Covid-19 will stunt Gen Z consumer trends
Many members of Gen Z entered the workforce for the first time in 2020, finding poor economic prospects that will affect consumer trends going forwards. For many members of Generation Z – the cohort born between 2000 and 2010 – the year of the pandemic would have been, their arrival as economically-independent consumers.
However, the pandemic has given them a chaotic job market, leading many to wonder whether the consumer trends brought about by Gen Z will take longer to develop. The anticipated trends include an overwhelming preference for ecommerce, high levels of consumer advocacy, greater health awareness and the prevalence of plant-based diets.
Among the factors likely to limit consumer spending power among Gen Z and therefore dampen these trends, unemployment and higher-than-ever levels of student debt loom large. Young Gen Z workers have struggled to secure and maintain steady jobs in 2020, during the pandemic’s first waves, and in future they are likely to face further disadvantages.
According to the Economic Policy Institute, the year-on-year change in unemployment among workers aged 16-24 in spring 2020 was almost double that of workers aged 25+. Millennials suffer from weak employment patterns, with zero-hours contracts and gig working prevalent, but Gen Z is disproportionately affected because of workers’ dependence on contact-reliant sectors.
The US leisure and hospitality sector saw 41% lower employment between February and May 2020, where 25.8% of Gen Z workers worked in 2019, compared with just 7.4% of over-25s. Student loan debt will also hamper economic recovery for younger workers. Like many Millennials, Gen Z students in countries like the US and the UK will be saddled with debt.
Record university applications in 2020, as teenagers opted for delayed entry to poor job markets, will create a financially impaired generation and deprive the marketplace of thousands of salaried consumers.
Whilst Gen Z is associated with various consumer trends that retailers, manufacturers and marketers are banking on for the future, many of these have in fact been pioneered by Millennials. With a less debilitating impact from Covid-19 than Gen Z consumers in many cases, Millennials will be the primary drivers of generational consumer trends over the next decade.
In Global Data's survey of consumer trends conducted in 2020, 53% of Millennials consumers said they would shop online more after Covid-19, which was almost exactly the same as Gen Z at 54%. Meanwhile, 16% of Gen Z consumers surveyed opted for vegetarian diets, but the historical trend towards vegetarianism had actually slowed since Millennials powered away from Generation X and Boomers.
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