Gen Z Purchasing Power is Growing and it’ll Challenge Corporations

Businesses best start listening to the younger generation because Gen Z have purchasing power

Gen Z is growing and so is its purchasing power. Centennials have new expectations that’ll challenge corporations for good.

Purchasing power refers to the financial ability to buy goods and services. For a long time, Gen Z purchasing power was underestimated due to their dependence on their parents and, for the most part, low budgets. However, since getting a bit older, Gen Z is beginning to have a substantial impact on purchasing decisions; their budgets are growing and they’re demanding more pragmatic and driven consumer choices.

Today, Gen Z is mainly made up of teens and tweens, though many are coming of age. In four years, it’s estimated that Gen Z will make up roughly 25% of the global workforce. Those in Generation Z (also known as centennials) are usually conflated in the same boats as millennials, but despite the tech-savviness of both generations, there are some critical differences between them and their consumer choices.

Gen Z © Abbie Roden

Millennials grew up around technology and mobile updates, but centennials were born after the tech boom. They have easy access to a wealth of information and have been bombarded with it since birth, preferring instant social connection. Not only that but Gen Z was born in a tumultuous global scene: many were born right after 9/11 and during the 2008 economic recession, global political unrest and lived through the pandemic and the Ukraine-Russian war at a young age. 

As a result, they are industrious, driven, and socially aware, making them less willing to consume products from a company that’s not transparent with their social responsibility. Gen Z would prefer buying from an ethically sourced, socially responsible and environmentally friendly company, even if they had to spend a little more than on a competitor that doesn’t meet these requirements. They also prefer products delivered to them, forgoing in-store pickup for other hassle-free and time-conserving methods. So, companies will have more difficulty grabbing and holding their attention due to their short attention spans.

Delivery Service © Door Dash

Centennials also care less about loyalty programs and more about getting things at a better price; the Internet and reviews are their best friends when purchasing products. Therefore, it might be a better idea for corporations to show their loyalty to their Gen Z consumer, instead of the other way around, as with older generations.

As a result of the financial, political and social climates these young people grew up in, they are hyper-aware, stressed digital natives who are motivated by change. So, corporations need to get on board, before it’s too late.