The Z Factor: Navigating Gen Z’s Purchasing Behavior

Meet Gen Z

The generation coined ‘Gen Z’- those born between 1997 and 2012 – is coming of age in an era defined by digital saturation, economic uncertainty and social transformation. Now between the ages of 12 and 27, these individuals are digital natives with an affinity for technology and an immersive relationship with social media, where peer influence and user-generated content often show more influence than traditional advertising.

• Gen Z accounts for 40% of global consumers, with current purchasing power around $450 billion, projected to reach $12 trillion by 2030 (Source). 

Despite representing only ~5% of retail spend today, their share is rapidly increasing as they age (Source).

Gen Z’s consumption patterns reflect a complex duality. They claim to value sustainability and social impact, but their spending often tells a different story. There’s a clear push-pull between their desire for transparent, ethical consumption and the realities of needing purchases to be affordable and provide immediate gratification. 

• While many identify as eco-conscious, they frequently spend on fast, trend-driven fashion and products that prioritize accessibility and status over ethics (Source). 

This tension is further amplified by the way social media shapes consumption. 

• Gen Z wants what others have to feel included, yet quickly distances themselves from those same products once they become too widely available—revealing an ongoing negotiation between individuality and conformity (Source).

Brands looking to resonate with Gen Z consumers must carefully navigate these contradictions and position themselves in a way that addresses the complex nature of Gen Z’s values and concerns. Brands must demonstrate their ongoing efforts to balance ethical responsibility, economic pragmatism, social relevance and innovation. Gen Z has fleeting brand loyalty; they are quick to experiment and are willing to turn to a brand that offers better personalization, unique experiences and a stronger communication of their value.

Unique Characteristics, Values & Influences on Shopping Decisions

When it comes to engagement with brands, Gen Z prefers authenticity and user-generated content over polished advertising. They are more likely to interact with content that comes off as real and relatable, stemming from the fact that transparency is a key factor in gaining their trust. 

• The #AerieREAL campaign by clothing brand Aerie features unretouched photos of micro-influencers and customers styling their swimwear and other products. The campaign encouraged body positivity and successfully built a strong consumer relationship rooted in inclusivity. 

Gen Z also favors personalized experiences and gravitates toward brands that show a commitment to their personal and highly individual needs. 

• AI recommendations play a huge role in personalization for Gen Z consumers, who expect brands to leverage AI for tailored content and product customization.
• Sephora is known for delivering an enhanced and curated consumer experience through strategic use of AI. It leverages data on consumer preferences, skin type and past purchases to generate recommendations. Tools such as Color iQ, Skincare Diagnostic and Virtual Arist use AI and machine learning to help customers analyze skin needs and virtually try on products, creating a tailored and immersive experience. 

While Gen Z claims to value sustainability and ethical practices, they are also drawn to instant gratification, novelty and trend-driven products, especially those surfaced through fast-paced platforms like TikTok. In many cases, the desire for what’s new, exciting and socially validated leads them to prioritize convenience and affordability over ethical considerations. But at the same time there is growing fatigue around the endless cycle of overconsumption. 

Many Gen Z consumers express a sense of overwhelm with the pressure to constantly buy and discard, and as a result, some are beginning to adopt more intentional purchasing habits. This emerging shift doesn’t signal a complete rejection of social trends, but rather a more nuanced balance. Gen Z still wants stylish, relevant products, but increasingly looks for brands that align with their deeper values of transparency, quality and ethics. Ultimately, Gen Z’s consumption is defined by this tradeoff between their aspirational values and the realities of cost, convenience and cultural pressure. Brands that acknowledge and help navigate this contradiction are best positioned to build lasting relationships with this audience. 

• There is a gradual transition toward Gen Z consumers investing more in high-quality, ethically produced and sustainable products, despite being price-sensitive (Source). 

Reformation is a Gen Z favorite in sustainable fashion because it offers fashion-forward styles while using ecofriendly fabrics and tracking environmental impact. Its bold tagline “Being naked is the #1 most sustainable option. We’re #2” resonates with value-driven consumers and helps justify its more premium price point.

Since Gen Z is typically early in their professional careers, they are price-conscious consumers who hold affordability as a central concern when making purchasing decisions. Inflation and rising costs have heightened this mindset, driving preferences for deals, discounts and other budget-friendly shopping options. However, Gen Z and Millennial consumers report improved financial situations from new income streams that may influence discretionary spending. 

• 48% of Gen Z reports having a side hustle as an extra source of income (Source). 

Nonetheless, they continue to remain wary of economic fluctuations that encourage increased savings and investment in second-hand and resale markets. This reflects a generation that is deeply pragmatic in where it chooses to invest, and brands must actively prove their value in both positioning and pricing strategy. 

Gen Z is also leading a shift toward more flexible payment options, preferring digital wallets and gravitating toward Buy Now Pay Later (BNPL) services (Source). However, this may change in the near future with scoring company FICO announcing that BNPL plans will begin affecting credit score, posing risk to consumers who do not pay the loans off in a timely manner (Source). It is important that brands stay aware of and adapt to evolving economic concerns for this generation. 

• Take Urban Outfitters, Sephora, Target and Amazon as examples. These brands currently attract consumers through digital wallets and BNPL services.

Shopping Preferences & Channels

Gen Z consumers are largely omni-channel shoppers who will cross back and forth between digital consumption and brick-and-mortar shops as they move toward a purchase decision (Source). While many consumers will make their purchases online for their convenience, the turn to physical stores is often driven by a desire for instant gratification and in-person interaction with products. The draw toward brick-and-mortar emphasizes the idea that Gen Z shopping isn’t simply transactional—it’s an experience. They are attracted to pop-up stores and exclusive shopping events, which create a blend of online and offline experiences and tap into Gen Z’s love for discovery and status. (Source). 

• Over half of Gen Z prefers shopping in-store for the tactile experience, but the majority frequent online shops before purchasing to compare a wide range of products at different price points (Source).

As seen on Bella Hadid and trending on TikTok’s For You Page, the brand Tankair had built a strong online presence out of Los Angeles, despite having no permanent storefronts. Recently, they opened a temporary pop-up store in New York City, which allowed consumers to interact with the brand in another dimension and share digital content from this limited-time experience.

Gen Z is composed of mobile-first shoppers. Smartphones dominate 73% of online shopping, emphasizing the need for brands to provide mobile-optimized experiences. Google remains the primary search engine (Source), but among marketplaces, Amazon leads with Millennials and Gen Z. Gen Z demonstrates an intentional interaction with Amazon. 

• Aligning with their desire for transparency, the more details that are provided on Amazon (especially in bullet-point format) translates to a higher likelihood of purchasing (Source).
• Amazon Badges such as “Amazon’s Choice” and “Best Seller” are highly influential in gaining Gen Z trust in the product and brand (Source). 

At the same time, Gen Z is driving the rapid expansion of social commerce, which poses a threat to Amazon’s lead. Social media platforms like Instagram, TikTok and YouTube are primary product discovery hubs, with increasing in-app purchases as well. Within these social platforms, Gen Z is specifically drawn to short-form influencer videos, particularly TikTok videos or Instagram Reels. They are more likely to be influenced by their peers or influencers who portray an aspirational lifestyle on social media than messages coming directly from brands. 

• Nearly 57% of Gen Z will purchase a product based on an influencer’s review (Source).
• 32% recently gained a newfound trust in a brand due to an influencer’s input (Source). 

Loyalty & Brand Engagement

Brand loyalty for Gen Z is both fluid and value-driven, shaped less by legacy and more by a brand’s ability to stay socially relevant and align with a consumer’s ambitions. Traditional loyalty programs that rely on point systems or repeat purchase incentives tend to resonate more with older consumers; in contrast, Gen Z responds more strongly to experiential value, social validation and authentic engagement. Community-driven commerce and a commitment to social missions will boost brand affinity, as well as interactive gamified features that invite participation and engagement. 

• 62% of Gen Z state they will experiment with new brands regardless if they have a favorite brand or not (Source). 

Strategic Recommendations for D2C Brands Targeting Gen Z

Optimize Shopping Experience

• Ensure mobile-first design with interactive features and fast, seamless checkout.
• Invest in AI-driven personalization for marketing and product recommendations.
• Ensure a seamless omnichannel experience for consumers to discover, evaluate and eventually purchase. 

Embrace Ethical & Transparent Practices

• Highlight sustainability efforts, fair labor and social justice initiatives in marketing and product info.
• Provide transparency surrounding product origins and impact data.

Foster Community & Social Connection

• Build brand communities that resonate with Gen Z ideals and personal goals.
• Leverage social commerce and influencer partnerships with authentic, relatable content.
• Support small, local and minority-owned initiatives to align with social priorities.
• Practice social activism when your brand has an authentic position on a societal issue. Gen Z is quick to spot/call out when brands try to play both sides of the argument in order to be favorable (Source).

Adapt to Economic Sensitivities

• Offer deals, discounts and value bundles without compromising brand quality.
• Promote second-hand, rental or resale options when applicable.

Avenue Z works with a wide range of client accounts targeting Gen Z audiences, helping brands break through the noise and build lasting relevance with the next wave of consumers. 

Talk to the experts at Avenue Z to turn Gen Z insights into meaningful action.

Additional contributions by Elizabeth Crate.