Consumer Spending by Generation: Who Spends the Most and What Are They Buying?

Consumer Spending by Generation: Who Spends the Most and What Are They Buying?
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Raise your hand if the following sounds familiar.

  • The Silent Generation saves old string and is stingy with money.
  • Baby boomers are extravagant. They’re into materialism and don’t give a hoot about sustainability.
  • Generation X is—uh… Generation who?
  • Millennials are glued to their phones. They do all their shopping online. They also don’t think twice about buying $4 coffee.
  • Generation Z is the youngest age group. Really, really not much different from millennials.

In truth, the above comments are myths; myths that marketers and/or content creators should do their best to ignore. Instead, in-depth research is required, as well as a realistic viewpoint of buying habits.

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Delving into consumer spending by generation

In reality, millennials don’t do all of their shopping online, any more than baby boomers are necessarily extravagant. Nor does the Silent Generation hoard.

And, by the way, Generation X has a great deal of buying clout. Surprised? You won’t be, after taking a look at the following.

Several years ago, the Bureau of Labor Statistics compared expenditures between generations (excluding Generation Z, which, at the time, wasn’t old enough to start spending its own money). Here is a general overview of average expenditures. 

Study by BLS about expenditures between generations

More recently, the BLS had this to say about generational spending, from a percentage point of view: 

Study by BLS from percentage point of view about expenditures between generations

Here’s what’s interesting. The above numbers indicate that Gen X, the so-called “forgotten” generation, might be small, but its spending patterns are mighty. Mightier than those of millennials and baby boomers, a fact that didn’t change much during the coronavirus pandemic, even as this cohort was forced to adjust bill payments and shopping habits.

Let’s find out more about Generation X. And the other generations, as well.

Generation X: 1965-1980

Generation X: 1965-1980

Many Gen Xers were still recovering from the Great Recession when the COVID-19 economic shutdown hit. As mentioned above, this forced an emphasis on digital handling, in areas such as remote work and online shopping.

According to PwC ‘s March 2021 Global Consumer Insights Pulse Survey, only 28 percent of Gen Xers polled had acquired products via mobile/smartphones. McKinsey data bears this out, indicating that Generation X members have less intent to buy essential and non-essential items online. On the other hand, this age group does enjoy purchasing at-home streaming, book and magazine services.

Speaking of intent to buy online in the near future, here’s what PwC learned about Generation X:

  • 29% of those in this age group indicated they would spend more on takeout food
  • 20% noted they’d spend money on fashion
  • 20% will focus their purchase on health and beauty
  • And 15% will spend money on travel

Unlike their baby boomer predecessors, Gen Xers approach each potential purchase with a great deal of skepticism. And, unlike their millennial successors, these adults focus on purchases that are unique and innovative. They are into convenience and customization. They’ll also make use of search engines, online reviews and social media networks before making a purchase.

To reiterate:

  • Gen Xers delve into research before they buy; they use the internet to thoroughly research products
  • Many have yet to recover from the financial stresses of the Great Recession
  • They’re less likely to buy online than their successors
  • For such a small group, they evidence huge spending clout

Speaking of successors, our next focus is on the Gen X younger brothers and sisters.

Millennials: 1981-1996

Millennials: 1981-1996

The typical millennial stereotype is, unfortunately, splashed all over mainstream and social media. Slackers who think nothing about paying $4 for a cup of coffee. People who are glued 24/7 to their smartphones and/or tablets, and who only buy online.

The reality is somewhat different. Certainly, millennials grew up with technology at their fingertips. Many younger millennials would be hard-pressed to remember life before the World Wide Web. So, it should probably not come as a surprise that, according to PwC, a whopping 43 percent of millennials surveyed said they bought products and shopped weekly by mobile/smart phone.

McKinsey & Company also indicated that, while the shift to online shopping throughout the pandemic has been “near universal across categories,” high-income earners and millennials, both, seem to be at the top of this list. Millennials, especially, have been likely to go online for essential items, such as groceries, household items and personal care products. Millennials have also demonstrated the highest intent for entertainment at home and consumer electronics.

Additional online intent-to-purchase information notes that:

  • 37% of millennials surveyed predict they’ll spend more money on takeout food
  • 33% plan to buy more fashions and accessories
  • 30% are focused on health and beauty spending
  • 24% anticipate expenditures on travel

But, here’s a fun fact. millennials don’t want to always shop via the internet. For example, while they spend time on social media for research, they want the convenience of omnichannel accessibility to purchase.

They also like the social aspects of in-person shopping. If they can find a product they like in a brick-and-mortar store, that’s where they’ll head. In fact, younger millennials are more interested in the physical shopping experience than their older counterparts.

Now, for the final fun fact. When it came to food shopping during the pandemic, millennials and their younger Gen Z brothers and sisters preferred acquiring pre-prepared convenience meals, versus buying ingredients for in-home cooking.

Here comes the summary of millennial buying habits:

  • They’re less about online shopping, and more about the omnichannel experience
  • They’ll spend time online doing research, then determine different channels for purchasing.
  • They’re interested in food spending, both takeout and in restaurants
  • A high percentage of millennial dollars is dedicated to entertainment

Let’s move on to the newest cohort, Generation Z.

Generation Z: 1997-2012

Generation Z: 1997-2012

One takeaway is that the Generation X cohort tends to be high spenders. What about their kids?

Generation Z members don’t know anything about Life before Internet (except through stories). Additionally, many in this demographic grew up in the shadow of the Great Recession, and are entering the workforce in an economy that has been decimated by the coronavirus pandemic. They might have seen their parents or family members lose homes. And, the oldest of the cohort might struggle to find work.

And yes. They shop online. According to PwC, 35 percent of those surveyed in this age group shop online—daily. But they don’t just stay home and buy stuff on computers and mobile phones. Much like their older millennial brothers and sisters, Gen Z shoppers like going to brick-and-mortar stores and looking around. To them, doing so is a social excursion. Furthermore, there is an instant gratification component. They don’t have to wait for their stuff to be delivered.

What kind of stuff are they planning to buy online in the near term? According to PwC:

  • 36% of those surveyed in this cohort expected they would spend more on takeout food
  • 36% also noted they would spend more on fashion
  • 32% pointed out they would spend money on health and beauty
  • 26% indicated they would spend more on travel

Another interesting aspect? Generation Z members like luxurious things, a desire that hasn’t been quashed by the pandemic. But they’re not interested in the next big thing. Nor do they follow trends. To that end, they’re willing to go online and in person to get what they want. Furthermore, Gen Zers might spend money on lower-price and lower-quality items from less critical categories to prioritize spending elsewhere.

Finally, we aren’t looking at spendthrifts here. These much younger adults have inherited careful spending habits from millennials, as well as developed savings mindsets that will be in place well throughout their adulthood.

So, to summarize Generation Z:

  • They research online, but are likely to buy both from both online and bricks-and-mortar retailers
  • They’re interested in luxury items, in an effort to prove uniqueness
  • They want the shopping experience, and spend on eating out
  • They have a savings mindset

Now let’s examine this cohort’s grandparents.

Baby boomers: 1946-1964

Baby boomers: 1946-1964

Here are more stereotypical comments about boomers. Selfish. Extravagant. Selfish. None of this is really true, especially when it comes to buying habits.

So, let’s get back to PwC. In the survey, 11 percent of baby boomers surveyed bought products via smartphones or tablets. Yes, this is a very small percentage, especially compared to the younger age groups analyzed here. And, according to McKinsey, boomers scored the lowest when it came to online intent to shop.

Furthermore, they aren’t likely to buy much more online at least in the future. PwC found out that:

  • 23% of boomers surveyed indicated they will spend more on takeout food
  • 9% pointed out they would focus their spending on fashion
  • 10% said they’d be spending more on health and beauty
  • 13% indicated they’d spend more on travel

So why, in another survey, did 85 percent of baby boomers surveyed say they research products on web browsers, while 66 percent reported making regular purchases on web devices? And how is it that, during the pandemic, boomers online shopping increased 5.7 times more, year over year, compared to millennials’ 4.3-times increase during the same period?

One word: Convenience.

Unlike their children and grandchildren, baby boomers don’t like to shop. Even as they prefer in-person visits to stores, they’re not fans of browsing, or finding the best deals. They also don’t care about the social aspects of shopping. Given their disposable incomes, they haven’t felt the need to hunt out bargains.

The pandemic shutdowns have also driven a higher number of boomers to online shopping. What’s interesting is that this age group upped its spending on ingredients for at home cooking, which they were willing to pick up via curbside, or through deliveries.

So, to summarize:

  • Until the pandemic, boomers were mainly bricks-and-mortar shoppers
  • They aren’t fond of shopping as an activity; they just want to get it done
  • They don’t feel the need to hunt out bargains
  • They still prize customer service over all else

Who’s left? Baby boomer parents.

The Silent Generation: 1925-1945

The Silent Generation: 1925-1945

Finally, we come to the oldest cohort in this article. Perhaps unsurprisingly (and once again, according to PwC), only 6 percent of those in the Silent Generation used a mobile or smart phone to purchase products in 2020. Even more so than their boomer children, members of this cohort are far more likely to prefer in-person shopping.

Many in the Silent Generation were born during the Great Depression and, as such, inherited financial conservatism. This doesn’t mean they’re cheap, or that they hoard and save every single thing (such as string). It does mean that they aren’t as willing to open up their wallets and spend. At least, not without good cause.

Specifically, here is the Silent Generation’s online intent-to-spend:

  • 28% of those surveyed among this cohort indicated they are likely to spend more on takeout food
  • 4% noted they would spend money on fashion
  • 0% indicated they would spend money on health and beauty
  • 14% are interested in directing their spending toward travel

And, here is a final fun fact. While many in the Silent Generation prefer in-person shopping, younger members of this group represent a fast-growing collection of internet users.

So, to summarize the Silent Generation:

  • They rarely order from mobile phones or tablets
  • They do prefer in-person shopping
  • They’re less likely to spend impulsively
  • Younger members are using the internet more often

Banning the stereotypes

While it’s easy to take each generational cohort and slap a preconceived notion on it, it’s not a good idea. Content creators and the marketers for whom they work need to understand what drives each generation, and then craft messages to meet their needs and habits. Doing so requires in-depth research about attitudes and preferences.

And, let’s not forget that, despite overreaching characteristics of each generational cohort, the people within these groups are just that: People.

In other words, a one-size-fits-all strategy might not work. Instead, marketers and content creators should focus more deeply on segmentation of specific audiences, versus relying on generational myths, especially when it comes to developing messages, and prompting responses.

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About the author

Amy Sorter

Amy Sorter is an award-winning journalist, copywriter, and principal of The WordSorters. Her work has been published in regional and national business and consumer publications. Amy's focus is on creating customized, highly engageable content in a variety of formats for non-profit organizations, small businesses, and Fortune 500 companies.