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November 10, 2025
How Can Retailers Crack the Gen Z ‘Riddle’?
With a recent PwC report referring to Gen Z shoppers as having become a “riddle that many retailers can’t quite crack” in the lede, it may come as little surprise that this generation of consumers was referred to as highly paradoxical as compared to their elder counterparts in Gen Xers, millennials, and baby boomers.
“Their arrival in the consumer marketplace coincided with the explosion of smartphones and social media — and with economic headwinds like inflation, rising interest rates, a tough job market and the resumption of student loan payments,” the PwC report’s authors wrote.
“The result is a generation defined by contradictions. Gen Z is digitally native, yet drawn back to physical stores. Fiercely brand-aware, yet ready to abandon brands for private labels. Cautious with money, yet quick to spend when the purchase carries emotional weight,” they added.
A few other data points stood out in the earliest portions of the report:
- Gen Z is expected to hold $12 trillion in spending power by 2030, per NielsenIQ and GfK projections.
- Zoomers indicated plans to slash holiday spending by nearly a quarter (23%) this time around, though whether they follow through on that game plan remains to be seen. Gifting is slated to fall by 30% (to $586), travel by 21% (to $504), and entertainment by just 3% (to $267), representing an average estimated spend of $1,357. Millennials plan to spend $2,190, Gen Xers $1,483, and boomers $1,180 this season.
- The vast majority (82%) of the fashion-forward Gen Z generation stated that they planned to buy dupes this season.
- A similar cohort (79%) of zoomers wait for products to go on sale, with only 21% regularly ponying up to pay full price for purchases. Searching for discount codes also showed an uptick in this behavior (14%), and sale browsing up by 17%, reinforcing the frugal mindset trope attached to Gen Z consumers.
Gen Z Paradox: Is it Simply Another Lipstick Effect, or Something More Nuanced?
After underscoring the fact that Gen Z would be the first rising shopper demographic to fully engage with AI tools for product discovery — and gen AI integration into e-commerce more broadly — the PwC report moved beyond its conceptualization of an “algorithmically curated” overview of the zoomer consumer to focus on their desire to stand out, but without the historical price tag attached to doing so.
“The answer to the Gen Z riddle appears to be about offering affordable affluence. This is like the lipstick effect, something that appeared in the aftermath of 9/11 and again in 2008, updated for the social media era. Micro luxuries like a pricey matcha, a resale sneaker drop or cosmetics that double as skincare can telegraph cultural relevance without breaking the bank,” the authors suggested.
“But to stay in the ‘must-buy’ category, these items need more than aesthetic appeal. They need to feel smart — endorsed by creators, justified by value transparency and surfaced through algorithmically tailored feeds,” they added.
Perhaps a far cry from previous retail eras in which customer loyalty is often spoken of as something which crystallized, perhaps even in generational terms in some cases — Gen Zers appear ready to “ghost” brands on a whim. Forbes contributor Greg Petro made this claim, saying that zoomer fashion shoppers were quick to drop “tarnished” brands, and then added that brand responsibility (and image) were of prime concern to younger Americans.
“For most Gen Z’ers, customer loyalty has to be earned, and even then it is fragile. According to a report by the Dynamic Sustainability Lab at Syracuse University, 81% of Gen Z consumers ‘have changed their decision to buy a product based on brand actions or overall reputation,’” Petro stated.
Discussion Questions
Is it accurate to describe the Gen Z consumer cohort, in broad terms, as a ‘riddle’ or a ‘paradox’? Why or why not, in your opinion?
What can retailers do to appeal to both sides of the Gen Z equation when it comes to seemingly oppositional desires? Are there any brands you can single out as already doing a good job in this regard?
Which retailers are well-positioned to capture Gen Z spend, in your opinion, but which are failing to capitalize? What concepts or execution-related standards are they missing?
Poll
Loading …BrainTrust
Ian Scott
Director, Ian Scott Retail Consulting Ltd
Carol Spieckerman
President, Spieckerman Retail
Georganne Bender
Principal, KIZER & BENDER Speaking
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As interesting as they are, many of these trends are not exclusive to Gen Z. Almost every age cohort is making trade-offs and prioritizing certain products over others. Almost every cohort is switching into private label. Almost every cohort is using social media more to discover products. Almost every cohort is judging spending more on emotional value for money. What does demarcate Gen Z is their desire to have deeper connections with brands through being creators, influencers and seeing companies play a part in cultural moments.
This is a hugely frustrating perspective, but seeing that the report is from a management consultancy, it doesn’t surprise me at all.
Gen Z is two billion people, why do we insist on grouping them together and treating them like a single person?
There is no paradox, within this group there are individuals with different tastes and preferences.
So what if they are digitally native?My Dad is 86 and does everything on a smart phone. Equally, they are socially engaged? My grandparents were banning the bomb in the 60’s.
What you are describing is the behaviour of the youngest generation…just like every youngest generation before them.
Stop grouping them this way. Who decided when Gen Z starts and when Millennials ended? A management consultancy, McKinsey this time not PWC.
Marketeers would be more effective if they invested time and effort into understanding shopping missions, not whether the shoppers is Gen Z or Millennial or Boomer.
Agree on your take.
? ““Their arrival in the consumer marketplace coincided with the explosion of smartphones and social media ”
20 years ago [2005] myspace was starting its peak phase.
The majority were not 0-8 yr olds.
[Zuckerberg had changed Facemash (2003) into Facebook in early 2004]
Smartphones reached majority use in the USA by 2015. (not a “Z” revelation).
The cutesy gen names are a distraction to the real work being done by retailers, marketers, buyers, merchandisers, et al.
Life stages and interests and needs have always been deeper than numeric birth year.
Ian, you literally gave me a new way of thinking, seem i will be out of this so called Genz, X, Y , Alfa thing. The way dynamics are chaning globally, i can feel that all data published or guessed today for future will vary drastically
I don’t think there’s any riddle here. Physical stores continue to be dominant for many good reasons and do better if well supported by savvy digital work. Perhaps the riddle is why so many consultants try to claim there’s a problem. As Gen Z increases its spending power retailers will do well by…treating them as consumers.
Maybe it’s the way this was phrased, but it doesn’t sound very much like a riddle to me; it sounds like young people – or people of any age group really – who don’t have a lot of spending power…what they spend they spend carefully.
I don’t think there’s much of a riddle here. Gen Z is value-driven and quick to switch brands when something stops delivering, similar to other shoppers working within tighter budgets. They’ll show up for retailers that offer value and transparency, but they won’t stay out of habit.
Too many assessments of Gen Z assume innate preferences and habits. If Gen Z seems to be a riddle, it’s largely because of the options now available to it. With optionality comes complexity. Retailers and brands are shaping choices and behaviors, not just scrambling to react.
Retailers can employ innovative marketing techniques such as leveraging social media platforms like TikTok and Instagram to engage with Gen Z through authentic and relatable content. Additionally, incorporating sustainable and ethical practices into their business models can attract Gen Z consumers who value social responsibility. Brands like Glossier and Patagonia are already excelling in this area by creating inclusive campaigns and championing sustainability, respectively.
Didn’t marketers go through similar calisthenics trying to figure out Millennials? Now it’s Gen Z’s turn. Baby Boomers were there once, too. That entire generation was Time Magazine’s Person of the Year.
At the end of the day the generations really aren’t so different after all. We all use technology, and we all like to shop. Just make it easy, treat customers as individuals, and be a good corporate citizen.
Marketers would have suffered lumbar fractures with Adam’s first born….but they lacked any comparatives (not that they’d notice them, anyway).
yes,
“How Can Retailers Crack the Gen Z ‘Riddle’?”is a save-as from
“How Can Retailers Crack the Millennial ‘Riddle’?”
The Mills “gen” was as beaten & ripped apart as Z’s are.
Only Xers seemed to have escaped the trite micro focus.
Is Gen Z any more baffling to us today than Baby Boomers were to the Greatest Generation in the 1960s?
I doubt it, although the particulars are different.
I’m proud that my fellow hippies, peaceniks and counter-culturalists engendered an actual culture that, for a while, became the televised norm for a generation.
Each cohort creates its own culture, and that is itself a reflection of the communications environment that surrounds it.
When you’re very young it’s giddy fun to vex the old folks and flex your social power. The ubiquity of social media has been as much a driver in the present era as network television was in my pre-teen years.
But I think there is a crucial difference that defines today’s social-media-native young people, and it’s a paradox: As a cohort, Gen Z exhibits far greater diversity of ideas, brand preferences, values and pop culture icons. They dwell within a plethora of digital echo chambers, not a mass-media society as I did in my youth.
In other words, Gen Z members are the same in different ways. We Boomers may or may not be OK with that. I guess what goes around comes around: Six-seven.
Ian Scott and Carol Spieckerman are right to push back on this framing. PwC’s “riddle” framing manufactures complexity to sell consulting solutions to problems that don’t exist. These “contradictions” are actually sophisticated consumer behavior responding rationally to economic constraints and information transparency. Physical stores for discovery plus digital for price efficiency isn’t paradoxical; it’s intelligent omnichannel navigation. Brand awareness paired with private label switching is informed value optimization, not confusion. Retailers striving to “crack the Gen Z riddle” are actually struggling with collapsed information asymmetry. Gen Z isn’t ghosting brands “on a whim,” they’re exercising informed agency in a marketplace that finally provides transparency. The supposed “riddle” exists only for those treating audiences as captive and conditioned by pre-digital retail constraints.
It is not entirely accurate to describe the Generation Z consumer cohort broadly as a “riddle” or a “paradox,” despite the terminology used in the PwC report and the recent NielsenIQ/GfK spending‐power projection that Gen Z will hold some $12 trillion in spending power by 2030. The so-called contradictions (digitally native yet drawn to stores; brand‐aware yet willing to jump to private label; cautious with money yet willing to spend when emotionally motivated) are less enigmatic than they appear—they simply reflect a generation acting logically in a transformed retail environment (with full information, alternative channels, social media influence, and inflation). In other words: the “riddle” exists only if you assume old generational rules apply unchanged.
Given my background as a buyer—where leveraging consumer insights was a core element of assortment and promotional strategy—I firmly believe that understanding any demographic, Gen Z included, is quite feasible when you invest the time and effort to track behaviors, value drivers, and shopping missions. The key is recognizing that Gen Z’s “oppositional desires” aren’t contradictions but combinations of functional value (good price, quality, convenience) and emotional signaling (brands, experiences, authenticity).
To appeal to both sides of this equation, retailers must layer their offers: for example, deliver friction-free digital/physical experiences (mobile discovery, AR try-on, seamless click-and-collect) and enable differentiated cultural or social moments (limited drops, creator collabs, sustainability credentials). Brands such as Nike (with its SNKRS app drops + robust direct-to-consumer ecosystem) and Uniqlo (with functional values, accessible pricing, and designer/artist collaborations) stand out for executing both. On the flip side, some larger mass-market retailers appear well-positioned (broad network, data assets, brand reach) but are failing to capitalize because they lack sharp execution: inconsistent digital/physical integration, messy in-store experiences, weak rhythm of culturally relevant seasonal triggers. The missing standards are not just what they offer but how they deliver: pace, relevance, and authenticity matter.
Today, the youngest Gen Z is 13 years old. You want a riddle? What will they be like when they are 18 years old? The oldest Gen Z is 28 years old today. What will they be like when they are married and have a family in five years?
predictive analytics: has entered the chat
caveat: 13 might act like 13, and 18 might act like 18
…and by the time you solve the riddle for the 13-year-old, they will be 18-year-olds with an entirely different riddle.
This doesn’t sound like a riddle or a paradox about a specific generation. It sounds like a description of today’s much more complicated market vs a much simpler market even 5 to 10 years ago. That’s not even a generation. Today’s shopper/customer has more choices through more channels, offered by more brands/influencers with more frequency and more promotions and discounts than ever before. Thank about the magnitude of ‘more’ that’s involved here. And we’re scratching our heads about fleeting loyalty…??? About the bifurcation of the market…???
By the way, is ‘fragile’ loyalty really even loyalty…???
Gen Z is paradoxical, as they believe in idealistic, principled consumption yet the economic reality of 2025 is very much about survival and discernment.
For instance, choosing sustainable products may feel good and ‘right,’ yet fast fashion brands like Shein and Temu are so cheap and irresistible to this cohort.
Gen Zs want to save money because it’s hard to break into the job market and save up for university but, dang, those Starbucks Cranberry Bliss Bars are worth every penny.
Affordability, including affordable luxuries, is paramount to these young shoppers.
consumeredge.com 7/2/25
“Shein is particularly strong with Gen Z and has an average customer age of 35 [note: 35= millennial]
while Temu’s user base is broad, with high engagement in the 25–44 age range, and strong growth among older shoppers, including those 55 and over.”
Not just Z (13-28yo) issues. Adults are in both layoff situations + family provider positions… spelling economic trouble.
P13-21 still hold more parental protection than adults with sole or multi person financial responsibility.
Are they chasing affordable luxury as their parents are let go from white collar downsizing? The battle for saving for luxury (unearned for a 13yo) vs buying knockoff/dupes to pretend wealth.
I see more paradox with Gen Z than previous generations, supporting certain brands to align with their personal values, but ever so wanting a deal, with a strong bent towards saving and spending wisely. Retailers are wise to go beyond only offering limited time deals and sales, by using social media channels to promote exclusivity in offerings from partner brands and personalities who align best with Gen Z.