- ‘Zillennials’ are the consumers at the cusp of the millennial and Gen Z generations.
- As many as 48% of zillennials live with their parents, meaning they don’t pay a mortgage or rent.
- This gives them enormous spending power, and retailers are hoping to attract zillennial dollars.
A powerful micro-generation is on the rise, and retailers are starting to fight for its disposable income.
Called ‘zillennials’, or ‘zennials’, this cohort of roughly 30 million consumers includes anyone born between 1990 and 2000 — right at the cusp of the millennial and Gen Z generations. But what makes zillennials unique from their older and younger peers is their spending power, according to a recent report from financial services publication PYMNTS.
PYMNTS estimates that about a third of zillennials, or around 11 million people, are still living with family members. The US Census Bureau estimates that share is even higher — recent data showed that around 48% of Americans between the ages of 18 and 29 are living with their parents.
That means that a large share of young consumers aren’t paying for rent or a mortgage. Add that to their steady income and the fact that they grew up on the internet, and zillennials are becoming savvy shoppers with plenty of disposable cash.
And they’re spending it on luxury products. Morgan Stanley analysts wrote recently that young consumers living with their parents are helping to fuel the luxury boom because they’re saving on bills and necessities like groceries.
Analysts called the trend “fundamentally positive for the industry.”
The luxury market is expected to grow 21% in 2023, driven, in large part, by young shoppers who are starting to buy luxury products three to five years earlier than previous generations, according to a recent report by management consulting firm Bain & Company. In fact, millennials and Gen Z are expected to make up 70% of luxury shoppers worldwide by 2025 — in 2019, they made up just 44% of the market, Quartz reported, citing Bain data.
Retailers are starting to catch on, working to lure zillennial dollars.
Nike CEO John Donahoe said on CNBC’s Closing Bell this month that the brand is “really focused” on attracting young consumers right now because they want “the most innovative products and wants brands that are globally relevant.”
JD Sports, which owns sneaker store chains like Finish Line, said recently that young consumers boosted holiday sales by 20% as they gobbled up over 2 million pairs of Nike Air Force 1s, a Gen Z staple that typically retails for $110.
“I think that the buying power of our customer is much higher than it used to be,” JD Sports CEO Régis Schultz told reporters, according to Reuters. “They don’t have the utility and the rent or the mortgage to pay.”
