Despite perceptions of Gen Z, those born between 1997 and 2012, as being the ‘broke generation’, NIQ’s latest report, Spend Z, reveals the unparalleled spending power of the demographic.
Produced in collaboration with World Data Lab (WDL), the comprehensive generational spending report highlights that Gen Z are the largest generation ever, with two billion members globally. Their combined global spending power will reach $12 trillion USD by 2030, at which point they will surpass Boomers in spending and will overtake Gen X in 2040. In just over 15 years, Gen Z will be the wealthiest generation in every region of the world, requiring a new strategic outlook for many businesses.
Wolfgang Fengler, CEO, WDL, said that the size and spending power of Gen Z makes this demographic a priority for business planning.
“Gen Z is the largest, the richest, and the most global generation ever. Businesses need to know that Gen Z is two billion people strong, and meeting their needs is a must,” he said.
While the growth in Gen Z’s spending power in Australia is slower than that of North America and Europe, Gen Z in the Asia-Pacific region still spent over $3.6 billion USD in 2024 alone.
Tracey Massey, COO, NIQ, said that Gen Z represents a significant growth opportunity for businesses that orient themselves effectively.
“Gen Z is here, they are ready to spend, and retailers need to know how to pivot to serve them.Understanding what makes this generation different is key to unlocking the greater than $12 trillion USD growth opportunity they represent. Companies are trying to understand the opportunities for growth with Gen Z, and how they are influencing others. Spend Z is just one example of how NIQ helps our clients uniquely achieve their ambitions by anticipating and meeting consumer needs,” she said.
Key strategy points
As with any generation, Gen Z have unique concerns and preferences when it comes to their shopping activity. Of particular importance is Gen Z’s focus on authenticity, with ‘being true to yourself’ ranked as the number one description of success for the generation. When shopping, this translates to a desire to build a genuine relationship with brands. Additionally, 37 per cent of Gen Z in Australia say they are sceptical about which sources of information they can trust and will seek to verify claims made by brands in marketing materials.
The relationship to technology is another important part of understanding Gen Z shopping behaviours. Typically, they begin their shopping journey online, seeking reviews from other shoppers and from social media. New purchase platforms are emerging as well, with 53 per cent of Gen Z likely to make purchases on social media or live stream platforms. However, their in-store spending is higher than every other generation, making up almost half of their total spending. Technology still plays a role in the in-store experience, with 26 per cent of Gen Z Australians using their phone while shopping to make purchase decisions, compared to 16 per cent of millennials and Gen X, and three per cent of Boomers.
Finally, health, wellness, and sustainability are all key concerns for Gen Z shoppers, which is reflected in their shopping habits. The search for better-for-you options is particularly evident in the alcohol category. Additionally, with 24 per cent of Gen Z Australians saying they are conscious of how their purchase choices affect the planet, brands with sustainability credentials will also increase in importance.
Marta Cyhan-Bowles, Chief Communication Officer, NIQ, emphasised the importance of strategizing for Gen Z customers sooner rather than later
“Gen Z is the most connected, largest and influential generation yet. Gen Z will have fewer children, later, will have unprecedented spending power, and will continue prioritising certain categories, like health and wellness, to an extent generations before them have not. Our analysis leaves no doubt for retailers: investment in Gen Z today will pay off tomorrow,” she said.
