5 Things Gen Z Will Spend Money On & Why Marketers Need to Care

Move over, Millennials. There‘s a new generation taking the retail world by storm and redefining how, why and what we buy. Generation Z, or those born between 1997-2012, may be young, but their impact on spending and shopping trends is undeniable.

With a purchasing power set to reach $143 billion in the U.S. alone, this group of digital natives is shaking up brand loyalty, championing new causes and carving out unique consumer identities that are all their own. And the smartest companies are taking note.

In this post, we‘ll dive into five key categories where Gen Z is focusing their mighty spending potential and share strategies straight from top brands on how to market to this incredibly influential audience.

But first, let‘s set the stage with some quick facts about Gen Z and why understanding their consumer behavior is so critical:

• Gen Z makes up over 20% of the U.S. population
• Gen Zers influence $600 billion in family spending
• This cohort will account for 40% of global consumers by 2020
• 66% of Gen Z say they would pay more for sustainable products
• 72% of Gen Z want brands to contribute to social causes

Ready to learn what makes Gen Z tick as shoppers and how your brand can adjust to reach this next powerhouse generation of consumers? Let‘s jump in.

1. Electronics & Tech: Function Meets Fun

Having never known a world without the Internet, Gen Z is the first true generation of digital natives. So it‘s hardly a surprise that a significant portion of their budget goes toward electronics and tech.

A recent survey by Comparably found that over half of Gen Zers spend the majority of their disposable income on technology and electronics, second only to food. But they‘re not just buying the newest iPhone to keep up with the Joneses. For Gen Z, tech is a means of connection, self-expression and experience.

When marketing tech to Gen Z, emphasize how your product seamlessly integrates into and enhances their digital-first lifestyle. Highlight features like:

• Ease of use and convenience
• Ability to customize and personalize
• Capacity for creative expression (a la TikTok trends)
• Immersive and interactive experiences

Tech giants have already caught on to this. Take Samsung, for instance. To promote their Galaxy smartphones, the brand partnered with Gen Z music sensation Billie Eilish on a #TeamGalaxy social campaign where fans create videos set to her song "my future," – all shot #withGalaxy devices.

By co-creating experiences with Gen Z‘s favorite stars, Samsung positioned their tech as a tool for creativity and connecting to a shared passion, values that resonate strongly with this cohort.

Some other strategies to consider:

• Host exclusive virtual events or product drops within popular video games
• Create behind-the-scenes content showing how your tech is made
• Partner with Gen Z influencers for authentic product reviews and tutorials

2. Secondhand & Thrift: The Ultimate Bargain Hunters

Forget designer labels. For budget-conscious Gen Z, secondhand is the new Chanel. A survey by ThredUp found that 40% of Gen Zers have bought secondhand apparel, footwear or accessories, and they are 2.5x more likely to buy used clothing than older generations.

This spend-savvy group takes pride in thrifting one-of-a-kind pieces and scoring major deals. Clothing resale apps like DePop and Poshmark have exploded in popularity with Gen Z for both buying and selling.

Growing up in the shadow of the Great Recession and saddled with concerns about student debt, Gen Z is extremely price-sensitive. 81% research an item‘s price online before pulling the trigger and 73% say competitive pricing is an important factor when deciding to buy from a company.

Gen Z is also more open to alternative ways of affording what they want, like buy now, pay later (BNPL) services. The Attest survey revealed that Gen Z is 39% more likely than other generations to have used a BNPL plan in the past year.

When marketing to Gen Z, consider:

• Offering student, first-time buyer or birthday discounts
• Partnering with BNPL services like Klarna or Afterpay
• Running flash sales or limited-time offers promoted on social media
• Highlighting your most affordable options and value-for-money bestsellers
• Allowing customers to buy secondhand versions of your products

A great example of a brand tapping into Gen Z‘s love of thrift is online vintage boutique Tunnel Vision. They‘ve built a cult Gen Z following on TikTok by posting sneak peeks of new items and styling videos to their 200k followers, driving tons of traffic to their Poshmark shop.

3. Health & Wellness: Self-Care Is Essential

Between academic pressure, social media stress and coming of age in a pandemic, it‘s no wonder Gen Z has embraced self-care like no other generation. Mental health awareness and holistic wellness have become defining issues for these young consumers.

Gen Z is willing to put their money where their health is, with 41% saying they spend more on wellness than any other category besides necessities. This includes things like therapy, meditation apps, fitness classes, healthy food and supplements.

When marketing wellness to Gen Z, keep these strategies in mind:

• Embrace body positivity and diversity in your imagery
• Offer resources and content to support their mental wellbeing
• Host virtual wellness challenges or partner with Gen Z wellness influencers
• Be transparent about ingredients and sourcing of your products
• Support mental health organizations or causes

A wellness brand winning with Gen Z is meditation app Headspace. They‘ve tailored their social content and app offerings to the stresses of Gen Z life, with meditations for studying, dealing with climate anxiety and coping with grief. During the early days of COVID-19, they offered gen z free premium access to help them navigate the mental health challenges of isolation.

4. Small & Local Business: Community-Minded Consumers

Perhaps no generation feels the pull to support small and local quite like Gen Z. A recent GWI survey found that nearly half of Gen Zers have purchased more from small businesses during the pandemic, and 43% say they‘ll keep shopping small even after.

For Gen Z, it‘s all about connection and authenticity. They want to get to know the real people behind the brands they buy from and feel good about supporting their community.

Small businesses can attract Gen Z by:

• Sharing your founding story and the faces behind your products
• Collaborating with other local businesses on events or offers
• Using behind-the-scenes content to give an insider‘s look at your operations
• Supporting local causes and showcasing your positive community impact
• Engaging one-on-one with Gen Z customers via DMs and comments

One business appealing to Gen Z‘s locavore sensibilities is Topicals, a Gen Z-founded skincare startup focused on chronic skin conditions. They source ingredients from local farmers, spotlight their community impact and engage heavily with their Gen Z fanbase on social media. As a result, they‘ve garnered a loyal following and recently expanded into Sephora.

5. Financial & Educational: Investing In Their Future

Saddled with student debt and scarred by the economic impact of the pandemic, Gen Z has their sights set on a financially stable future. And they‘re taking steps to get there earlier than generations past.

60% of Gen Z has a savings account and a third have an investment account. They‘re more likely to stick to a budget and use financial planning apps than millennials. In fact, a study by The College Investor found Gen Z has a higher median savings account balance than millennials at the same age.

Not only are they investing their dollars, they‘re investing in themselves through education. Gen Z is on track to be the most educated generation yet, with a higher college enrollment rate than millennials had at their age.

This financially savvy generation turns to bite-size educational content to inform their money moves. Nearly a quarter of Gen Z use TikTok and Instagram to learn about personal finance and investing. Brands like Fidelity and Betterment have capitalized on this by creating explainer videos and infographics about complex financial topics tailored to Gen Z attention spans.

When marketing financial products and services to Gen Z, consider:

• Breaking down key concepts with easy-to-digest visual content
• Partnering with finance influencers and experts Gen Z trusts
• Offering tools and calculators to help them budget and plan
• Creating resources to help them navigate student loans and financial aid
• Highlighting how your product can help them achieve long-term goals

Spending Category	Gen Z Preference	Marketing Strategies
Electronics & Tech	Ease of use, personalization, creative expression	Co-create with influencers, immersive experiences, BTS content
Secondhand & Thrift	Unique finds, major deals, BNPL options	Flash sales, student discounts, resale partnerships
Health & Wellness	Mental health support, natural products, community	Inclusive messaging, wellness challenges, transparent sourcing
Small & Local Business	Community impact, authentic connection, behind-the-scenes	Founder storytelling, local collabs, one-on-one engagement
Financial & Educational	Saving & investing early, bite-size money tips	Visual explainers, finance influencer partners, planning tools

Connecting with Gen Z: Authenticity Above All

While Gen Z‘s spending power is set to soar, brands won‘t succeed by simply throwing flashy ads their way. To truly connect with this generation, marketers must embrace Gen Z‘s core values and meet them where they are with authentic, purpose-driven messaging.

"Gen Z can see through surface-level attempts to win them over. They want brands to take real action to support the causes they believe in and reflect the diversity of the world around them. When you lead with genuine purpose, Gen Z will champion your brand like no one else." – Tiffany Zhong, Gen Z expert and Founder of Zebra IQ

The brands that will win Gen Z‘s hearts (and wallets) in the years to come will be those that see their unique perspective, speak to their progressive values, and make them feel empowered to positively impact their communities and the world.

By understanding Gen Z‘s motivations, tapping into their digital savvy, and engaging with them on their terms, you‘ll be well on your way to building lasting connections with the most powerful consumer generation yet.