The kids of Generation Z are about to become the planet’s biggest consumer spending force. That portends many opportunities in the globe’s two largest economies, the U.S. and China. But retailers and brands in many developed nations with less robust economies aren’t cheering. That’s because their Gen Z youth have grown up in the shadow of financial crises and economic recessions, leaving them indelibly marked by frugality.
Surveys show that unlike millennials, many members of Generation Z are cautious about excessive consumption. After seeing their parents walloped by the 2008 financial crisis, they’re attracted to thrift stores, sustainable brands, and saving for a rainy day—even when they have steady jobs and rising wages. That’s particularly true in Europe and Japan, where growth has failed to bounce back as it has in the U.S. and China. Those Gen Zers, born in the mid-1990s or later, are part of a generation that’s entering the workforce with a far more cautious approach to spending than their predecessors.
