A groundbreaking report by NielsenIQ (NIQ) and World Data Lab (WDL) sheds light on Generation Z’s spending patterns and market influence, forecasting them to become the wealthiest generation in history. Titled “Spend Z,” the report details how this demographic, born between 1997 and 2012, is set to command a global spending power of $12 trillion by 2030.
With 2 billion individuals, Gen Z represents 25% of the world’s population. Their spending is projected to surpass that of Baby Boomers by 2034, contributing over $9 trillion in global expenditure. The report underlines a shift in consumer dynamics, highlighting Gen Z’s preference for authenticity, social causes, and a blend of online and offline shopping behaviours.
Tracey Massey, Chief Operating Officer at NIQ, emphasised the importance of understanding this generation’s unique characteristics. “Gen Z is here, they are ready to spend, and companies need to know how to pivot to serve them. ‘Spend Z’ is a tool for companies to tap into the $12 trillion growth opportunity that Gen Z represents,” she said.
The report reveals several key trends among Gen Z consumers:
- Authenticity Over Tradition: Gen Z values genuine relationships with influencers and brands. Success for this group is defined by “being true to yourself,” alongside a strong sense of identity linked to social activism and causes.
- In-Store Engagement: Despite their digital-first approach, Gen Z shows unprecedented in-store shopping activity, making nearly 50% of their purchases offline. They rely heavily on online reviews and social media for shopping decisions.
- Global Market Influence: Gen Z’s purchasing power is expected to be significant across regions, with North America, Europe, and the Asia-Pacific (APAC) leading in spending. Their consumption is particularly notable in Sub-Saharan Africa, the Middle East, North Africa, and Latin America.
- Health and Wellness Focus: The report highlights growing demand in health categories and a rising interest in health and fitness apps. Over 50% of Gen Z use fitness apps, and 17% track their health with fitness bands. Additionally, 81% of TikTok sales are projected to come from health and beauty products.
- Tech-Savvy Shoppers: Online reviews are crucial for Gen Z, with 53% likely to shop on social media or live stream platforms. They also frequently use their phones while shopping in physical stores to aid decision-making.
The report notes that Gen Z’s commitment to health and environmental sustainability will drive the growth of products that are deemed “better for” consumers and society. This category, driven by smaller brands and younger generations, currently outpaces conventional products in growth.
Marta Cyhan-Bowles, NIQ’s Chief Communication Officer, highlighted the need for businesses to invest in understanding Gen Z. “Gen Z is the most connected, largest, and influential generation yet. Investing in their needs today will yield significant returns tomorrow,” she stated.
Wolfgang Fengler, CEO of WDL, reinforced the report’s message: “Businesses must recognise that Gen Z’s vast numbers and spending power make them an essential market segment to engage with.”
For further details, the full report can be accessed here: NIQ Spend Z Report.