Insights into the Spending Habits of Gen Z Consumers and Young Professionals
Baird’s Global Consumer team recently conducted a survey of Generation Z (Gen Z) consumers regarding their spending habits within Baird’s areas of expertise. Nearly 200 national respondents between the ages of 18 and 26, 57% male and 43% female participated. As of May 2024, Gen Z makes up over 40% of the global consumer population and about 20% in the United States with over $360 billion in spending power1. Our results showcase where this generation is deciding to spend their money and key trends that brands need to maximize to build their customer base.
We identified four key takeaways from the survey2 based on the questions asked:
Restaurants Lead the Charge for Spend Allocation
By far, restaurants make up the largest share of spend with 58% of participants spending over a quarter of their budget in the category. Entertainment is the next highest spend category followed by travel, where 74% have noted that they plan to spend more on travel in the future. Fitness and apparel are next in line and represent stable and growing categories with 54% and 43% expecting to spend more or the same going forward, respectively.
Price and Features Drive Purchasing Decisions
Price, features/capabilities and aesthetics are top priorities for young consumers, with 84%, 65% and 24% ranking them as their first or second choice.
Shopping Online or “Local” are the Channels of Choice
Company websites capture the majority of spend for young consumers with Amazon leading as the top channel of purchase. Local stores represent another winner with younger consumers with 41% of participants spending over 25% of their budget (compared to 33% spending 25%+ at national chains/department stores). Participants also allocate a small pocket of spend to unique channels such as TikTok, pop-up and secondhand stores.
Digital Presence Fuels Brand Familiarity
Brands with a stronger digital presence also received higher Net Promoter Scores (NPS) amongst those surveyed. Interestingly, legacy brands that have been around for decades continue to have staying power along with the up and comers as the digital space allows for a fresh burst in popularity.
Connect with Baird’s Global Consumer team to learn more about these results and our recent transactions with some of the world’s most admired companies and brands.
1Source: McKinsey & Company 2Source: Baird’s independent survey results of 196 participants.
