Future of Consumption: Unlocking Gen Z

Behaviour for Crafting Powerful Strategies

March 2024

© Euromonitor
© Euromonitor International
International 2024.
2024. All rights
All rights reserved.
reserved.
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Contents

Introduction

Polarised behaviours of Gen Z

Top five values to bridge the behaviour gap

▪ Empowerment

▪ Self-expression

▪ Belonging

▪ Rationality

▪ Retreat

Strategies to leverage the key values

Conclusion
© Euromonitor International
 Introduction

© Euromonitor International
 INTRODUCTION 55

Key findings
Numerosity and consumer Gen Z, constituting a fifth of the global population, foresees more than a twofold income surge
income growth potential by 2040, cementing their high influence as future consumers. Understanding Gen Z's market
outlines Gen Z as the potential complexities requires a holistic approach beyond demographics and consumer income
powerful future consumers analysis.
Gen Z consumers exhibit apparent behavioural polarisation. While endorsing social and
Contrary behaviours make environmental responsibility, they hesitate to pay a premium for these values. Tech engagement
it difficult to reach and mirrors enthusiasm but so do privacy and mental health concerns. Despite financial caution,
target Gen Z Gen Z tends to splurge on small indulgencies. Deciphering Gen Z’s motives necessitates
identifying the key values driving their actions.
Gen Z’s key values help Gen Z’s contrary behaviours can be bridged by including the key values in the strategies.
brands navigate their Empowerment helps with the value-action gap in environmental and social responsibility.
dichotomous behaviours Creativity, belonging and willingness to unplug or retreat are influential in bridging the mistrust
in tech and cautious spending. When used together, these values can win Gen Z over.
Hyper-personalised loyalty, Utilising hyper-personalised loyalty programmes, implementing micro-segmentation based on
spending research and consumer spending analysis, and fostering emotional connections are pivotal strategies in
emotional connection can tapping into Gen Z behaviours. However, the values hold the utmost significance for this
help to engage better demographic and all strategies should be developed around them.
To optimise marketing strategies for Gen Z, businesses should prioritise video-centric social
Gen Z marketing is about
media platforms such as TikTok, known for user-generated content and creativity. Higher reach
co-creation and
yet can be achieved by addressing Gen Z on communication apps such as WhatsApp and
communication
Discord, which are valued for fostering like-minded communities and connections.
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 INTRODUCTION 66

Generation Z’s influence to grow exponentially by 2040

23.2%
Of global consumers in 2023 were Gen
Z, individuals born between 1995 and
2009

USD4.4 tn
global consumer expenditure of
Generation Z in 2023

With about one fifth of the global population and forecast rapid future income growth, Generation Z is
becoming more influential as consumers. Nevertheless, understanding and targeting this cohort is
135%
real growth in Average Gross Income of
challenging due to its polarised behaviours.
Gen Z over 2023-2040
© Euromonitor International
 INTRODUCTION 77

Gen Z Market Potential Explorer: Demographics are not enough

Gen Z’s share size in the total population Gen Z Market Potential Explorer: Index Pillars and Weights
positions it as a focal consumer segment. Yet,
relying solely on demographics fails to capture
the complete picture. Countries that
accommodate large Gen Z populations often
show small spending power of youth. And vice
versa - those with high purchasing power often
have significantly older populations.
Despite accommodating 41.5% of the Gen Z
population in 2023, India, China, Pakistan and
Consumer Demographics Education and Digitalisation Inequality
Indonesia, the most populous countries by Gen Income and (weight 30%) Unemployment (weight 10%) (weight 5%)
Z populations, contributed only 17% to global Expenditure (weight 15%)
Gen Z spending. Meanwhile, the budget of (weight 40%)
North American Gen Zs (4% of the total Gen Z
population, 33% of Gen Z spending) was bigger Measures Measures the
Measures the Measures Measures
higher size gap
than the cumulative Gen Z expenditure in Asia Gen Z budgets cohort’s size overall digital
education between the
and the real and share in penetration.
Pacific and the Middle East and Africa (79.5% income attainment and highest and
total lowest
of the population and 32% of the spending). growth population. youth
unemployment. earning
forecasts for
This proves that identifying optimal countries individuals in
2023-2040.
the cohort.
for Gen Z potential needs a comprehensive
assessment of multiple metrics.
© Euromonitor International
 INTRODUCTION 88

Unveiling optimal geographies: The US stands out for overall potential

Demographics and consumer budgets primarily shape the consumption Gen Z Market Potential Explorer Index 2023
potential, but factors such as employment, education and inequality Score, out of 100
are also important. A high level of higher education attainment, for USA
example, positively impacts Gen Z’s income, while factors such as high Canada
youth unemployment, as seen in Spain (28.2% youth unemployed in Australia
2023), limit their potential for professional development and,
New Zealand
consequently, income growth.
Israel
Internet access, digitisation and e-commerce growth also play an United Kingdom
important role in assessing Gen Z’s consumption potential. High digital
France
penetration enhances Gen Z accessibility, information awareness and
discretionary spending. For example, despite Bangladesh having the Ireland

seventh largest Gen Z population and high future income growth, its Hong Kong, China
low internet access (36% of the total population) poses challenges in Saudi Arabia
effectively reaching and targeting this cohort. Denmark

The Gen Z Market Potential Explorer Index identified North America Mexico
and Australasia as the most promising regions for Gen Z-focused Iraq
companies. The US stands out, accommodating the fifth largest Gen Z Netherlands
demographic globally and the second highest youth income levels
Finland
(after Switzerland). Despite a modest 57% growth in budgets by 2040,
US Gen Z will exhibit the highest absolute spending increase and 0 10 20 30 40 50 60 70 80 90 100

outperform the global average. Source: Euromonitor International from national statistics
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 INTRODUCTION 99

Yet, the struggle with Gen Z is their behaviour

Selecting target geographies marks the initial phase for developing a
consumer-led strategy. Yet psychographic research is no less pivotal for
comprehending and engaging with Generation Z.
Behavioural insights facilitate precise targeting and consider influential
factors, such as distinctive values and complex behaviours.
This report identifies three areas exhibiting notable disparities in Gen Z
behaviours and provides key values for bridging them:
▪ Social Action: Gen Z is actively involved in social and environmental
causes. Despite their ideals, they hesitate to translate their beliefs Social Action Technology
into financial actions. The key question: How can companies
encourage Gen Z to turn their vocal support into a financial one?
▪ Technology: Gen Z relies heavily on technology yet demonstrates a
keen awareness of adverse tech effects on health and data privacy.
The key question: How can companies make Gen Z feel secure and
build their loyalty online?
▪ Spending: The low incomes and increasing living costs are prompting Spending
Gen Z to adopt a more cautious and conscious approach to
spending. But this generation also tends to splurge on products that
bring them joy. The key question: How can companies tap into
splurging and win over thrifty spenders?
© Euromonitor International
 Polarised behaviours of Gen Z

© Euromonitor International
 POLARISED BEHAVIOURS OF GEN Z 11
11

Generation Z considers sustainability and social responsibility intrinsic

Gen Z demonstrates strong support for social and Willingness to Pay More for Sustainable Claims in Food and Drinks by Generation 2023
environmental responsibility; however, they hesitate to % of respondents in the generation
pay a premium for these values. As per Euromonitor’s Generation Z

100% ORGANIC
2023 Voice of the Consumer: Sustainability Survey, Millennials
despite Gen Z's concern about climate change (54.7% of Generation X
the cohort's respondents), most Gen Z consumers were Baby Boomers
reluctant to pay extra for products with sustainable
Generation Z
attributes such as “Sustainably produced or raised”,

ALL NATURAL
Millennials
“100% organic” or “Environmentally conscious or eco-
friendly”. Generation X
Baby Boomers
Part of the hesitation came from the growing pragmatism

SUSTAINABLY ENVIRONMENTALL
PRODUCED OR Y CONSCIOUS OR
and budget-consciousness, driven by prevailing economic Generation Z

ECO-FRIENDLY
uncertainty and limited income. With an average gross Millennials
income barely surpassing USD10,000, Gen Z remained Generation X
the lowest earning cohort in 2023 and often chose Baby Boomers
products and services based on price. Generation Z
Nevertheless, the continuously decreasing willingness to
RAISED
Millennials
pay more for sustainable attributes also suggested a shift Generation X
in consumer expectations. Gen Zs increasingly expect
Baby Boomers
sustainability and social responsibility to be intrinsic to
the brand and are less inclined to pay extra for seemingly 0% 5% 10% 15% 20% 25% 30%
basic features. Source: Euromonitor Voice of the Consumer: Sustainability Survey, fielded Jan-Feb 2023 (n=40,691)
© Euromonitor International
 POLARISED BEHAVIOURS OF GEN Z 12
12

Overcoming the value-action gap is important for companies

About one in three companies recognised
Value-Action Gap
sustainability and social responsibility as
priorities for their business in the next five years.
This makes addressing Gen Z’s value-action gap
Individual input
critical, requiring proactive efforts. Responsibility for
Practicality or or
Concern -> community or -> Behaviour
Rationality Empowerment
Treating sustainability as a long-term strategic of an individual
Belonging
investment is one way to look at closing the
value-action gap. It involves viewing
environmental and social investments as
strategic costs and spreading them over time. By Source: Euromonitor International adapted from Kollmuss, A. and Agyeman, J., 2002
absorbing costs over the long run, companies
communicate a strong commitment to Top Three Priorities for Companies in the Next Five years 2023
responsibility, enhancing their appeal to Gen Z as % of total respondents
trustworthy and purpose-orientated partners. Digital transformation

Improve sustainability and social impact

Empowering individuals and highlighting
belonging to the community are key to bridging Increase profitability
Gen Z's say-do gap from a consumer values Increase revenue
perspective. Slightly contradictory, these
Increase market share
strategies align well with Gen Z's individualistic
yet community-focused identity and the strive to 0 5 10 15 20 25 30 35
contribute to the greater good. Source: Euromonitor Voice of the Industry: Lifestyles and Innovation Survey, fielded March-April 2023 (n=182)
© Euromonitor International
 POLARISED BEHAVIOURS OF GEN Z 13
13

“It’s complicated” status with technology

Gen Z's relationship with technology is marked by familiarity Gen Z Attitudes and Perceptions about Privacy and Security 2023
and concern. On the one hand, Gen Zers are digital natives, % of Gen Z respondents
and their experiences have been framed by the presence and I believe companies I interact with should
increasing penetration of digital services and infrastructure manage my data responsibly
more than any other cohort. I believe companies should not be able to sell my
personal data to a third party
At the same time, there is an evident scepticism towards
I am concerned about amount of personal
technology for its negative impact on Gen Zers’ social and information companies know about me
emotional wellbeing. According to Euromonitor’s Voice of
I feel that companies should be more transparent
the Consumer: Lifestyles Survey in 2023, only 53.1% of Gen Z in terms of how data is sold
respondents stated they would be lost without internet
I would like to exercise control over how
access (down from 57.5% in 2022), while 35.3% said that companies leverage personal data
using the internet contributed significantly to their daily
I believe companies should collect data
stress levels and 39.6% of Gen Z took actions to reduce that anonymously (do not link to an individual)
stress. I feel that companies should provide more value
in exchange for my data
Corporate transparency and cooperation are crucial to
engage the discerning Gen Z mindset regarding tech. I believe companies I interact with should
manage my dependent’s data responsibly
Pragmatic in their approach, Gen Z views their data as an
asset. Thus, personalised experiences or sharing information I feel in control of my personal information
is an expected exchange. Cultivating self-expression through
creativity and encouraging belonging are key elements in 0% 10% 20% 30% 40% 50%
building Gen Z's trust in tech too. Source: Euromonitor Voice of the Consumer: Digital Consumer Survey, fielded Mar-Apr 2023 (n=40,691)
© Euromonitor International
 POLARISED BEHAVIOURS OF GEN Z 14
14

Netflix gives back viewers’ data to increase transparency and show where the data is used
Characteristic
▪ In December 2023, Netflix pledged to biannually
release the What We Watched: A Netflix
Engagement Report. Based on proprietary data, this
report captures 99% of Netflix viewing and provides
valuable insights into audience preferences and
74.2%
Of Generation Z
resonant content. watched TV shows
or movies in 2023
Context
▪ Netflix, the leading streaming service, boasts nearly
250 million subscribers, surpassing its closest
competitor, Disney Plus, with 150 million. The
68.6%
Of Gen Z streamed
disclosure of almost 100 billion viewing hours and video at least
weekly in 2023
top titles in the Engagement Report reveals
profound insights into the industry.
Consequence 40.3%
▪ The comprehensive release of viewership data Of Gen Z shared
serves multiple purposes. It effectively counters their data to
receive targeted or
Image source: Netflix.com
critics' opinions, substantiates show cancellations personalised
or renewals through hard viewer-supplied data, and offers/deals
is a unique element contributing to the company's Source: Euromonitor Voice of the Consumer: Lifestyles
ongoing strive towards higher transparency. survey, fielded Jan-Feb 2023 (n=40,691)
© Euromonitor International
 POLARISED BEHAVIOURS OF GEN Z 15
15

Saving in a squeeze, splurging for joy

Gen Z's spending behaviour presents another Current Financial Situation by Generation 2023
dichotomy. Their limited disposable income, % of respondents
40
exacerbated by inflation and global economic
30
challenges, leads to cautious spending. According to
Euromonitor’s Voice of the Consumer: Lifestyles Survey 20

in 2023, Gen Z was the most financially distressed 10

generation, with only 28.5% of the respondents 0
I am comfortable I have enough money I rely on financial support I rely on government
comfortable with their current financial situation. with my current readily available to cover from friends or family financial support or
Meanwhile, Gen Zers were also inclined to splurge on financial situation an unexpected subsidies
“living in the moment”. They want to be distracted by emergency
Baby Boomers Generation X Millennials Generation Z
products and services that are novel and enjoyable.
With the megatrend “Experience More”, all consumers Generation Z Future Spending Habits 2023
strive to spend more on experiences than goods. This % of Gen Z respondents
is particularly true for young generations, such as Gen Saving money
Z. As per Euromonitor’s Voice of the Consumer: Spending on health and wellness
Spending on travel/holidays
Lifestyles Survey in 2023, 56.6% of Gen Z felt it is
Spending on new technology
important to spend on experiences, and 30.6% Spending on novel experiences
planned to spend more on novel experiences. Visits to restaurants
By identifying areas where Gen Zs are looking to spend Visits to the cinema, concerts, or theatre
and providing advice on how they can smartly budget 0% 20% 40% 60% 80% 100%
and optimise their savings, companies can gain traction Increase Stay the same Decrease
and align with Generation Z on both fronts. Source: Euromonitor Voice of the Consumer: Lifestyles survey, fielded Jan-Feb 2023 (n=40,691)
© Euromonitor International
 POLARISED BEHAVIOURS OF GEN Z 16
16

Financial advice from Apple Savings, Samsung Money and UOB TMRW’s Auto-Save
Hashtag #FinTok, representing the financial Savings in Apple Wallet Samsung Money powered UOB TMRW Auto-Save
TikTok community, has yielded more than 4.7 by SoFi Securities powered by Personetics
billion views on financial education, money-
saving and money-making tips. While
“finfluencers” often lack credibility and
disclosures, brands help young consumers in
their financial journeys.
▪ Apple’s deposit launch attracted USD1 billion
worth of deposits in the first week due to the
annual interest rate 10 times higher than the
national average in the US.
▪ Launched in the US, Samsung Money is a
high-yield cash management account. With
options of individual or joint accounts, it also
offers features such as setting financial goals,
spending categorisation and tracking.
▪ UOB’s Auto-Save feature uses AI analysis of
individuals’ income and monthly expenses, to
auto-transfer a safe amount to earn higher
interest rates than commercial banks’ offer.
Image sources: Company websites
© Euromonitor International
 Top five values to bridge the behaviour gap

© Euromonitor International
 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 18
18

Top five values to tackle polarised Gen Z behaviours

Empowerment Self-expression Belonging Rationality Retreat

Instilling belief in the Self-expression and Gen Z, often seen as Gen Z's inclination to Letting go in any form -
ability to drive societal creativity are the loneliest “live in the moment” disconnecting from the
change is key to important components generation, seeks surfaces through digital realm,
closing the value- of Gen Z's identity and inclusion and simple indulgences - embracing surrealistic
action gap, especially are increasingly linked connection through small delights that experiences or diving
among Gen Z to their consumption new social media and bring genuine joy. into an alternative
consumers, most of patterns. online communities, Importantly, these
gaming universe - is
whom want to countering the belief pleasures need not be
important for burnt
contribute to a that technology expensive to satisfy
and anxious Gen Zers.
positive change. divides rather than the rational side of the
unites. cohort.

53.6% of Gen Z 45.5% of Gen Z 47.0% of Gen Z 30.5% of Gen Z 42.0% of Gen Z
feel they can want to engage say that being regularly buy take part in
make a difference with brands to active in the themselves video gaming
through their influence community is small treats every week
choices and product important to
actions innovation them

© Euromonitor International
 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 19
19

Empowerment: A means to bridge the value-action gap

To bridge the value-action gap, it is crucial for Gen Z to feel Number of Baby Boomers and Gen Z in the Biggest Economies
acknowledged, understand that their choices and actions make a Having Elections in 2024
difference, and recognise their role in shaping their future. Yet, as Million
per Euromonitor’s 2023 Voice of the Consumer: Lifestyles Survey, 100
despite one in two Gen Zs believing in their ability to effect change, 90
only 35.0% voted in elections, 28.9% supported socially and
80
politically aligned brands, and even fewer donated to relevant non-
profits and charities. 70

60
However, there is a behavioural shift. Since 2020, Gen Zers have
increasingly been boycotting brands misaligned with their beliefs, 50
advocating for sustainability and inclusion, and more actively 40
engaging with local government representatives. In 2024 - the
30
biggest global election year in history - the first-time voters, Gen Z,
are expected to surpass Baby Boomers, who have made up the 20
majority of voters for decades. Thus, Gen Z’s influence is set to 10
expand further. If they feel empowered enough to get out to vote. 0
Brands such as Nike and IKEA, through campaigns such as “You can't
stop our voice”, “Move to Zero” and “People and Planet Positive”,
demonstrate effective strategies in empowering Gen Z. Instead of
imposing a sense of responsibility, they raise awareness, make Baby Boomers Generation Z
young consumers be heard and drive meaningful change. Source: Euromonitor International from national statistics; The Economist
© Euromonitor International
 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 20
20

Empowerment: Snapchat promotes civic engagement with “Run for Office Mini” tool
Characteristic
▪ In 2021, Snapchat launched “Run for Office Mini”,
encouraging its users to consider political
candidacy. The in-app tool allowed users to
explore issues, access political information via ZIP 53.8 mn
codes, and connect with organisations such as Of Gen Z in 2024
Run for Something and LGBTQ Victory Institute. will be eligible
voters in the US
Context
▪ Snapchat is consistently contributing to the
promotion of civic engagement in the US. With 78.8%
the previous app, in 2020, Snapchat states to Of Gen Z globally
trusted in their
have facilitated 1.24 million voter registrations,
social media
doubling its 2018 midterms efforts. Notably, 56% network in 2024
of registered users were first-time voters.
Consequence 116 mn
▪ With a 90% reach among 13-24 year-olds in the Users were
registered on
US, Snapchat targets many first-time voters.
Snapchat in the US
Empowering Gen Z can transform the company's in 2023
image from a pure entertainment app to a
Image source: Snap responsible and purpose-driven partner. Source: Passport Population 2023ed, Euromonitor Voice
of the Consumer: Lifestyles Survey, fielded Jan-Feb 2023
© Euromonitor International
 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 21
21

Empowerment: PepsiCo Arab Youth Hackathon at COP28 inspires future leaders

Characteristic
▪ The Arab Youth Hackathon, led by PepsiCo during
COP28, is a regional initiative engaging young
innovators for sustainable solutions. It consists of
three-day hackathons in Egypt, the UAE, Jordan, USD60,000
Lebanon and Saudi Arabia and is one of the main Prize fund for three
winning teams of
sustainability-themed competitions in the region. Arab Youth
Context Hackathon of
COP28
▪ Global food and beverage company PepsiCo is
actively involved in philanthropy and community 32.3%
Market share of
engagement through its foundations and CSR
Pepsi-Cola in soft
initiatives. These efforts contribute to social drinks in Egypt in
causes, community development and 2023
sustainability.
Image source: https://arabyouthhackathon.com/
Consequence 22%
Of Gen Z buy
▪ Businesses enhance their reputations as catalysts products and
and enablers by aligning with Gen Zers’ services from
environmental concerns and their desire for purpose-driven
empowerment. A brand helping youth to show brands/ companies

their values is more powerful than one that Source: Euromonitor Voice of the Consumer: Lifestyles Survey, fielded
executes those same actions on its own. Jan-Feb 2023 (n=40,691); Passport Soft Drinks edition 2023
© Euromonitor International
 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 22
22

Self-expression: How creativity bridges differing Gen Z’s tech attitudes

Besides empowerment, another value that attracts Gen Z’s interest Share of Global Consumers Who Report Using TikTok/Douyin at
is self-expression through creativity. The remarkable growth of the Least Monthly 2023
user-generated social media platform TikTok amid the decline of % of digital consumers by generation
other social media platforms is proof. In 2023, 66% of Gen Z
reported using TikTok, up from 37% in 2020, making it the third
Generation Z
most popular social platform for Gen Zers.
TikTok’s emphasis on self-expression resonates with Gen Z's
curiosity and desire for distinctiveness. As per Euromonitor’s Voice
of the Consumer: Lifestyles Survey in 2023, 45.2% of Gen Z Millennials
respondents said they liked to be distinct from others. As a result,
despite ongoing privacy controversies, TikTok sustains a
commendable level of trust among Gen Z, establishing itself as one
of the foremost platforms for advertising. Generation X

Gen Z is also very much inclined to co-creation practices. According

to Euromonitor’s Voice of the Consumer: Lifestyles Survey, 45.5% of
Gen Z in 2023 wanted to engage with brands to influence product
Baby Boomers
innovation, with such preferences growing year on year. Co-
creation, involving consumers in product development and strategic
planning, proves mutually advantageous, aiding companies in 0% 10% 20% 30% 40% 50% 60% 70%
averting new product mishaps, anticipating future trends, adapting Source: Euromonitor Voice of the Consumer: Digital Consumer Survey, fielded Mar-Apr
to change and securing innovation advantages. 2023 (n=20,079)
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 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 23
23

Self-expression: Samsung’s Future Generation Lab partners with African creatives

Characteristic
▪ In 2023, Hypebeast Africa, in collaboration with
Samsung, introduced Culture Scouts, offering a
unique opportunity for young African creatives.
Utilising Samsung Galaxy devices, the campaign 27.8%
aligns with Samsung's mission to connect Of population on
the African
innovative creativity globally. continent is Gen Z
Context
▪ The Future Generation Lab is Samsung's global
initiative to connect Samsung to Gen Z and future
24.2%
Samsung’s share in
generations. This initiative aims to engage in a way the Middle Eastern
and African
that brings about the ideation of locally relevant
consumer
marketing campaigns, products, services and electronics market
experiences. 61.5%
Consequence Of Gen Z in the
Image source: Samsung.com Middle East and
▪ Culture Scouts winners craft exclusive content for Africa want to
Hypebeast Africa, promoting impactful storytelling engage with brands
in local communities. The call-out on Hypebeast to influence product
innovation
Africa's Instagram for South African creatives drew
Source: Passport Population 2023ed, Consumer Electronics
over 1,000 entries, while Samsung was highlighted
and Appliances 2023d, Euromonitor Voice of the Consumer:
as the innovation and creativity promoter. Lifestyles Survey, fielded Jan-Feb 2023 (n=40,691)
© Euromonitor International
 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 24
24

Belonging: Gen Z finds connection on communication platforms

The prevailing global challenge of loneliness within Generation Z is Developed Markets: Being Active in the Community is Important to
influenced by economic uncertainties, evolving societal dynamics Gen Z 2023
% of respondents in generation
and diminishing trust in technology. This dynamic compels an
increased pursuit of connection, leading to heightened engagement Taiwan
within communities that share common interests and values. As per
Spain
Euromonitor’s Voice of the Consumer: Lifestyles Survey in 2023,
21.4% of Gen Z admitted attending community meetings, while South Korea
48.5% planned to be more engaged in their communities in the
future. Being active in the community was perceived especially Netherlands
important in developed countries such as Australia, Canada, and the Japan
biggest EU nations - Germany, France, Italy and Spain.
Italy
Catering to connection and belonging navigates all three polarised
behaviours of Gen Z, but first and foremost, increases trust in Germany
certain tech. As major social media platforms shift towards e-
commerce and become massive and commercialised, Gen Zers France
actively explore alternative channels for meaningful social
Canada
engagement. Hence, uncensored communication platforms, such as
WhatsApp, WeChat, Discord, Mumble, Element or Telegram, gain Australia
popularity. As per Euromonitor’s Voice of the Consumer: Digital 0% 35% 70%
Consumer Survey in 2023, WhatsApp, for example, grew its Gen Z Generation Z Generation Y Generation X Baby Boomers
customer share from 57% to 61% over 2020-2023.
Source: Euromonitor Voice of the Consumer: Lifestyles Survey, fielded Jan-Feb 2023 (n=40,691)
© Euromonitor International
 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 25
25

Belonging: Xianyu is more than a second-hand platform, it is a community

Characteristic Future Spending Habits: Purchase of
▪ Introduced by the e-commerce giant Alibaba in second-hand or previously owned
2014, Xianyu is the China’s largest second-hand products in China 2019/2021/2023
% of digital consumers
trading app. With more than 500 million
35%
monthly active users, focusing on Gen Z, it
accommodates a like-minded community of
30%
sustainability lovers seeking affordability.
Context
25%
▪ On Xianyu’s social feed, users showcase
collections of everything from miniature models
20%
to vintage clothing. The platform serves as a
marketplace and a forum for users to engage
15%
with one another through interest-based
communities.
10%
Consequence
▪ Community-based Xianyu is anticipated to
5%
continue developing in the country, partly due
to its technological advancement, alongside
0%
Alibaba’s leadership. In addition, consumers in 2019 2021 2023
Image source: Alibaba Group China intend to boost spending on second-hand
Source: Euromonitor Voice of the Consumer: Lifestyles
products more than the average. Survey, fielded Jan-Feb 2023 (n=40,691)
© Euromonitor International
 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 26
26

Belonging: Starbucks cultivates connection through the Discord community

Characteristic
▪ In 2022, Starbucks launched a Starbucks Odyssey
in the US, a free-to-join experience for Starbucks
Rewards members. As part of the initiative, the
coffee connoisseurs at Starbucks created a gated 88.2%
community on Discord, which only loyalty app Of specialist coffee
and tea shops
holders could access. market was
Context generated by
chains in 2023
▪ Starbucks has successfully cultivated a
community as one of the major brand anchors 26.8%
around its coffee culture. Customers often Of Gen Z sign up for
loyalty
engage in discussions on social media, sharing programmes when
their experiences and forming a community prompted by a
beyond just coffee. company

Consequence 49.5%
▪ Despite its high reach, the messaging platform Of Gen Z find social
media network
Discord is community-focused (not mass recommendations
Image source: Starbucks on Discord audience). With Starbucks Odyssey establishing a very or extremely
presence on Discord, the brand achieved trustworthy
significant engagement with active users Source: Hot Drinks 2023d, Euromonitor Voice of the
creating, more than 600,000 posts and reactions. Consumer: Lifestyles Survey, fielded Jan-Feb 2023 (n=40,691)
© Euromonitor International
 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 27
27

Rationality: Balancing budget and indulgence in uncertain times

Balancing polarised Gen Z’s spending behaviour requires adopting Gen Z Shopping Preferences 2023
a dual mindset. Zennials are primarily rational and cautious % of respondents
spenders. But, at the same time, this generation indulges I like to find bargains
themselves more than other cohorts. They prefer rational
indulgences - small-size, impulsive gratification. According to I like to browse in stores even if I do not need to buy anything
Euromonitor’s Voice of the Consumer: Lifestyles Survey in 2023,
30.5% of Gen Z regularly buy small treats, and 19.7% often make I would rather buy fewer, but higher quality things
impulse purchases.
Despite preferences to “live in the moment” and enjoy impulsive I regularly buy myself small treats - products or services
indulgences, Gen Zers remain true to their pragmatism,
highlighting “quality” and “finding bargains” as the top shopping I like to visit shopping malls
features, as per Euromonitor’s Voice of the Consumer: Lifestyles
Survey in 2023. Over 2023, the average income of Gen Z I am willing to buy second-hand items
increased only by 1% in real terms, making 64.6% of the cohort
concerned about their financial situation. I try to lead a minimalist lifestyle and do not buy new items unless necessary

As a result, this generation thinks over and researches even small

I seek products with easy to understand labels
indulgences. For brands showcasing trendy but affordable choices
and emphasising the balance between budget-conscious choices
I regularly seek strong or well-known brands
and occasional splurges are strategies to consider. Brands such as
Uniqlo, known for its affordable yet stylish clothing, exemplify this 0 5 10 15 20 25 30 35 40
strategy. Source: Euromonitor Voice of the Consumer: Lifestyles Survey, fielded Jan-Feb 2023 (n=40,691)
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 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 28
28

Rationality: Parle Products achieves growth thanks to small indulgent bites

Characteristic Sugar Confectionery Growth 2018-2023
% y-o-y real growth
▪ Parle Products is India’s leading manufacturer of
4
sugar confectionery. It has been actively
relaunching discontinued brands and product 3
lines. In 2020, Parle relaunched its popular
brand Rol-a-Cola thanks to a social media 2
campaign, #BringBackRolaCola.
1
Context
▪ According to Euromonitor’s Voice of the 0
Consumer: Lifestyles Survey 2023, 65.5% of
Indian Gen Z were concerned about costs going -1
up, 22.2% thought they will be worse off in the
-2
future, yet 35% regularly bought themselves
small treats. -3
Consequence
-4
▪ Although sugar confectionery sales in India and
Image source: Parleproducts.com globally are stagnating as consumers pursue -5
healthier eating habits, Parle Products grew by 2018 2019 2020 2021 2022 2023
7.0% year on year in 2022, partly due to its
World India
response to the consumer need for nostalgia
Passport edition: Euromonitor International from trade sources.
and affordability in indulgent treats. Note: 2023 figures are forecast.
© Euromonitor International
 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 29
29

Retreat: Gen Z consumers strive to unplug in many forms

Gen Z encounters social media fatigue due to issues such as misinformation,
cyberbullying, hyper-targeted ads and “cancel” culture. Prolonged tech usage is
closely associated with heightened mental health concerns, a primary focus for
this demographic. According to Euromonitor’s 2023 Voice of the Consumer:
Health and Nutrition Survey, 55.9% of Gen Z acknowledged spending excessive
time on screens, making “monk mode” (consciously limiting exposure) or even
complete disconnection increasingly popular behavioural trends.
Companies such as Lush are changing their strategies to resonate with Gen Z.
Since 2021, Lush discontinued its presence on platforms such as Facebook,
Instagram, TikTok and Snapchat and opted for more niche advertising channels,
such as collaborations with other brands, corporate activism or through its
wellbeing app.
Dreamlike, fantastical and often bizarre imagery, challenging the boundaries
between reality and the imagination, resonates with overly anxious Gen Z. It
grabs the attention and offers a venue to escape from boredom and mediocrity.
Gen Z’s participation in gaming proves that Gen Z prefers dynamic, engaging
and creative content, which helps them disconnect. Features, such as exploring
a travel destination via VR headset (45.6% of Gen Z vs 41.6% of general
respondents), trying a new product in a virtual world (46% vs 41.2%) or simply
shopping in a virtual aisle (40.8% vs 37.9%) not only draws Gen Z’s attention
but also influences Gen Z’s purchasing decisions. Image source: Lush.com
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 TOP FIVE VALUES TO BRIDGE THE BEHAVIOUR GAP 30
30

Retreat: Collaboration between Xbox and Calm to improve the mental health of gamers
Characteristic
▪ In December 2022, Xbox announced a
partnership with the sleep and meditation app
Calm. The soundscapes from two Xbox games - 28.5%
Halo Infinite and Sea of Thieves - will appear on Of global Gen Z
respondents have a
the Calm app. In 2023, Xbox announced portable game
introducing an automatic shutdown option. console for their
Context
personal use 42.0%
Of global Gen Z
▪ Just as attitudes towards mental health are took part in online
changing, so are preconceptions of the negative video gaming at
effects of gaming. Gaming is more often least weekly
recognised to relieve stress and to disconnect 21.3%
from reality. Of Gen Z
respondents
suffering from
Consequence stress and anxiety
Image source: xbox.com
▪ Partnership with Calm is part of Xbox’s new used phone app to
help
mental health awareness programme. Combining
Source: Euromonitor Voice of the Consumer: Digital
wellness gains with environmental responsibility Consumer Survey, fielded Mar-Apr 2023 (n=20,079);
gives an additional value layer for consumers and Euromonitor Voice of the Consumer: Lifestyles Survey,
a competitive advantage for the brand. fielded Jan-Feb 2023 (n=40,691);
Euromonitor Voice of the Consumer: Health and Nutrition
Survey, fielded Feb 2023 (n=8,411)
© Euromonitor International
 Strategies to leverage the key values

© Euromonitor International
 STRATEGIES TO LEVERAGE THE KEY VALUES 32
32

Unlocking Gen Z engagement: Strategies to leverage the key values

Consumer spending research as

Hyper-personalised loyalty as a Fostering emotional connect and
a stepping stone for
marketing strategy nostalgia
psychographic analysis

© Euromonitor International
 STRATEGIES TO LEVERAGE THE KEY VALUES 33
33

Hyper-personalised loyalty appeals to Gen Z’s individualistic and pragmatic sides

Traditional marketing strategies often miss the mark in connecting Views on Status and Consumption 2023
with Gen Z due to its misalignment with their pursuit of individuality % Gen Z respondents
and rationality. Implementing and promoting personalised rewards
I like to try new products and services
emerges as a viable strategy, as it effectively combines both
elements.
I extensively research the products and
Zennials value individualism, which drives their demand for hyper- services I consume
personalisation. Over 51% of Gen Z respondents to Euromonitor’s I only buy from companies and brands
Voice of the Consumer: Lifestyles Survey in 2023 expressed their that I trust completely
preference for uniquely tailored products. Gen Z is also highly I want products and services that are
pragmatic and proactive in their purchasing decisions. They conduct uniquely tailored to me
thorough research to validate the value and seek added benefits in
their purchases. Personalised rewards enhance their money value I like to be distinct from others
as well as individuality.
I want to engage with brands to influence
As per Euromonitor’s Voice of the Industry: Lifestyles and product innovation
Innovation Survey in 2023, two thirds of global businesses
I prefer branded goods to non-branded
anticipate the growing significance of personalisation in the next alternatives
five years. Industry leaders are actively implementing strategies
now. Starbucks examines client preferences and purchase history I like to be actively engaged with brands
through its rewards programme to offer personalised discounts and
complimentary items. Other notable players embracing this 0% 20% 40% 60%
approach include Amazon, Sephora and Netflix. Source: Euromonitor Voice of the Consumer: Lifestyles Survey, fielded Jan-Feb 2023 (n=40,691)
© Euromonitor International
 STRATEGIES TO LEVERAGE THE KEY VALUES 34
34

Lacoste banks on gaming and personalisation with its UNDW3 NFT loyalty card
Characteristic How interested are you in participating
▪ In June 2023, Lacoste added a new gaming in investing in a digital asset with a
experience, The Mission, to its Web 3.0 digital asset unique identification code (NFTs) that
collection named UNDW3 (aka “underwater”), can be collected, shared or resold?
% of respondents
which effectively acts as an NFT loyalty programme
India
aimed at young consumers seeking personalised
and unique digital experiences. Thailand

Context China
▪ The Mission involves several challenges. By South Korea
completing missions, users receive points and rank Australia
higher on the leaderboards, increasing the rarity of
Poland
their UNDW3 cards. Top performers will receive digital
vouchers, and the winner will get an all-expenses-paid USA
real-life Lacoste VIP experience in Paris. United Kingdom
Consequence Canada
▪ Lacoste’s The Mission aligns with several of Gen Z’s France
key values. Personalised benefits cater to rationality
One of the three puzzles to unlock to view the and individuality. The brand also fosters a sense of 0 10 20 30 40
Salvatore Ferragamo collection Moderately interested Extremely interested
belonging through creating the UNDW3 community.
Finally, Lacoste invites users to immerse in an
Source: Euromonitor Voice of the Consumer: Digital
Lacoste.com alternative realm and unplug from reality nuisances. Consumer Survey, fielded Mar-Apr 2023 (n=20,079)
© Euromonitor International
 STRATEGIES TO LEVERAGE THE KEY VALUES 35
35

Consumer spending research is a stepping stone for Gen Z psychographic research

Generation Z, or The Realists, Generation Solo, Gen Creative, Gen Real Gen Z Consumer Expenditure (>=20s in 2023, 30-45 in 2040)
Value, Gen Ethics, and Digital Natives, etc, is known for its diversity. 2023/2040
USD billion
However, this diversity poses challenges in conducting
Housing
psychographic research on Gen Z.
Food and Non-Alcoholic Beverages
Given Gen Zers’ rationality in their purchases, commencing the
Transport
analysis from their spending patterns proves effective in identifying
high-profit sub-segments and formulating impactful strategies. Top Miscellaneous Goods and Services
three research methods to gain deeper insights into Generation Z: Health Goods and Medical Services
▪ Employ precise categorisation through Consumer Segmentation. Hotels and Catering
Given that Transportation will be the third largest expenditure for Leisure and Recreation
Gen Z in 2040, delve into the psychographic traits of Gen Z
Household Goods and Services
mobility consumers. Assess their inclination towards electric
vehicles and willingness to spend on complementary products. Clothing and Footwear

▪ Gain a thorough understanding of consumer perceptions with Education

Usage and Attitudes Analysis. With Gen Z's health spending Communications
increasing by 460% by 2040, examine trends, opinions and Alcoholic Beverages and Tobacco
reviews on health products on TikTok, WhatsApp and Snapchat.
▪ Identify factors shaping Gen Z’s shopping behaviour through Path 0 1,000 2,000 3,000 4,000 5,000
to Purchase Analysis. Given Gen Z’s wish to escape, investigate 2023 2040
channels and bundling preferences for leisure products. Source: Euromonitor International from national statistics
© Euromonitor International
 STRATEGIES TO LEVERAGE THE KEY VALUES 36
36

Harnessing the emotional power of storytelling and nostalgia

Consumption patterns among Gen Z also reflect emotionally-driven purchases, especially
regarding indulgences. This demographic places importance on authentic connections and
resonant narratives. Authentic storytelling and nostalgia are two strategic tools that evoke
emotional bonds with Gen Z.
Authentic storytelling is a potent strategy aligned with Gen Z's intrinsic desire for relatability
and a sense of belonging. Notable examples include Coca-Cola, which emphasises themes of
unity; Patagonia, known for its commitment to sustainability; and Nike, recognised for instilling
values of determination and perseverance. These brands successfully leverage storytelling to
connect with Gen Z, forging emotional ties through narratives that align with the generation's
values.
Nostalgia marketing is another influential strategy for building emotional connections with Gen
Z. Classic products appeal to Gen Z's wish to rediscover the past in a familiar yet fresh context.
An example is the recent resurgence of old-school digital cameras and flip phones on platforms
such as TikTok. The #digitalcamera and #flipphone hashtags registered over one billion and 830
million views, respectively, on TikTok.
Beyond individual devices, nostalgia extends to a broader yearning for simpler times and
increased connection, a sentiment traditionally embodied by “third places”. McDonald's
innovative concept, CosMc's, introduced in 2024, draws inspiration from its 1980s mascot to
create a beverage-centric experience rooted in nostalgia. This concept has proven successful, Image source: McDonalds.com

attracting twice the visits of the average McDonald's restaurant.

© Euromonitor International
 Conclusion

© Euromonitor International
 CONCLUSION 38
38

In a nutshell: A blueprint for Gen Z engagement

Gen Z presents a nuanced consumer profile, demonstrating a paradoxical stance on social
action, technology and spending. While openly championing social fairness and
environmental issues, they hesitate to align their activism with purchasing decisions.
Despite their digital nativity, many find traditional social media platforms overwhelming
and intrusive, eroding trust. Moreover, their spending habits reflect a blend of rationality
and impulsivity. Successfully navigating these behaviours demands meticulous attention
and consideration of key values in brands' strategies.
Utilising hyper-personalised loyalty programmes, implementing micro-segmentation based
on spending research and fostering emotional connections are pivotal strategies in tapping
into Gen Z behaviours. However, as values hold the utmost significance for this
demographic, the strategy should, first and foremost, reflect the key values of Gen Z.
Given Gen Z's reputation for prioritising “value for money”, it is imperative for brands to
develop inherently pragmatic offerings. However, beyond this, there are four additional
key values to consider when navigating Gen Z's behaviours. Addressing the gap between
their values and actions in social activism can be effectively achieved by enhancing
empowerment and fostering a sense of belonging. Utilising communication apps to
promote connection and belonging establishes a more intimate and community-focused
approach, potentially alleviating technology mistrust. Recognising the profound impact of
creativity and the desire for retreat can influence Gen Z's spending priorities.

© Euromonitor International
 CONCLUSION 39
39

Generation Z: How to win

Develop a multi-channel approach ▪ The essential aspects of Gen Z's shopping behaviours are their appreciation for in-person
for delivery, focus on new social contact and connectivity, necessitating brands to establish a strong presence across
media for marketing channels. On the contrary, in the realm of Gen Z-focused marketing, the focus should be
on three venues - video-centric social media platforms, communication and gaming apps.
▪ The emphasis on authentic brand engagement is central to Gen Z's identity. Therefore, for
Engage through advertising, marketing purposes engaging in meaningful and emotional conversations is much more
advertise through communicating important than just delivering content. Consistently ensuring concise and well-segmented
messaging across all channels is a must when targeting Gen Z.
▪ Euromonitor’s Voice of the Industry: Sustainability Survey results indicate that companies
Collaborate with Gen Z to make expect sustainability to guide corporate decisions in the future. Involving Gen Z in shaping
them feel empowered the future resonates with this cohort, which is actively searching for empowerment.
Empowerment of a client reflects on businesses as trustworthy partners.
▪ Creativity is fundamental to Gen Z's identity. Co-creation practices benefit consumers by
Embrace Gen Z’s creative empowering Gen Z to shape corporate strategies, express preferences and establish
influence themselves as creators. This approach future-proofs business strategies, ensuring prompt
feedback and consumer-driven innovation.
▪ Experiencing an element of surprise and awe serves as a remedy for anxiety, boredom
Incorporate an element of and depression, offering Gen Z a means to escape overwhelming uncertainty. Immersing
surprise and awe in positive emotions such as joy and happiness also fosters brand trust and emotional
loyalty.
© Euromonitor International
 CONCLUSION 40
40

Questions we are asking

Gen Z income and expenditure Gen Z families Gen Z and other generations
How does the economic environment How will household spending evolve as Gen What are consumption commonalities and
impact Gen Z's disposable income and Z trends towards remaining single or differences between different generations?
spending behaviour? What strategies without children? How can businesses How can experience with Baby Boomers
should brands consider for diverse Gen Z focused on family-orientated products or and Gen X inform effective engagement
behaviour scenarios amid financial services pivot their models to align with with Generation Z?
uncertainty and economic slowdown? shifting family structures?
© Euromonitor International
FUTURE OF CONSUMPTION: UNLOCKING GEN Z BEHAVIOUR FOR CRAFTING POWERFUL STRATEGIES

For Further Insight please contact

Jana Rude
Senior Insight Manager - Consumers
[email protected]
• linkedin.com/in/jana-rude

© Euromonitor International
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