Spending Management Is Top of Mind for ‘Zillennial’ Shoppers

young woman with phone

For zillennials — the bridge generation between millennials and Generation Z, born between 1991 and 1999 — budgeting is a key priority when making decisions about where and how to shop.

“Generation Zillennial,” a PYMNTS Intelligence special report, draws on a survey of more than 3,000 U.S. consumers last month to understand the spending, financial and lifestyle preferences of consumers in this age group.

“We find that zillennials are more financially responsible than many may give them credit for: more than three quarters of zillennials can be classified as either budget-minded (45%) or wealth builders (33%),” PYMNTS’ Karen Webster noted in a recent feature. “We believe that these personas provide a more meaningful way to track and understand zillennial behavior over time — and may even help to explain why so many in this age group move back home after school.”

The “Generation Zillennial” report noted that consumers in this age group are more likely to live paycheck to paycheck than the population overall, with 77% doing so. Plus, they are likelier to have outstanding balances from student loans, credit cards, store cards and personal loans, among others.

“We see that younger customers use their cards more overall and this is even more pronounced in certain spend categories,” American Express CFO Christophe Le Caillec told analysts on the company’s most recent earnings call. “For example, customers aged 35 and under use their cards at restaurants over 70% more on average than other customers in this segment.”

The company also noted that millennial and Gen Z spending was up 15%, far outpacing other cohorts where spending growth was up in the high single digits, and that consumers in the two generations made up 60% of new accounts.

Perhaps in part due to their outstanding balances, zillennials disproportionately adopt budgeting tools such as buy now, pay later (BNPL) plans. In fact, these consumers are more than 50% likelier than the population overall find pay later options very or extremely important when choosing a merchant. And 1 in 3 consumers in this age bracket find these options important, versus just 20% of the population overall.

Businesses are noting this age group’s demand for deals. For instance, in recent quarters, off-price apparel and home goods retailer TJX, parent company of TJ Maxx, Marshalls, HomeGoods and others, has noted strong acquisition with Gen Z and millennials.

Similarly, Chinese discount retailer Miniso’s CFO Eason Zhang noted, “a lot of new young customers,” on the company’s last earnings call, and Five Below, a discount retailer targeting young shoppers, noted a 19% year-over-year net sales bump in its last quarterly report.

Zillennials are carving out a distinct identity as financially conscientious consumers who prioritize budgeting and seek value in their shopping experiences. This generation, straddling the characteristics of millennials and Gen Z, demonstrates a unique blend of financial prudence and spending habits influenced by economic realities such as their outstanding debt. As businesses recognize and adapt to these preferences, many that can meet this demand for budget-friendly shopping options are seeing increased engagement and sales from this demographic.