Every generation has its defining moment, be it President Kennedy’s assassination, the space shuttle disaster, September 11th and/or the Great Recession. Our older children are having their moment right now, and that impact will be felt for decades to come. Naturally we care about this because those are our kids. But Generation Z (those born in the range of 1996 to 2000, depending on who you ask) have moved out or will be moving out of the dorm or home soon.
Investors paid close attention to Boomer spending habits when it was clear they were going to be driving the economy. Generation X didn’t have that much impact other than a preference for distressed flannel shirts. But Generation Z is even bigger than the Baby Boom and it’s time for them to have their economic say.
There’s always danger in generalizing, but as a group Zoomers are more educated and diverse than previous generations. Millennials allegedly pursue consensus and prefer large groups. Do you remember those Pepsi commercials where every time a can was opened a mob showed up? Zoomers are more independent and competitive. Gen Z also expects to work harder than previous generations.
Consumer spending accounts for around 70% of U.S. gross domestic product. So, the big question — when it comes to investing, at least — is how the COVID-19 pandemic will affect Zoomers’ spending. This is where I begin to speculate. I’m interested to hear what you think, too.
Boomers were acquisitive and brand conscious. Millennials want to work less and travel more. What choices will Gen Z make? Zoomers were in late childhood to the tweens when the Great Recession unfolded. The oldest are now 20-24 years old. Much of their economic stability, if we can call it that, was based on a gig economy that has virtually disappeared in this pandemic.
It’s tempting to think that technology will get the lion’s share of consumer spending, or at least will benefit from the changeover, but that’s not necessarily true. There’s an increasing disconnect between price of technology and value. That has been encouraging people of all ages to keep their phones, tablets and PCs longer. Though I continue to believe that virtual and augmented reality are the Next Big Thing, adoption has been surprisingly slow. Green energy? Electric cars? Maybe.
It’s always dangerous to assume everything is changing, or at least that change will be permanent. When gas was close to $5.00 a gallon, pundits predicted the death of the SUV. Now it’s the sedan that’s on the coroner’s table. But if our Zoomer kids decide they want economic stability over anything else, I won’t blame them.
What do you think? More relevantly, what do your kids think? Email me at firstname.lastname@example.org with your thoughts (I won’t put you on any email list).