0 comments
The increasing cost of living and diminishing budgets mean that Gen Z are reluctant to spend big over Christmas. They’re redirecting their cash toward experiences rather than products – what might that mean for marketers?
It’s the season to be jolly…and spend a lot.
Everyone knows that Christmas is a time of financial strain and pressure. For those of us without a massive bank account, now is when budgeting is most important, as we juggle gifts, travel, food expenses, party costs, and a whole lot more. It’s a particularly stressful season for Gen Zers, most of whom have yet to earn big bucks and routinely see their wages eaten by rent and student loans.
What do all these outgoings mean for their festive spending habits, you might be asking?
Research suggests that Gen Z are more inclined to splash cash on experiences rather than tangible products compared to older generations. Marketing firm dentsu found that, in 2024, at least one third of Gen Z intended to dedicate 25% – 49% of their seasonal budget on experiences.
Similarly, a 2024 holiday shopping report conducted by growth consultant Simon Kucher stated that Gen Z are likely to spend ‘relatively more’ than older generations on ‘trips and experiences’ at Christmas time. The company also concluded that young people were ‘doom spending’, prioritising short-term gratification over long-term investments; this includes trips and experiences.
According to Eventbrite, a digital platform that allows users to attend and organise live experiences, Gen Z are not scaling back their seasonal celebrations but are ‘redirecting’ them instead, opting for events like concerts, wine tasting, and even EDM raves as opposed to traditional gifts. In fact, one cited study by GetYourGuide found that 92% of US consumers would rather receive an experiential gift over physical items.
We’ll see you on the dance floor after our mince pies this December, then?
All joking aside, it makes sense that younger people prefer to indulge in real-world activities. It’s important to remember that, for many Gen Zers, they spent at least two Christmas periods stuck at home. While we can’t say for certain, it’s highly likely that being isolated during a formative period has left them with a greater appreciation for social interaction and novel events.
It’s far more fun to book a trip, fly to another country, and indulge in foreign culture than it is to flex a new watch, for example, especially when most of us are kind of broke and pessimistic about our long-term prospects. As mentioned, ‘doom spending’ is Gen Z’s way of dealing with anxiety regarding the future, and experiences lean into this short-term life approach. Enjoying the now and doing fun things is best shared with friends while you’re young and able.
So…Gen Z are moving away from physical presents, by and large. But what about when they do decide to buy a few things and pop them under the Christmas tree? We’ve data on that, too.
Perhaps unsurprisingly, young people are all about sustainable gifts and second-hand goods. A survey by EY Global reported that younger consumers are ‘prioritising products that are organic or sustainably sourced’ as they ‘actively seek out brands that align with their values.’ More than a third of Gen Z respondents planned to purchase second-hand gifts in 2024, primarily to stretch their smaller budgets.
This love for thrifting and hand-me-downs has fuelled the success of platforms like Vinted and Etsy, where homemade and repurposed items are often bought for a discount. Gen Z is so enamoured with this dynamic that it has thoroughly transformed the second-hand market, posing new challenges for high street retailers. That reality will, of course, bleed into the Christmas period.
Sustainability and responsible choices are key considerations for most Gen Z consumers. Even if you’re not offering experiences and only selling products, you’d best make sure that you’re sourcing from trusted distributors and not greenwashing; the only thing worse than a Christmas with no cash is a fossil-fuelled one.
See also:
