Distinguishing spending patterns — How GenX, GenZ and millennials differ

• Although Gen-Z consumers have distinct characteristics from older generations, they are also value-conscious at the core.
  
• 60% of mass consumers are willing to buy unbranded products as long as they meet their quality expectations.
  
• Approximately 70% of mass consumers have increased their online shopping frequency in the past year.
  

When it comes to online shopping, GenX, GenZ, and millennials differ. For the uninitiated, GenX are people born between the boomer generation and the millennials, who are also known as GenY and are born between 1980–1994. Breaking down the cohort by demographics, a report by strategy consulting firm Redseer has found that approximately 75% of the mass consumers are millennials and GenZ consumers.

While GenZ, who are young and independent, show purchase preference for apparel, beauty and personal care, and electronics, the value-driven independent millennials tilted towards beauty and personal care , food & grocery, and apparel. GenX, who constituted about 13% of the respondents, spent a higher share on food and grocery, followed by health and wellness.

Interestingly, the survey also finds that although GenZ consumers have distinct characteristics from older generations, they are also value-conscious at the core.

It is noteworthy that the survey defines "affluent" consumers as individuals with an average annual income exceeding ₹10 lakh. The "mass" consumers have an annual income ranging from ₹2.5 to ₹10 lakh, while the "strivers" represent a third group with earnings below ₹2.5 lakh per year.

Have money, will spend

The survey revealed the shopping behaviours of various consumer groups and provided insights into the primary factors influencing their purchases.

While for affluent consumers quality and brand optimisation is the most important purchase decision driver, for mass customers it is price and quality optimisation, showing that affluent customers are more brand conscious. Affluent customers do not go for unorganised or local offerings. They also prefer best in class products and luxury brands.

Consumers seek bang for buck

Throughout the survey, a common trend emerged concerning online shopping - the quest for value at the optimal price. The primary drivers influencing purchase decisions were identified as prices, deals, and discounts offered by e-commerce platforms, the product's quality, and the trustworthiness of the platform itself. Interestingly, the findings indicated that over 60% of mass consumers were willing to buy unbranded products as long as they met their quality expectations. Additionally, approximately 30% of mass consumers even favoured unbranded items over branded ones.

Online shopping frequency on the rise

The primary trend that is seen unfolding among the general consumers is the expansion of online wallets. This shift will be driven by their strong focus on obtaining value for their purchases across various product categories, and their growing reliance on the internet during the entire decision-making process.

In fact, the mass consumers are now nearly as tech-savvy as the affluent consumers, showing a remarkable comfort with technology. They are open to experimenting with new products and brands, and their inclination towards online shopping spans across different categories. The affordability of products on eCommerce platforms and the convenience of digital payments are also contributing factors to this shift. According to Redseer's survey, approximately 70% of mass consumers have increased their online shopping frequency in the past year.