As the never-ending battle of the generations continues, the flag-bearers are constantly trying to pick a winner. Be it the fixation on workplace trends or new dating terms coined every waking hour, both Gen Z and Millennials manage to find a bone of contention. As Gen Z begins to earn what they call “adult money”, millennials are either at the cusp of having a child or buying their first car.
As big purchases become an upcoming feature among both generations and purchasing power increases, so does financial literacy. Today, spending money no longer means impulse online purchases, but also investments in SIP, mutual funds, and equity. It also points out the different kinds of debt Gen Z and millennials are facing. So let’s settle the debate once and for all.
Gen Z vs millennials: Spending habits
While Gen Z may not surpass millennials in purchase values, they are the next consumer base of several brands. From having dedicated app sections for Gen Z to building retail outlets focused on their spending habits, this generation is surely dominating all market parameters. As per a GWI report, Gen Z is seen relying heavily on Buy Now Pay Later (BNPL) platforms. But when it comes to impulse purchases, 44% of them surpass millennials when it comes to shopping on social media, representing $360 billion in spending power, as per a BBC report.
And it will only increase. The cohort’s global spending is set to reach $12 trillion by 2030, more than the net worth of the richest person in the world. By the next decade, the ‘TikTok‘ generation will also represent 17% of the global retail spend, reported Afterpay.
What are they spending on?
However, it is also important to note the kind of things they are spending on. From Instagram-worthy experiences to luxuries like a car, house, and even equity investments. Financial Express previously reported that Gen Z are now affording luxury, one EMI at a time. While flexible finance allows the generation to afford goods with monthly installments, the convenience of credit becomes an attractive alternative. A report from Oliver Wyman found that Gen Z is 2.6 times more likely to buy clothing every week than other generations. But luxury seems like a distant dream for the generation, as the International Council of Shopping Centres revealed that 48% of them shop at discount retailers.
The generation that practically lives on its 6-inch device needs no introduction to digital payment gateways. A driving force of purchases, the digital divide no longer exists between Gen Z and millennials.
So, who is better?
While ‘better’ belongs on a subjective yardstick, millennials usually carry the “responsible” tag with them. However, nearly 90% of both Gen Z and Millennials make impulse purchases online, but Gen Z does so more frequently and for lower-priced items. There is a huge gap between affording experiences versus splurging on luxury fashion, and studies suggest that the generations invest equally in both options.
Given the irregularity in income, Gen Z tends to splurge more on less-priced items online. Studies find millennial splurges are a bit balanced, intentional, and those who value experience more than commodity. But at the same time, Gen Z is susceptible to trends and prefers to carry short-term debt with BNPL options. Thus, it really depends on the parameter of defining better, but making informed decisions and expressing their belief is surely noted as a common consumer trend in both generations.
