$44 billion. That’s the amount of spending power Gen Z brandishes a year, according to data from “Uniquely Generation Z.”
The demographic following Millennials is young, not afraid to spend money, but at the same time maintains a bank account.
Gen Z has no intention of making the same mistakes of Millennials: think living at home, student debt and minimal savings.
In my last column, we discussed Gen Z’s influence on household spending.
Now, let’s dive into what they purchase, or plan to purchase and how these habits vary from Millennials.
Gen Z has a sense of pride in ownership. Rather than rent, lease or take an Uber around town, this demo wants to own a car and eventually a home.
Lofty goals for a young group, born between 1996 and 2009.
According to the Gen Z Automotive Study, conducted by Autotrader and Kelley Blue Book, 92% of Gen Z own or plan to own a vehicle. Prepared to sacrifice, Gen Z is willing to give up social media (72%), new clothes (63%) and their cell phone (33%) if it means owning a car.
Gen Z cares about hybrid cars, but something ranks higher in importance: price. The study found that 77% of Gen Z felt price was most important, compared to 72% of Millennials in their teenage years. If they were to buy an environmentally friendly vehicle, 43% would to save money on gas, as opposed to 30% to prevent global warming.
Safety truly comes first for Gen Z, finding it more important than previous generations did when they were teenagers: Gen Z (43%), Millennials (25%), Generation X (11%) and Baby Boomers (9%).
Brand specificity plays little to no role in Gen Z’s car buying decision, although Ford, Chevrolet and Honda were preferred based on their reputation for being traditional, practical and trusted.
If you think it’s a big deal for Gen Z to want to own a car, take a look at stats from the Zillow Housing Aspirations Report, Q1 2017, which found that Gen Z desires to be a homeowner, despite the low number of demographic old enough to rent.
The report found that 57% of Generation Z renters would consider buying instead of renting. These are young adults in their early twenties, just starting out. The median household income for Gen Z renters is $27,827, with 44% making less than $25,000.
Known as the first generation born into a high-tech world, Gen Z moves fast when searching for a home. Thirty percent of Gen Z renters spend less than a month searching, compared to 26% of all renters.
Gen Z submits approximately 3.1 applications during their search for a rental home, compared with 2.6 applications for Millennials, 2.4 for Generation X and 2.2 for Baby Boomers.
As much as Gen Z wants to “own” things, they don’t actually have much, which explains why half of Gen Z renters want a home to have their preferred utilities, compared to 40% of all renters. Fifteen percent of Gen Z renters want a furnished rental home, compared to 9% of all renters.
Much of the Gen Z demo not living on their own just yet still exercise a high level of household spending influence.
Data from “Uniquely Generation Z,” commissioned by IBM Institute of Business Value and NRF, found that 93% of Gen Z parents note their children have an actual influence over the family’s household spending, predominantly on Food & Beverage (77%), Furniture (76%), Household Goods (73%), Electronic Goods (61%), Clothes & Shoes (60%) and Personal Care Items (55%), respectively.
Gen Z will make up 25% of the U.S. population by 2020. It’s closer than you think.