The latest US Gen Z trends Show me

In the past two years, waves of young Americans have graduated school and entered the workforce to make their own money. But the world they walked into is drastically different from anything experienced by previous generations.

In the US, the way we make and spend money will never return to the pre-pandemic status quo. Yet, for many Gen Zs, this new normal is just that – normal. 

It’s easy to assume Gen Z experiences would fall in line with millennials’, but the more data we gather on Gen Zs, the more we find how truly unique they are.

For brands looking to cash in on Gen Z’s spending power, knowing how this generation thinks is key. 

What are some of the surprising differences between Gen Zs and millennials? What does this generation look for in a retail experience? And what will this mean for commerce in a post-Covid world? 

Don’t write off physical retail

Not all trends rise and fall with age. 

Let’s start with the seemingly obvious: Gen Zs spend a lot of time online, so surely they’d be most eager to shop online as well? Not true.

Gen Zs may be more comfortable online – in fact, they spend more time on social media than any other generation, and they’re the first truly digitally native age group. But when it comes to their shopping experiences, they’re more likely to prefer physical settings. 

Sure, they’re ahead of baby boomers in wanting to order products online, but they trail behind millennials by a good margin.

And the younger a Gen Z, the less likely they are to tap into an online shopping trip. 

Products trump experiences

The fact millennials prefer purchasing experiences over products has become a well-known cliche, and for good reason, as the data shows. The generation has given life to the ‘experience economy’, which is expected to reach $12 billion by 2023. But while millennials strive for memories over memorabilia, Gen Zs haven’t followed suit. 

Chart showing Gen Z retail preferences

Gen Z, especially those younger than 20 years old (many of whom are still in school), are more likely than any other age group to say they would opt for products over experiences, and they’re the second most likely generation after baby boomers to say they prefer shopping in-store versus online. 

It may seem paradoxical, but this could have digital origins. 

Instagram is the absolute cornerstone of Gen Z’s online life. Other than YouTube, it’s the social platform they’re most likely to use more than once a day. 

It filters into their personal interests too, as their passions tend to be very visual; they gravitate toward things like modern art and photography.

With visual interests driving much of their online behavior, offline retail environments provide a good backdrop for them to curate and share online.

This could change as Instagram plunges further into ecommerce, but for the time being, offline and online are very much intertwined. 

The pandemic might have boosted online shopping, but brick-and-mortar locations can still be a real asset when they’re managed effectively. And they’ll hold a big appeal for Gen Z.

Gen Zs have a different relationship with cash and credit 

Virtually all parts of Gen Z’s lives are shaped by the internet in some way, whether it’s in watching television, listening to music, or dating.

So, you might expect them to favor digital payment services and show signs of abandoning cash completely – but the data suggests otherwise. 

Chart showing split between paying in cash or otherwise by generation

Baby boomers are the least likely to want to pay with cash of all generations, a behavior that applies to all global regions. In fact, as age increases, a preference to pay with cash actually decreases.

Given Gen Z are well-acquainted with online shopping and mobile payment services, their interpretation of “cash” might not be physical per se, but funds that they can immediately access. In other words, these youngest consumers simply aren’t spending on traditional lines of credit. 

In fact, access to traditional lines of credit may be a better explanation for this cash preference than any generational differences in online shopping behavior.

In the US, only 4 in 10 Gen Zs currently have a credit card.

This falls to as low as 31% of Gen Zs 20 years old and younger. 

Interestingly, the lack of a credit card doesn’t translate to frugality. Gen Zs are the most likely generation to say they buy things on impulse, and many are using buy now, pay later services to fund this spending. Especially as they enter the workforce and begin paying for things on their own, many are turning to these tools to fill the gaps between their income and their retail needs. 

Millennials are currently the most likely generation to take advantage of this newer line of credit, but Gen Zs are rapidly joining in. Only time will tell how this generation will impact the nature of credit as they gain purchasing power, but their regular shopping habits will certainly force them to decide between traditional credit cards or buy now, pay later options. 

23% of US Gen Zs say they often make impulse purchases, and they are the most likely generation to say so. 

While older shoppers are more cautious with money, Gen Zs are more inclined to spend when they want something. In the US, nearly 9 in 10 baby boomers say they would rather wait for a product to be on sale than buy now at full price, but only 7 in 10 Gen Zs think the same. 

Brand loyalty is earned by doing good 

Gen Zs may be more inclined than older consumers to shop in-store, but they’re also being introduced to a larger list of brands online. They’re the most likely generation to discover new brands on digital channels, from social media to ads on websites and apps, and they’ve become less loyal to brands as a result.

Put simply, brands have to work harder to hold onto Gen Zs as customers. 

Chart showing brand loyalty split by generation

They’re far less likely than other adults to say they are inherently loyal to the brands they like, and methods typically used to win over and retain customers, such as discounts and rewards programs, are less popular with Gen Zs. 

Instead of using monetary incentives, brands can win over Gen Zs by understanding and aligning with the values this generation cares most about. 

Gen Zs will be more tempted to dip into their wallet if they believe brands are a positive force in the world.  

We’ve talked before about how environmentalism has been a guiding force in Gen Z’s development, and it’s safe to assume this will stay important in the next few years as climate change continues to dominate headlines. Nearly 4 in 10 younger Gen Zs say they want brands to be socially responsible, while 3 in 10 say they want brands to contribute to their local community.

Coming of age in a pandemic

Generational marketing can be productive, as long as it’s guided by data and doesn’t rely on assumptions. This is especially relevant now, as Generation Z emerges with a more distinct group identity forged in a pandemic, and grows into a concrete segment of the US consumer base in the coming year. 

The most important lesson here is to not to assume Gen Z will follow the same path millennials did, particularly with online shopping.

Gen Z may be skilled at building online personas, but their offline retail experiences help craft them. They may spend much of their day on the internet, but prefer to own physical goods they can show off when they do go online. They may lack traditional lines of credit, but they’re open to spending impulsively. 

It’s up to brands to recognize this new generation of consumers, treat them as a powerful and unique group, and factor them into their targeted post-Covid retail strategies.

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