Gen Z Expected to Experience the Fastest Growth in Spending Power Surpassing Baby Boomer by 2029

Gen Z, those born between 1997 and 2012, is poised to become the wealthiest generation ever, according to NielsenIQ’s recent “Spend Z” report. The report projects that Gen Z will experience the fastest growth in spending power, expected to reach $12 trillion by 2030, surpassing baby boomer spending by 2029.

Marta Bowles, NielsenIQ’s Chief Communications Officer and Head of Marketing in North America highlighted that Gen Z is ahead of other generations at comparable ages. For instance, the average 25-year-old Gen Zer earns an annual salary of $40,000, which is higher than any other generation at the same age, leading to larger spending habits.

Jason Dorsey, Gen Z expert and President of the Center for Generational Kinetics, emphasized that Gen Z is the most valuable generation for brands due to their significant lifetime value. NielsenIQ’s findings suggest that per capita Gen Z spending will grow at a compound annual growth rate of 4.02% over the next decade, doubling the speed of previous generations.

Gen Z’s position as the first digitally native generation is a crucial factor in their spending power. They use social media extensively to research brands and inform their purchasing decisions. The health and beauty categories are particularly popular, with 81% of TikTok dollar sales in 2024 projected to come from these industries.

Social media has revolutionized the beauty industry, with online reviews being the most critical factor for Gen Z consumers when shopping. Whether reviews are posted directly on product websites or by influencers on social media platforms, they significantly influence purchasing decisions. Bowles noted that Gen Z expects brands to be omnipresent in an omnichannel environment.

Dorsey pointed out the importance for brands to understand Gen Z, especially as this generation values a hybrid shopping strategy that combines digital experiences with physical locations. Despite their digital inclinations, Gen Zers still appreciate shopping in stores for items like makeup and apparel.

For brands, this means that having a dual approach—offering both online and in-store shopping experiences—is crucial to capturing the Gen Z market. Ignoring either aspect would be a significant missed opportunity, according to Dorsey.

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