Generation Z continues its emergence as a primary consumer segment, and, as the group approaches the holidays, it is demonstrating some distinct preferences that can translate to opportunity.

Although sources differ slightly, Gen Z consumers range from 11 to 26 today. Because many are minors, market research often focuses on those 18 to 26, which is likely to reflect most of the younger echelon’s preferences.

At the same time, because they are in a similar life stage, some market research focuses on older Gen Zers and younger Millennials ages 18 to 34. As such, some ambiguity exists in market research derived from Gen Zers, but in general, the numbers suggest Gen Z has been heavily influenced by certain specific events that mark its development on the consumer front.

Gen Z has grown into an essential group of housewares consumers. In the HomePage News 2023 Consumer Outlook Survey published early this year, young adults aged 18 to 34 were the most enthusiastic about purchasing from almost every housewares category examined. The group, comprising older Gen Zers and younger Millennials, consists of consumers starting out and setting themselves up to live independently. That makes them natural home product shoppers.

However, when divided strictly by generation, the Gen Z group tied and exceeded Millennials in their expectation to purchase housewares across multiple categories. In the study, Gen Z tied or edged out Millennials in anticipation of buying drinkware, flatware, kitchen electrics, home storage and organization, home environment, cleaning tools, floor care electrics, luggage and travel accessories, pet accessories, and, by several points, personal care. Whether this suggests a greater affinity for home cooking or entertaining, the result at least provides evidence that Gen Zers are home-conscious and willing to spend on products they can use in the domestic space.

The 2023 IHA Occasions Report published by HomePage News in late 2022 looks at life events and potential housewares purchases associated with them. Millennials tended to be the group looking forward to the most life events in 2023, from leaving for college through to retirement, including marrying and new home ownership. However, Gen Zers were usually close behind and ahead of older echelons. Gen Zers and Millennials anticipated life events upcoming for themselves and their immediate circle of family and friends. In both cases, Millennials tended to have more happenings lined up except where age might make Gen Z more prominent, as in the case of purchasing for their own moves to college.

When it came to purchasing housewares gifts for occasions, Gen Z was a solid second to Millennials throughout the study. Gen Zers edged out Millennials in the likelihood of purchasing a housewarming gift, although Millennials beat Gen Zers when it came to gifts for those leaving for college.

Shopping for major life events is different than doing so for holidays, but one thing that comes out of the two HomePage News reports is that Gen Z is the consumer demographic looking ahead to making housewares purchases throughout this year, certainly more so than Gen Xers and Baby Boomers. Retailers and vendors should be taking Gen Zers seriously in the holiday sales period in terms of products provided and outreach.

Millennial youths were rocked by the Great Recession. That made them somewhat wary of economic institutions and caused them in many cases to enter life stages such as marriage and first home purchases later than might have been expected originally. Gen Z also has grown up under the influence of the COVID-19 pandemic and a more acute concern about environmental change as well as such social issues as equity.

Gen Z also is the first truly digital generation. Unlike Baby Boomers, Gen Xers and even some Millennials, online shopping was never a new revelation for Gen Zers.

As Gen Zers have emerged as consumers, the holiday shopping season has been evolving from its traditional timing. Amazon and then its rivals began launching major October sales events, accelerating an expansion of the holiday shopping season from the traditional Thanksgiving Weekend to Christmas period.

Marsha Everton, principal and founder at the Aimsights Group, a market research company that focuses on Millennials and Gen Zers, told HomePage News that, when it comes to shopping, Gen Zers like the experience of shopping in physical stores.

“It’s all about the experience,” Everton said. “And they are very discriminating and demanding about that experience. They want ‘unique” more than brand.”

In outreach to Gen Z consumers, Everton pointed out, TikTok is “huge. It’s the search engine of choice, displacing Google as the number one search engine in that age cohort.”

Still, although TikTok has become a pervasive influence, social media doesn’t dictate Gen Zer choices.

“Family and friends are still the most important influence on buying a product or brand, actually an even greater influence than we see in other generations/age groups,” Everton said. “For all of the media hype about their online habits, they are very relationship-driven and trust advice from people they know more than general online information.”

Research from Morning Consult indicated far more Gen Zers began their holiday shopping early compared to last year: 34% started late August 2023 versus 21% in 2022, a swing that contributed to shifts in fulfillment channel usage for early orders. Across the early shopping period, Gen Zers edged out Millennials as the top group of early shoppers, with 33% getting a jump on the season versus 28% a year earlier, according to Morning Consult. Gen Xers and Baby Boomers fell back concerning early shopping, with only 21% of each shopping by late August. Although many analysts hypothesize earlier shopping follows the desire to take advantage of retail sales and spread out holiday expenses, Morning Consult asserted its data indicates the opposite: Early shoppers are splurging, not trying to save.

In the Morning Consult research, only Gen Zers, at 6%, plan to spend more on decor for the 2023 holiday season.

Whether Gen Z consumers can sustain the early shopping pace through the holidays is an open question, the Morning Consult opined, but Gen Zers are out in front early and just might stay there.

The disruption and lengthening of traditional holiday shopping seems to be taking particular hold with Gen Z, which may also be true of Millennials. According to market research from shopping rewards app ShopKick, 40% of Gen Xers and 38% of Baby Boomers planned to shop on Black Friday, while only 18% of Millennials and 3% of Gen Zers expressed an intention to do so. The results in this year’s study contrasted sharply with the study conducted by ShopKick a year earlier. Then, 56% of Gen Z and half of Millennials planned to shop on Black Friday, a more significant proportion than the 44% of Gen Xers and Baby Boomers and 36% of the Silent Generation.

Bargain hunting isn’t the only factor driving Gen Z holiday shopping. In a recent study by market researcher Mintel, 48% of winter holiday shoppers said they might consider looking for pre-owned gifts. However, the proportion increased to 68% with GenZ consumers ages 18-24. The number of consumers planning to shop for the holidays in secondhand retailers grew eight percentage points in the study year-over-year, with 23% of Gen Z and Millennials planning on doing so.

In the fight for Gen Z dollars, as Everton of Aimsights pointed out, it’s critical to understand the importance of TikTok. According to Tinuiti Research, 35% of Gen Z consumers point to TikTok as the social media where they discover new products, followed by 18% on Instagram and 10% on Facebook. In contrast, Baby Boomers’ discovery is 3% TikTok, 5% Instagram and 25% Facebook.

When considering which major retailer Gen Zers prefer to start consumer product searches, in a bit of a surprise, 27% say Walmart, followed by Amazon (26%) and Target (12%). That contrasts with Baby Boomer search-beginning preferences of 29% for Amazon, 26% for Walmart and 4% for Target.

In other research, ICSC stated that 47% of Gen Zers will support brands that show concern about sustainability and an equal proportion on equity progress.

Gen Z might be pulling other generations along in their consideration of sustainability and social issues. In a First Insight study, Gen Zers were most likely to say they would spend more for sustainable products in 2019, at 73%. However, in 2021, Gen Z had slipped marginally in its willingness, down two points. Millennial willingness advanced to 72% from 68%, and Gen X willingness advanced to 78% from 55%. First Insight credited much of the change in the older generations’ purchasing to the influence of Gen Z.

Retail Development

Many retailers are introducing or touting AI-supported shopping initiatives ahead of the holiday season. For example, Newegg Commerce, a retailer heavily focused on younger consumers, has updated its consumer-facing AI use by launching summarized customer reviews generated via artificial intelligence, it announced in August. A month earlier, Newegg introduced an AI-based approach to housewares and home furnishing that organized shopping around a virtual home with rooms linked to product assortments. This summer, Wayfair introduced Decorify, which employs AI-enhanced technology to help consumers virtually remodel their home spaces before purchasing the products.

In those cases, the retailers are adding experiential elements that research has deemed important to Gen Zers. That points to an engagement trend, making functional elements more attractive to consumers who have grown up with video games and social media.

The gamification of shopping is an emerging, if not yet a thoroughly embraced, retail trend that also has ramifications for vendors working both with retailers and as part of the direct-to-consumer development. According to market research and advisory firm Mordor Intelligence, the gamification of retail has created a service market including players such as Microsoft and SAP, reaching $57.99 billion, which it suggests will grow slowly through 2028 to 58.7 billion in 2028. Although the compound annual growth rate is just .25%, as the market research and advisory firm sees it, artificial intelligence and machine learning are critical elements in gamification. Since the marketplace is only beginning to work through the opportunities those technologies offer, gamification could gain faster, particularly among consumers who grew up with video games. It also might help solve some of the navigational shortcomings of mobile device navigation and search originally adopted from algorithms developed for PCs.

Talon One, a promotion and loyalty software provider, pointed out that elements making shopping more of an experience through gaming and game-like features are already in use by a range of companies. For example, food delivery company Wolt includes a simple mini-game in its app: If Wolt users tap the app’s delivery timer, they receive a hidden game challenging them to tap as many times as they can within five seconds. If they beat the Wolt team’s score, they win a Wolt coupon.

It’s noteworthy that this approach has been gaining in physical retail environments. As long as four years ago, T.J. Maxx launched and awareness campaign featuring gamified pop-ups in six different locations in New York and Los Angeles. Each featured a selection of products curated by a group of six celebrities and influencers. Consumers could win the contents of each installation by correctly guessing the combined value of the products on display, posting their guesses under Instagram videos from T.J. Maxx or tagging them using the #maxximizing hashtag.

Ghost Retail, which works with companies on livestreaming, personal shopping and shoppable video, has pointed out that loyalty programs are among the areas where retailers explore basic forms of gamification, including point and badge systems, that reward consumers for specific behaviors. The company noted how Sephora awards customers points for their purchases, which can be redeemed for rewards like free products or exclusive experiences. The program incentivizes customers to make more purchases and creates a sense of exclusivity and community among Sephora’s loyal customers, the company stated.

Gen Z shoppers are known for being tech-savvy, social media-adept and highly competitive. They value experiences over possessions, and they also are more likely to make a purchase if they feel like they are getting a good deal. Any game offered should be easy to access, enjoyable in use and provide value to the Gen Z shopper, Ghost Retail said.

As the generation that grew up with the Internet and online shopping, Gen Zers aren’t shy about embracing new technological approaches to shopping.

According to recent consumer research by e-commerce technology company Rokt and the Harris Poll, 89% of Gen Zers globally think AI can improve online shopping. In the research, 55% of Gen Z respondents said they were interested in an AI assistant that would make online shopping more convenient by simplifying product discovery and anticipating their needs and preferences. Moreover, 51% of Gen Zers say they are interested in augmented reality and virtual reality shopping experiences. Walmart and West Elm have recognized that in its work with Roblox. Amazon has a Prime Video initiative linked to its superhero high school series with the evocative title “Gen V.”

Gen Zers identified the top five areas in which they expect AI will improve online shopping: help with comparing prices, cited by 47%; finding deals, at 45%;  receiving relevant offers and product suggestions, at 41%;  receiving personalized assistance, at 37%; and finding reviews at 28%.

Timing

A poll conducted at the beginning of this expanded holiday shopping season from e-commerce platform runner Shopify and Gallup identified consumers 18 to 29, mostly Gen Zers with a few younger Millennials included, as having the most robust spending intentions among generations studied and the greatest willingness to spend early for discounts.

Gen Z has grown up with the expansion of the holiday shopping season. Although Baby Boomers and even older consumers might still see shopping for Christmas in August as odd, Gen Zers see it as more natural.

In the survey, Gen Z consumers were most enthusiastic about holiday deals, saying they would probably or definitely start shopping back in the calendar if retailers rolled out seasonal deals and promotions before the traditional November to December shopping period. Shopify and Gallup called on retailers to make better use of earlier holiday deals specifically to cater to younger consumers. In the survey, 48% of the 18-to-29-year-olds said they could be attracted to earlier holiday discounts, well over the 28% average across all age groups. Shopify and Gallup affirmed younger consumers are ready to shop, with 37% saying they would spend more this year, almost double the average sentiment among all groups polled.

The Knot 2022 Real Weddings Study revealed 2022 saw 2.6 million couples getting married; Gen Zers want unique elements added to their nuptials; and those planning to get hitched in 2023 are concerned about how the economy might affect their planning.

The Knot surveyed 12,000 couples married in 2022 to provide a comprehensive look at how weddings unfolded as well as emerging trends among Gen Zers getting hitched.

Although new wedding elements are appearing, tradition remains strong as regards trends:

• 91% of receptions featured first dance
• 90% of couples included at least one that wore white
• 84% of engaged couples set up a wedding registry
• 83% of wedding days ran as ceremony, cocktail hour, reception
• 80% of receptions slated a father-daughter and/or mother-son dance
• 78% of nuptials were preceded by a rehearsal dinner
• 76% of couples had one person changing their last name to their partner’s
• 74% of receptions had a cake-cutting ceremony
• 70% of weddings worked in something old, new, borrowed and blue
• 68% of couples established specific table assignments for guests

In what The Knot referred to as a return to normalcy, only 7% of respondents to The Knot’s survey said the COVID-19 pandemic impacted their wedding dates, down from 27% in 2021. Although 25%of those surveyed continued to offer hand sanitizer to guests, highest among couples married in early 2022 at 39%, other health and safety measures dropped significantly.

Average guest size in 2022 was 117 as compared to 105 in 2021, 66 in 2020 and 131 in 2019. Cost per guest was $256 in 2022 versus $266 in 2021, $244 in 2020 and $214 in 2019. Total cost of a ceremony and reception was $30,000 in 2022, versus 28,000 in 2021, $19,000 in 2020 and $28,000 in 2019.

The average engagement length in 2022 was 15 months, though 13% of couples were engaged two years or longer, which would get into the pandemic period. December was the top engagement month as 15% of couples opted to celebrate the milestone with their loved ones already gathering for the holidays.

With personally crafted proposals popular, 58% of survey respondents said they felt pressure to plan a unique proposal, and roughly half planned their proposal one to three months in advance compared to 31% in 2017.

Couples’ top challenges during the wedding planning process include budgeting, at 47%, and determining the guest list, at 36%. On average, couples themselves paid for 49% of the wedding costs, though older Gen X adults, at 81%, and those identifying as LGBTQ+, at 56%, shoulder a greater proportion of costs. Couples are most likely to pay for their portion by tapping into their checking account, at 57%, or paying cash along the way, at 54%, through credit cards, at 39%, and money gifted via wedding gifts/registry, at 28%.  Couples turn to various resources to plan, especially friends/family, at 73%, and wedding planning websites, also at 73%. Then 68% tap Pinterest, most often for inspiration, and 29% hire a wedding planner.

The internet is playing a bigger role in nuptials planning, as 90% of couples created a wedding website to share with guests; 77% followed wedding vendors on social media; 64% used a wedding planning app; 52% video chatted with wedding guests; 45% watched online videos for wedding planning ideas and inspirations; 32% used online chats with vendors or others as they planned; and 13% took a virtual tour of wedding venues.

As for Gen Zers, they’re more likely to have their engagements photographed than other demographics, at 89%, versus 79% for Millennials. Gen Zers rate photos and videos as the most important part of the wedding day, 83% versus 76% of Millennials. Gen Z couples also welcome opportunities to incorporate cultural elements, with about 40% of such couples including ethnic, religious and/or cultural elements into their wedding, such as jumping the broom, compared to 32% of Millennials do the same. Gen Zers are incorporating vibrant and unconventional colors into their weddings, with green especially popular with 56% saying the color was an element in their nuptials decor. 

As for 2023, based on research conducted in January, the Knot maintained that 61% of couples who are set to wed this year say the economy has already impacted their wedding planning. Some 49% specifically cite inflation/rising costs as a top concern.

Numerator research conducted early in July indicates consumer demand, softening somewhat under the influence of inflation, is driving more business to warehouse clubs and dollar stores.

In-store spending at clubs and dollar stores is up 15% and 14%, respectively. Across all income levels, more households are shopping club stores, with traffic up 9% year over year. Dollar stores are seeing high-income shoppers switching to save money, Numerator indicated. Dollar store traffic is up 4%  and spending is up 9% year over year, with high-income shoppers generating the largest increase in spending, up 33%.

Numerator pointed out that financial optimism dipped in early July with only 47.4% of consumers rating their financial situation as good or very good, down from 56.2% of consumers at the same time in 2021. In July 2022 research, 23.6% of consumers claimed they did not have spare cash, a trend driven by rural, Gen Z and low-income households, according to Numerator.

Discretionary dollars are still available as 27% of consumers said they would use extra funds for vacations and travel, a trend driven by high-income, Gen X and rural households.

Unlike early 2022, when price increases disproportionately impacted lower-income, Gen Z and African-American households, inflation rates converged across all demographic groups by the beginning of July and are now similar, according to Numerator.

The summer’s major retail events, including Amazon’s Prime Day, are on the way, An Adobe Commerce study reveals many consumers, concerned about issues such as inflation, are less willing to spend money on discretionary items during the summer sales as they prioritize purchases of necessity. However, many consumers, especially younger shoppers, are excited about the summer bargains, the study indicated.

The Adobe research revealed that 61% of consumers are looking forward to summer sales including Prime Day. However, that enthusiasm is greater among younger consumers. The most excited for the summer sales events are Gen Zers, with 85% reporting themselves anxiously awaiting the sales. The enthusiasm diminishes with age, as 79% of Millenials, 64% of Gen Xers and 38% of Baby Boomers described themselves as excited about the bargains.

Of those planning to participate in Prime Day and other summer sales events, such as Target Deal Days, 76% said they would spend more or the same amount as last year. As for motivation, 56% of consumers said they save money by shopping on Prime Day, while 32% want to get ahead of their seasonal holiday and 23% are in back-to-school mode.

When it comes to merchandise categories, Home Goods/Home improvement was the second most popular segment, with 29% of event shoppers planning a purchase. That’s behind Apparel, at 43%, but ahead of Health & Beauty, at 26%, Computer/Electronics, at 22%, Pet Products, at 17%, and Toys, at 16%.

Despite widespread reports that retailers such as Target are overstocked, 64% of consumers believe discounts will be smaller this summer than last.

Almost 24% of consumers surveyed said they wouldn’t shop on Prime Day because they have less discretionary money to spend because of higher prices. Others will not participate this year because they are worried about the economy and its impact on their financial situation, at 21%; shifting spend to necessities, at 20%; and putting extra money into their savings, at 15%.

Although shoppers have returned to physical stores, Adobe noted consumer spending digitally continues to see a modest increase with consumers spending $78.8 billion online in May, more than $1 billion over the prior month. Gen Z and Millenials shoppers are relatively eager online shoppers, with 50% and 49%, respectively, saying they do most of their shopping online. The number falls off thereafter, with Gen X at 35%.

After dealing with the changing fortunes experienced the past two-plus years, including recent supply chain woes, 57% of consumers said they searched for and bought products online when they couldn’t find them in stores.

More than half of respondents, at 67%, said when shopping in-store or online, they would like to receive personalized promotions or offers based on their spending habits, with 61% also saying that receiving such promotions will make them more likely to make a purchase. Variation in likelihood to purchase based on generation exists, with Gen Z at 72%, Millennials at 78%, and Gen X at 66% saying they would welcome personalized offers. Among those who have received personalized recommendations, 72% said the prompts led them to purchase more goods than they originally planned.

Adobe indicated, a significant proportion of consumers want new, unique shopping experiences. As such, 37% of consumers surveyed are open to the idea of augmented reality experiences, 28% are interested in immersive and interactive shopping experiences such as shopping in the metaverse, and 26% already have participated in live-streaming shopping events. Enthusiasm for each follows in echelon in the Adobe study, with Gen Z leading and Millenials trailing followed by GenX.

Almost half of Millennials said they have used buy-now-pay-later purchasing, with Gen Z just a bit behind them. Just less than a third of GenXers have tried BNPL compared with 14% of Baby Boomers. Home Goods/Home Improvement is the third-best merchandise category for BNPL purchases, at 31%, with apparel at 44%, Computers/Electronics at 33%, Health  Beauty at 21% and sporting goods at 18%.

Then, 72% of consumers said they want online purchases delivered the same day or via two-day shipping. 

The COVID-19 pandemic is no longer a major reason to shop online for consumers in the United States, according to market research from Pitney Bowes Boxpoll.

In the research, 56% of participants said their motivation for buying online had changed since the pandemic peak.

The top reason to shop online in the study was that “shopping online saves me a trip to the store and I don’t mind waiting for delivery.” For all consumers, the answer was given by 43% of participants in the study. In regard to generations, Boomers, at 50%, were most likely to give that as a reason to shop online while, at 36%, Gen Zers were the least likely to do so.

“I can find better deals online than in-store” was the next most likely answer, at 36%, with Gen Zers and Gen Xers tied at 40% at the top and Boomers last at 32% in providing that answer. In the third position was the answer “I have a bigger product selection online,” at 29%, with 32% of Gen Xers so saying in the top slot and Gen Zers and Millennials, at 27%, tied for last.

“I am worried about being exposed to COVID in brick and mortar stores” was the seventh most cited reason for shopping online, as 15% of study participants answered that way, with 18% of Millennials emerging as the most likely and 7% of Gen Zers as the least likely to say so.

The number four, five and six reasons for shopping digitally were “searching for unique products only found online”, “more enjoyable” and “not liking to be around other people.” Eight and nine were “difficulty getting to a physical store” and “fear of physical safety in brick and mortar stores.”

Pitney Bowes asked participants to provide their top three reasons for shopping online at a retailer other than Amazon. HomePage News inquired about the Amazon exception but did not get an immediate response from Pitney Bowes.

In a holiday that will be closely watched as an economic gauge, market researcher Numerator stated that, while most consumers plan to celebrate Independence Day, the majority of celebrants expect at least a moderate inflation impact to spend less, purchase items on sale and focus cutbacks on dining out and fireworks.

Respondents to a Numerator survey reported that they intend to cut back on spending and travel and spending due to inflation with 39% planning to buy fewer items this 4th of July than in previous years and 27% traveling, as gas prices weighed especially among those who might otherwise hit the road.

The majority of consumers, 64%, will spend less than $100 this Independence Day although 28% plan to spend more than  $100, with Gen X having the biggest spending intention.

In addition:

• 62% of celebrants said they would purchase items on sale to save on their shopping.
• 37% plan to prepare more budget-friendly snacks and meals.
• 36% will use coupons.
• 26% will switch to private label/store brands.
• 25% will shop at dollar or discount stores. 
• 29% will cut back on dining out and fireworks.
• 25% will purchase less meat or seafood
• 24% will spend less on holiday decorations. 

Grilling remains the most planned activity, with 60% of consumers planning to grill, while 53% plan to gather with family and friends. Both activities lost celebrants as compared to last year, down five points and 12 points, respectively.

Consumers mostly plan to hit the bricks and mortar for Independence Day, at 88% with 68% expecting to shop in-store at a grocery store, 47% at a mass merchant or big box store, 32% at a club store.  

Among those intending digital purchases, younger generations prefer Costco.com and Target.com. Gen Z is more than twice as likely to shop at Costco.com, and Millennials are 33% more likely to shop at Target.com.

Generations plan to celebrate differently as Millennials are more likely to attend or host an Independence Day party, with an Index 112 versus the 100 index baseline for all consumers. Gen Xers are more likely to go out for food or drinks, index 113, and Boomers and other older consumers intend to gather with family and friends, index 109. 

Almost all celebrators, at 95%, plan to purchase something for the holiday, including snacks, at 60%, meat & seafood, at 56%, fruits & vegetables at 45%, and side dishes at 45%. 

In addition, 45% of celebrants plan to purchase alcoholic beverages with beer as the top choice across all age groups.

As retailers reach out to Generation Z, sustainability has been an important part of their strategy to address social concerns considered critical to their purchasing decisions. Gen Z, however, isn’t one-dimensional, so it’s important to think about members of the generation in broader terms.

Market research suggests Gen Z does make sustainable practices a major part of purchasing considerations, but the demographic cohort itself is at a crossroads, with its youngest members just approaching their teenage years and the oldest entering adulthood. As such, their understanding of social issues and ability to respond economically varies.

Sustainability is an important issue, but it is one retailers and their suppliers should recognize is interwoven with other issues, many traditionally recognized as key, such as price/value, and others, such as transparency, becoming more important. Businesses, in general, should also consider that sustainability may now be an even more important consideration among older consumers than is the case with Gen Zers. As things are evolving, retailers and suppliers may be well serviced by aligning their practices more closely with consumer priorities.

Market researcher First Insight and the Baker Retailing Center at the University of Pennsylvania’s Wharton School surveyed consumers across the United States about sustainable practices and their effects on shopping habits and purchase decisions. They also surveyed retail executives. The results demonstrated that sustainability has become a bigger topic of consideration across demographics, with Generation Z influencing other generations, sometimes to the extent that older consumers are sometimes more environmentally driven in their purchasing today.

For example, in a 2019 First Insight study, Gen Zers were most likely to say they were willing to spend more for sustainable products at 73%. Two years later, Gen Z had slipped marginally in its willingness, down two points. However, Millennial willingness had increased to 72% from 68%, and Gen X willingness had increased to 78% from 55%. First Insight credited much of the change in overall willingness, which overall gained from 58% to 68%, to Gen Z influencing their Gen X parents. The survey results indicated that Gen Z can prompt older generations in their purchasing decisions generally, First Insight noted.

The vast majority of Gen Z shoppers say sustainability is more important to purchasing decisions than brand names. Sustainability has become such a critical factor in purchasing decisions today that it also beats price in importance across all consumer generations, partially prompted by Gen Z, according to First Insight. Yet, the majority of respondents from Gen Z through Gen X continue to consider quality most important to a purchasing decision. Only Baby Boomers rank environmental concerns higher.

Still, the comparable figures have to be taken with a grain of salt, given that Gen Z is a group that goes from about 11 to 25 years of age. As such, its relationship to money and financial independence varies significantly. Among purchasing factors, Gen Z ranks pricing closest to sustainability in importance. But, when you’re a kid, the question isn’t always if you want to make a purchase, it’s often if you have enough money to consider it.

Marsha Everton, principal and founder of the Aimsights Group, pointed out that differences in purchase decisions based on environmental issues arise more from education and income level than generation. So, in those cases when concern about sustainability is fairly level across generations, which it often is in the First Insight survey, similarity in education levels might play a role in the results.

For her part, Everton said, it’s important to consider that data points don’t paint the whole picture when it comes to consumers and sustainability, especially when consumers are asked to evaluate future actions.

“We have learned to be very careful about intent versus actual purchases,” she said. “The table stakes of price, product and convenience are still the most influential decision-making factors. At higher income levels, the consumers have the luxury of including sustainability in the actual decision. At lower income levels, the decision-making can fall into the ‘intention gap.’”

Everton said price, product and convenience are critical to consumers, while sustainability, health and wellness, minimalism and a plant-forward diet are significant trends that now are influencing purchasing decisions.

She said work by the Institute for Sustainable Communities takes a larger view on consumer social concerns. The institute defines sustainable communities as those that manage human, natural and financial capital to meet current needs while ensuring the availability of adequate resources for future generations. From that perspective, it has focused on climate change, income inequality and social justice as elements that should be nurtured in a community to ensure its ongoing health. Consumers who have adopted that kind of thinking are more interested in a company’s purpose than sustainability as an isolated concern.

Younger consumers are more likely to ponder social concerns when they are purchasing, but they aren’t alone in this. The growing definition of wellness as it has been proliferating, one that ties personal, community and environmental health together, has been affecting various sectors across retail and, as a consequence, suppliers.

The chain drug sector is largely reconfiguring to address the growing number of consumers who have developed a broad sense of self-care that incorporates personal health but that extends through the community. The larger social trend takes into consideration local traditions and economic well-being, with the interest in purchasing from small neighborhood businesses and seeking out food and beverages that represent community traditions being significant to purchasing decisions.

It’s worth keeping in mind that the larger trends predate the pandemic. Still, Everton said the pandemic accelerated and magnified these trends including those that the Institute for Sustainable Communities identified.

Everton said research by Hidden Tribes suggests that interest in sustainability and other social trends is real but actions may lag. The research suggests most consumers belong to an “exhausted majority” that has been subject to upheaval and is trying to catch its breath a bit.  Representing 67% of consumers, the group rejects extremism and is ideologically more flexible and willing to compromise with others outside the cohort. The group still wants progress across a range of social issues and isn’t likely to base decisions on a single issue or core group of issues.

The observation could have dual consequences. The exhausted majority might not be ready to take a firm stand on social issues when purchasing. Yet, they are socially aware, even if they may take a reactive stance on issues, withdrawing support from companies that ignore their concerns rather than going out of the way to purchase from those that do.

Yet as they emerge from a trying period overshadowed by pandemic, divisive politics and troubling macroeconomic developments, the exhausted majority might become revitalized and more active in addressing social issues that trouble them, including climate change and the environment.

“Sustainability is important,” Everton said, “and it is also important to keep a balanced perspective on how consumers include it in their decision-making.”

Even how they regard sustainability in action can be complex. Many consumers focus on particular issues of which sustainability is part. According to a Nielsen State of the Industry report, 74% of Gen Zers consider transparency, a factor that touches on everything from product origins to ingredient information to packaging composition, as important. That figure is close to the Millennial consideration, at 79%, and higher than Gen X at 63% and Boomers at 70%.

Deloitte’s Striving for Balance, Advocating for Change study indicated that Gen Zers are worried about the state of the world and are fighting to reconcile a desire for change with the demands and constraints of everyday life, including financial circumstances, even as they try to make  environmentally sustainable choices. For example, 29% of Gen Zers selected cost of living, including factors such as housing, transport and bills, as their greatest concern. Yet, 90% of Gen Zers are making at least some effort to reduce their own impact on the environment and 64% of Gen Zers said they would pay more to purchase an environmentally sustainable product versus 36% who would choose a cheaper product that is not as sustainable.

Gen Zers have a lot on their minds, growing up with issues such as the cost of college education, international turmoil, work/life balance, cost of living and changing wage standards, in addition to climate change and related environmental issues. What’s more, they grew up amid the COVID-19 pandemic, with its influence on how people think about health. They also have varying ways to express their concerns economically, considering they include older children as well as younger adults. As a group, Gen Zers consider sustainability to be important, but how they act on environmental issues varies.

Retail Disconnect

In what might be considered an ironic twist, retailers that pay too much attention to the most politically active consumers may not realize that their efforts to address social concerns have gained some traction. As such, they may need to reevaluate their sustainability and ESG efforts, in general, to determine what’s working, why and how to build on existing strategies.

In its research, First Insight determined that a significant misalignment exists between retailer executives and consumer ideas around sustainability and shopping.

Indeed, even when it comes to relatively good news, retailers are out of sync with consumers. In the research, 100% of retailer executives surveyed said they didn’t believe they are transparent enough about sustainability efforts but 59% of consumers said they were. In a similar vein, 98% of retailer executives believe that consumers expect their companies and related brands to be sustainable compared to 76% of consumers.

Retail executives underestimated the specific factors consumers gave for preferring sustainable brands. Consumers were significantly more likely than retailers to cite reduction of production waste, 23% versus 9%, reducing carbon footprint, 22% versus 11%, animal welfare, 17% versus 8% and improving the environment at 29% versus 17%, as important. The only factor retailers thought was more important than consumers was social signaling at 7% of consumers but 16% of retailers. Although both cite it as important, quality/value is of somewhat lesser importance to consumers, at 85%, than retail executives, at 99%.

In an interesting twist, when it comes to why consumers buy sustainable brands, 29% cite inherent quality, with only 8% of retailers coming to that conclusion. Then, 25% of consumers cite value as a reason to purchase sustainable brands, with just 6% of retailers making that association. In terms of pricing, craftsmanship and durability, consumers are out ahead of retailers by 16% to 6%, 13% to 4% and 12% to 1%. Retailers are more likely to associate environmental concerns than consumers 30% to 26% and personal values, 44% to 19%. The results suggest that, when it comes to sustainability, retailers and consumers have quite different viewpoints on the subject, something worth considering when addressing shoppers.

Although what consumers cite as important and how they make a final purchase determination is hardly in lockstep, 72% of consumers polled told First Insight that sustainability is very or somewhat important when they are considering a purchase. In addition, 68% of consumers say they will pay more for sustainable products while only 34% of retail executives believe that.

So, purchasing decisions, even among consumers who are the most concerned about environmental issues, still are complex when applied to purchasing. Gen Z is helping drive sustainability, even among other demographic cohorts, as a purchasing issue, but it isn’t looking at it in isolation. As they emerge into adulthood, Gen Z will become a greater economic force and an even greater influence on the marketplace, but how they align their values and their purchasing is likely to be complex. Because of that, retailers and their suppliers could be well served by detailed research that can translate into effective outreach and product development. Many businesses have taken a sincere approach to sustainability, in part to get ahead in attracting Gen Z consumers. Too narrow an approach to them, however, might not work as well as hoped.

Then, the issue of influence is one that’s worth evaluating. First Insight concluded from its research that Gen X,  a demographic cohort that is in its prime earnings years, has been influenced by Gen Z and has demonstrated more willingness to spend based on eco-friendliness. As it turns out, Gen X now is the one most likely to say it expects brands to become more sustainable, at 84% versus 78% of Millennials and 73% of Boomers and Gen Zers.