Each New Zealander has their own unique spending personality. However, if you divide us up into the big generational cohorts, we can see some overall trends that characterise each demographic. Let’s take a look at each one:

Baby Boomers: seeking better health and a bright future

The Baby Boomer demographic is made up of New Zealanders aged 54 to 72. This is the group of Kiwis with the most spending power, partly thanks to their high home ownership rates and partly because they’ve accumulated more wealth over time.

When it comes to spending, Baby Boomers aren’t necessarily shopping around for the cheapest deal they can find. They’re more interested in making responsible choices, looking out for the environment and protecting our natural environment for their grandchildren. They also spend heavily on their health and wellbeing, which seems to be paying off: more Boomers are able to work into their retirement. While some must do so for financial reasons, many choose to keep working, which buoys up their spending power even as they age.  

Generation X: squeezed from every direction

New Zealanders aged 38 to 53 make up Generation X, a group that’s not only squeezed between two much larger generations, but also squeezed for time and money. While there are fewer people in Generation X, they’re at the peak of their earning power so their per-person spending ability is the highest of any cohort.

Many Gen Xers entered the housing market as it boomed in price; the housing market has risen by 350% since 1985 when the youngest people in this generation started primary school, according to one economist.  As a result, their accommodation costs are high, whether they rent or own. This group of New Zealanders also has the highest debt load of any generation, so they’re particularly price sensitive. People in this group are often raising kids and helping look after their parents, so they’re stretched for time – they want convenience, but only at the right price. Gen Xers like to spend on gadgets and technology as well as entertainment.

Millennials: convenience is king

New Zealanders aged 22 to 37 fall into the Millennial demographic – there are now more than one million Millennials, making them the largest cohort of all. Right now Millennials don’t have anywhere near the spending power of the Boomers or the individual incomes of Gen X, but they’re going to be a major driving force for future retailers. Their rates of home ownership are lower than the Boomers and Gen X, and their student loans are higher – they’re more likely to have a university degree.

Millennials value convenience, flexibility and sustainability. And they’re prepared to pay for it – particularly when it comes to dining out and buying meal kits. Younger Millennials spend 20% of their budgets on cafes, restaurants and takeaways, compared to the 12% spent by New Zealanders aged over 30. Last year, Kiwi Millennials spent twice as much on takeaways as they did on clothing.

This demographic also embraces technology; international research shows Millennials are twice as likely to pay with their mobile phone compared to older shoppers. They are more likely to switch between brands than previous generations and you can expect to see Millennial consumers checking out prices online as they stand in-store looking at products.

Generation Z: debt-wary digital natives

Generation Z is the name for the post-Millennial generation of New Zealanders aged between 10 and 21. This is the generation that has grown up fully immersed in digital technology and are the most welcoming of new technology and innovation. Gen Zers have also grown up with the GFC looming large in their childhoods, which may be why they are more wary of debt than older generations. They have lower levels of credit card uptake compared to Millennials, and while they do have bank accounts, they haven’t yet had time to accumulate much spending power.

Most Gen Zers still live with their parents, but they value their independence. International research shows members of Generation Z are having sex later and saying no to drugs and alcohol. They are more likely to spend money on new in-home entertainment like Netflix and Spotify. Generation Z is the cohort least likely to value premium products and high-quality materials – they’re more likely to want style, great design and better customer service. This generation will play a major role in New Zealand’s retail future.

The future of your business

To help NZ business thrive and better understand how they can meet the changing needs of their customers, Paymark has developed Paymark Insights. Business analytics that can help any business make more informed business decisions. So if you want to better understand the X and the Z’s then talk to Paymark today.

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