The two billion people in the Generation Z cohort (born from 1997 to 2012) are about to dictate where tech, consumer electronics and other industries head in coming years, according to new research.
A NielsenIQ and World Data Lab report predicts that Gen Z global spending will hit US$12 trillion (A$17.5 trillion) by 2030. In that year their spending will pass the Boomer (1946-1964) category, and by 2040 they will be spending more than Generation X (born 1965-1980).
The report states that this “potentially makes them the wealthiest generation in every region of the world” and that they’re “ready to spend”.
The report, described as “a first-of-its-kind deep dive” is aimed at retailers and manufacturers in the consumer packaged goods (CPG) and Tech and Durables (T&D) industries in order to help “build, foster, and maintain loyalty from Gen Z”.
“The question on everyone’s mind: When will their spending power catch up to their sheer volume?” it asks.
“When we look at product categories, our data predicts that through 2030, the most dynamic demand growth among the consumer class will be in the alcohol and health categories.
“Gen Z will be a part of this growth as they reach the legal drinking age. We see no signs of their ‘health conscious’-value system slowing down in either the mid- or long-term, presenting another key growth area for manufacturers and retailers.
“Research shows that when purchasing beauty products, this generation is most looking for products that are clean, have natural fragrances, and are cruelty-free. In the food space, Gen Z wants products free from artificial ingredients, low in sugar, natural and high in protein.”
The report describes Gen Z as the most multicultural generation: “Almost half of the generation is nonwhite. Their diversity also comes through in Gen Zers’ social and cultural values. Compared with Millennials (born 1981-1996), 7.7 percent more Gen Zers identify with the LGBTQ+ community, and they are less likely to affiliate with established religions.”
“Gen Z is here, they are ready to spend, and retailers need to know how to pivot to serve them,” says Tracey Massey, NIQ’s Chief Operating Officer.
The report found Gen Z “demands authenticity” and that “Being true to yourself” is the number one ranked description of success for Gen Z globally.
“Belonging and self-esteem are two other top values, along with a strong sense of identity that is linked to social causes and activism.”
Gen Z in-store purchases make up almost 50% of their share of dollars, and is higher than every other generation before them. But the report found “Gen Z begins their shopping journey online, ranks online reviews from other shoppers as the most important factor when shopping and is heavily influenced by social media”.
In Australia, 26% of Gen Z use their phones while shopping to make purchasing decisions compared to 16% of Millennials, 16% for Gen X and 3% of Boomers.
Gen Z will make up 30% of the global workforce in 2030. North America, Europe and Asia-Pacific (APAC) will continue to dominate the majority of spending, “with APAC becoming increasingly important”.
“In the APAC region alone, Gen Z spent over $3.6 Billion USD in 2024. However the shift in Australia is a little slower than the rest of APAC, with data showing in 2024, Gen X remains the dominant spending generation, set to shift to millennials by 2030,” the report states.
It found over 50% of Gen Z has used a fitness or exercise app, and 17% have used a fitness band to track health and fitness information.
In Australia, 24% of Gen Z say they “make conscious decisions on the impact their purchasing choices have on the planet and society”.
Also in Australia, 25% of Gen Z say they snack more often compared to Gen Y (15%), Gen X (10%) and Boomers (11%).
