Looking Ahead to Gen Z: Demographic Patterns and Spending Trends
The 31 million 18- to 24-year-olds in the vanguard of Gen Z and the 21 million 13- to 17-year-olds growing up behind them are making a profound impact on the American consumer economy. Gen Z young adults generate an aggregate income of $463 billion, while older teens (15- to 17-year-olds) have an aggregate income of $17 billion and have parents who spend $25 billion on their clothing and categories such as entertainment and personal care items.
This Packaged Facts report provides an in-depth look at how members of Gen Z view the world and analyzes what drives their behavior as consumers. One overriding conclusion of the report is that today’s teens and young adults display a wide range of complicated and contradictory characteristics that create an unparalleled challenge for marketers.
Despite being glued to their screens and living full lives on social media, these Gen Z digital natives continue to seek out consumer experiences in the brick-and-mortar world. Compared to adults on average, Gen Z young adults are less likely to buy online and are more likely to make visits to the mall. Gen Z consumers are more likely both to use banking apps and to make frequent visits to their local bank branch. They are more likely both to download entertainment at home and to go out to the movies often.
Another defining characteristic of Gen Z is their unprecedented comfort with the idea of gender fluidity and their broad view of sexuality. As a result, marketers have begun to respond to Gen Z consumers by launching gender-neutral marketing campaigns and rolling out gender-neutral products that have traditionally been geared exclusively toward either males or females.
Not only is Gen Z different from the Millennial generation that came before it, but it includes divergent demographic and psychographic segments that pose challenges to marketers. For example, when it comes to 18- to 24-year-olds paying attention to advertising or consuming traditional media, there are substantial differences across the lines of race and Hispanic origin. Non-Hispanic whites are far less likely than African American and Hispanic young adults to express positive attitudes about advertising and African Americans are much more likely to depend on traditional media.
Scope and Methodology
Scope of the Report
This Packaged Facts report analyzes the consumer behavior of Generation Z teens and young adults. It includes an overview of key trends shaping the Gen Z consumer market and highlights opportunities for marketers reaching out to Gen Z consumers. The report offers demographic and economic profiles of Gen Z and examines the shopping behavior and spending patterns of Gen Z consumers and well as their receptivity to media and marketing approaches.
Generational definitions are fluid, as market researchers and demographers do not always agree about when one generation ends and another begins. Also, since generations age one year at a time, in any given year the standard multi-year age groupings in published data do not necessarily overlap various generational definitions.
This Packaged Facts report defines Gen Z as including the 13- to 24-year-old age group and further segments Gen Z into young adults in the 18- to 24-year-old age group and teens (13- to 17-year-olds). A number of the surveys cited in the report cover different segments of Gen Z, such as 13- to 19-year-olds or 13- to 21-year-olds. Census Bureau data used in the report sometimes include the 15- to 17-year-old and 15- to 24-year-old age groups. Comparisons with other age groups include Millennials (defined as 25- to 39-year-olds) and adults in the 40-and-over age group.
The primary source of consumer data in this report is the Simmons National Consumer Survey for Fall 2017, which was fielded between October 2016 and November 2017. For trend analysis comparing Millennials when they were 18- to 24-year-olds a decade ago with today’s young adults, the report uses as a baseline the Fall 2007 Simmons survey. On an ongoing basis, Simmons conducts booklet-based surveys of a large and random sample of consumers (approximately 25,000 for each 12-month survey compilation) who in aggregate represent a statistically accurate cross-section of the U.S. population.
U.S. Government data sources include data from the U.S. Census Bureau and the Consumer Expenditure Survey of the Bureau of Labor Statistics (BLS). The age groupings used by BLS data (18 to 24, 25 to 34 as well as 18 to 35) generally conform with those used by other data sources used in this report.
The report also cites survey research conducted by a wide range of marketing and consulting firms and other non-governmental data sources. These include surveys and reports produced by Accenture, American Express/Forrester Research, Association of National Advertisers, Awesomeness TV, Barna Group (Ventura, California), Euclid Analytics (San Francisco, California), JWT Intelligence, Ketchum Global & Analytics (Chicago, Illinois), Koski Research (San Francisco, California), Raddon (Lombard, Illinois), MTV/Public Religion Research Institute, SCG (Parsippany, New Jersey), TD Ameritrade, and Transunion (Chester, Pennsylvania). The report is also based upon data collected from a wide range of other industry sources, including company websites, trade publications, business newspapers and magazines and consumer blogs.
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