iGen and the Future of Consumerism
April 23, 2019
Generation Z, although young, are still powerful consumers. According to Rieva Lesonsky, CEO of GrowBiz Media, by 2020 Generation Z will account for 40% of all U.S. consumers. A 2017 report from International Business Machines Corp. and the National Retail Federation reports that more than 70 percent of iGen consumers influence their family’s spending. Heavy use of social media leads Gen Z to look at real people, and especially their peers for influence on what to buy.
About 72% of Generation Z consumers rank cost as the most important factor when coming to purchases. Unless products are proven to be worth high prices, Generation Z consumers will look for a cheaper alternative.
Author and speaker Meghan Grace stated,“most of Gen Z isn’t making money right now so even investing in a pair of sneakers we’ll make them think about making the best decision when purchasing. They’re going to look at if the productive is effective for what they need to do as well as if it has social capital with it. There’s also this mindset of: do my peers think it’s cool?”
“They often look at if the company that they’re supporting ethical in their practices. Transparency in business is very important to them,” said Grace.
Seeing their parents impacted by the recession of 2008, Generation Z are commonly savers, rather than spenders. “So there really have this mindset of saving for a rainy day because we don’t know when the next rainy day is going to be,” said Grace, “The information Gen Z gets around information related to financial investments mostly come from their parents and their friends as opposed to learning about finances through traditional means.”
Due to heavy use of technology, iGen is being held responsible for the “death”, or rather the disruption of shopping malls.
“Any time that an industry is disrupted by something, they want to figure out what is causing it,” said Grace, “it’s one of those things where we need to look at the “why” behind it.”
According to a 2017 survey by Adyen NV, a global payments processor, 93 percent of iGen consumers prefer to shop without the help of a sales associate. Online shopping offers a independent, and personalized experience most stores cannot offer. “More than two-thirds of U.S. malls saw a decrease in national retailers in 2018, according to a report from property research firm Green Street Advisors LLC,” as reported by Bloomberg.
Alongside malls, the decrease in sales of print magazines is also blamed on iGen. According to Bloomberg, “teen magazines have struggled more than others to reach their intended audiences. Just last November, Condé Nast closed the quarterly (once monthly) print edition of Teen Vogue. Meanwhile, Hearst Communications Inc.’s Seventeen magazine, a 73-year-old print publication, slashed frequency from 10 magazines to six in 2016.”
Due to the rise of mobile payment apps among younger generations, cash is a dying industry as well. Apps such as Venmo, Google Pay and Apple Wallet make it less necessary to carry an actual wallet.
Bloomberg reports that, “American teens are four times less likely to use cash than the general public and only use cash for 6 percent of their transactions, according to data from teen debit-card company Current.”