Understanding the Influence of Gen Z on Household Spending

Posted by: Jeff Fromm

Each new generation to the market brings its own set of attitudes, beliefs and behaviors, which can sometimes make them feel mysterious or elusive to marketers. While new to the scene, Gen Zers do not need to fit this bill. Rather, they are resolute, smart, pragmatic and hard-working – just to name a few. It’s a result of growing up in an environment shaped by economic instability and social change.

While reaching Gen Z will be just as demanding, if not more so, than reaching Millennials, it will be enlightening and rewarding as they venture onward to change the world. And change the world they will. Gen Z is already on track to become the largest generation of consumers by the year 2020, and as we noted in our last post, they account for $29 to $143 billion in direct spending. But their impact on the market doesn’t stop there. Ninety-three percent of parents today say their children influence family and household purchases, according to a report by CASSANDRA, meaning a significant portion of overall market spend is because of these youths.

As Gen Z evangelists, we wondered, what is the actual figure that correlates to their household influence? In the same way that we calculated direct spending of Gen Z, we determined their indirect spending influence to be in the range of $116 billion to $333 billion (assuming 25 to 50 percent influence).


Once again, we used the Census Bureau’s 2016 population estimates to determine the size of Gen Z in the U.S. To determine total household spending, we looked at Consumer Expenditures for 2016 from the Bureau of Labor Statistics. However, it was necessary to make some assumptions.

First, we had to assume that Gen Z has influence predominantly for expenditures in the food, apparel and services, and entertainment categories. Second, based on the estimated number of households with children ages 6 to 17 from the Census Bureau’s 2016 American Community Survey and our total population estimates of Gen Z from the Census Bureau, we had to assume each household has an average of just more than one Gen Z child (~1.125). At this point, the statistics suggest that more than $665 billion in household spending in the categories of food, apparel and services, and entertainment can be influenced by Gen Z.

Yet, Gen Z is unlikely to influence total spending in each of these categories. And some of this spending will be on the household’s Gen Z child, which means its sum cannot be double counted (because that would be spending on Gen Z, not spending influenced by Gen Z). If we assume that the Gen Z child influences just 25 percent of a household’s spending indirectly, it means they can influence just over $166 billion per year. This number jumps to almost $333 billion if they have 50 percent influence.

While shy of the $600 billion in indirect spending figure that is often cited, this number still represents a significant sum that makes a compelling case for marketers to invest the time and energy to understand this up-and-coming consumer group.

Stay tuned for more on Gen Z’s spending influence in our upcoming white paper, publishing January 2018!

About Jeff Fromm

Although not a Millennial as defined by his age, Jeff Fromm is the Millennial Marketing Guy. Jeff is President of FutureCast, a marketing consultancy that specializes in Millennial trends, and is a contributing writer at...See Jeff's full bio.