How much consumers have to spend – and how they spend it – differs with age. Learn how to make this work for your clients and your business.
If you want to outdo the competition this year, you’ll have to equip merchants to capture a healthy share of consumer buying power. The average U.S. consumer spent more than $66,000 in 2021, and they spent it both when shopping in person and on digital channels. But how much shoppers spend and how they spend it varies from generation to generation. Understanding the differences will give you critical insights into selling the solutions merchants need to succeed.
Consumer buying power by generation.
Generation X: Born 1965-1980.
The generation that made Friends a smash hit holds the greatest consumer buying power today. Average Gen X spending of $83,357 in 2021 is about $14,000 more than the No. 2 group — Millennials. Mostly in their 40s and 50s, Gen Xers are a practical, self-reliant bunch. While they might not use social media as much as their younger counterparts, they’re pretty comfortable using digital tech to discover, browse, and buy. Gen X shoppers are big fans of visiting stores but also can’t resist the convenience Amazon offers.
Gen X doesn’t mind paying full price, meaning they’re not so keen to use the pay-in-four installment options that are so popular with younger consumers. They’re known for their loyalty, though, so signing them up for subscriptions could be a quick win.
Millennials: Born 1981-1996.
Millennials are so much more than avocado toast and a certain shade of pink. Vacations, concerts, dining at Instagrammable restaurants, and streaming favorite shows and movies eat up a good bit of their more than $69,000 in consumer buying power. That’s probably how they cope with all the debt they’re buried under, but that doesn’t keep them from donating to social causes and siding with responsible brands. You’ll often find Millennials scrolling and shopping on their phones. They’re also the generation most likely to pay for a purchase in installments and commit to a subscription plan that makes their life easier.
Baby Boomers: Born 1946-1964.
Armed with more than $62,000 in annual consumer buying power, Baby Boomers arrived and came of age when the economy was roaring, and the living was good. This Facebook-loving generation enjoys the tried-and-true store shopping (and paying) experiences. You won’t find many subscription service or “modern layaway” fans in this crowd.
Silent: Born 1945-earlier.
Known to be highly traditional and hard-working, the Silent Generation spent more than $44,000 in 2022. They grew up with the familiarity of going into brick-and-mortar stores for their shopping, and they continue to stick with those habits. That doesn’t mean they can’t be found online when it’s convenient for them, though.
Generation Z: Born 1997-2013.
People can’t stop talking about Gen Z, even if their roughly $42,000 in consumer buying power puts them at the bottom of the pack for now. However, it’s their values-driven spending and digital-first behavior that’s getting merchants to sit up and pay attention. The TikTok generation will wield greater influence as they age into careers and watch their incomes grow. Businesses should invest now to be ready for an influx of tech-fluent, cause-conscious Gen Z shoppers.
Solution fitting based on consumer generations.
Every generation has its quirks and preferences. Because of this, payment providers must understand the kinds of solutions and experiences necessary to meet each demographic’s needs. A merchant with a strong Millennial and Gen Z base might lean toward a highly progressive omnichannel payment setup. But the business with a Silent and Baby Boomer base might be better off investing in an easy-to-use, foolproof in-store system. Getting your arms around what makes each generation tick is one way you can help steer merchants toward the optimal payment solution decisions.
Help your clients deploy solutions that will create the experiences their customers want and capture their share of consumer buying power.
To learn more about finding the best solutions for your clients, contact us.
