Instagram, part of Meta’s empire, and TikTok, a Chinese-owned video-sharing app, are places young people seek inspiration, especially when it comes to fashion, beauty, sportswear and other products where looks matter. increase. User-generated videos on TikTok can quickly bring viral fame to even small brands. Such apps are increasingly adding features that allow users to shop without leaving the platform. According to McKinsey, by 2021 he will have six of her 10 Americans under the age of 25 complete purchases on the social media site. Some companies are following China’s “social commerce” model, combining live-streaming entertainment with shopping opportunities.
But for the time being, young consumers in the West prefer to shop outside of social media, scouring sites like Amazon for bargains on the brands they discover. A study by investment bank Cohen found that spending on subscriptions to Prime, Amazon’s home delivery and entertainment service, only tracks phone bills, meals and travel in young people’s shopping carts.
As long as the experience is personal and ideally integrates the virtual and physical worlds, we’re not avoiding brick and mortar stores entirely. Nike, for example, allows users to design their own trainers on their website, pick them up in person after attending a dance class in-store, and upload them to TikTok or Instagram.
The new world of shopping has given young people a more informed view of the businesses they buy from. The information overload of the attention economy has not dulled the senses of young people.On the contrary, they seem to have become hypersensitive to brands that pretend to be something they are not particularly.zs is a fact-checking claim made in ads in 6 countries. Forrester calls young consumers “truth barometers,” citing survey data that shows some of his teens have stopped using certain brands due to dubious ethics. increase.
Brands that don’t match the long list of requirements should be careful. Even if they don’t get what they want, young people are willing to try something new. Another McKinsey survey in October 2022 found that 9 out of 10 generationsz Millennial Europeans have changed how they shop, where they shop, and the brands they buy in the last three months.
How fluid young shops are. What they buy is also changing. Things that older generations considered at their disposal, such as health and luxury, are now necessities. Self-care is all the rage. Young people are increasingly turning to luxury brands at a younger age for clothes that highlight their individuality. According to consultancy Bain, the average Gen-z Shoppers make their first luxury purchase at the age of 15. Their counterpart in his 30s he was 19 when they entered the luxury market. Some buy luxury goods as a hedge, believing that they will be valuable even in hard times. Luckily, these are now readily available for sale on pre-sale platforms like Vinted and Vestiaire Collective.
More broadly, younger consumers profess to be more value-oriented than previous generations. A Forrester study shows that this kind of attitude is even more common among teens and young people in their 20s than those who are slightly older. Some of these values center around identity (race, gender, etc.). Some stem from young people’s concerns, such as climate change. kpmgan accounting firm, Gen-z People across 16 countries are more concerned about climate change and natural disasters than any other generation. Young people in emerging markets are even more insecure, according to a study by bank Credit Suisse.
Revealed preferences paint a more nuanced picture. Forrester, meanwhile, has identified Patagonia, a premium outdoor clothing brand with a proven track record of green excellence, as Generations.z A favorite in the world of abundance. Young people are all the age groups most likely to try and stick to alternative proteins such as oat milk and plant-based meat substitutes. Global consumers pay an average 9% premium for greener vegetables, according to Credit Suisse research. Affluent global young consumers are less willing to pay a premium for these alternatives than consumers in emerging markets.
Young people’s desire for instant gratification is also fueling consumer habits that are clearly not environmentally conscious. The younger generation has effectively invented fast commerce, says Isabel Allen. kpmgAnd that convenience is affordable. The environmental benefits of eating plants instead of meat are quickly reversed when meals are delivered in small batches by petrol-powered motorbike couriers. His Shein, a clothing retailer, is a Gen-z Popular in the West despite being criticized for being wasteful. Its fashionable garments are cheap enough to wear once and then throw away. ■
Correction (01/18/2023): The original version of this article used the American Gen-Z.s could make up the majority of shoppers by 2026. very sorry.
https://www.economist.com/business/2023/01/16/how-the-young-spend-their-money how young people spend money