The rise of Generation Z has changed retail forever, from the younger sector’s demand that companies speak out and take a stand on societal and cultural issues to holding brands accountable on a range of issues from diversity and inclusion to environmental impact. As the oldest members of Generation Z move into the workforce, a new study by retailer testing and decision-making platform First Insight found that they are making more shopping decisions based on sustainable retail practices than even Millennials and Generation X.
But one influential generation doesn’t have the same sustainable outlook: the study found that Baby Boomers are far less concerned with sustainability when it comes to the items they buy—even less so than their predecessors, the Silent Generation.
According to the firm’s new State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail report, 62 percent of Generation Z survey participants prefer to buy from sustainable brands, on par with Millennials, while 54 percent of Generation X and 44 percent of the Silent Generation said the same. However, only 39 percent of Baby Boomers agreed—pointing to a vast divide between Baby Boomers and younger generations.
Generation Z is also the most willing to pay more for sustainable products (73 percent) compared to Millennials (68 percent), Generation X (55 percent) and Baby Boomers (42 percent). Half of the Silent Generation expressed this sentiment. The majority of Generation Z (54 percent) are willing to spend an incremental 10 percent or more on sustainable products, versus 50 percent of Millennials, 34 percent of Generation X, 23 percent of Baby Boomers and 36 percent of the Silent Generation.
Of note, the majority of respondents across generations expect retailers and brands to become more sustainable, according to 73 percent of Generation Z, 78 percent of Millennials, 84 percent of Generation X, 73 percent of Baby Boomers and 68 percent of the Silent Generation.
“While Baby Boomers seem to be the holdouts when it comes to expecting more sustainable practices within retail overall, the research shows that with every generation, sustainability is becoming further embedded in purchase decisions,” said Greg Petro, CEO of First Insight, in a news release. “It’s incredibly important that retailers and brands continue to follow the voices of their customers. With Generation Z on track to becoming the largest generation of consumers this year, retailers and brands must start supercharging sustainability practices now if they are to keep pace with expectations around sustainability for these next-generation consumers, whether it is through consignment, upcycling, or even gifting around major holidays.”
Other significant findings of the survey include:
Recommerce growing in popularity as majority of every generation shops secondary market
Recommerce is gaining traction across every generation with Generation Z (59 percent), Generation X (63 percent), Millennials (64 percent) and the Silent Generation (62 percent) and even Baby Boomers (52 percent) say they shop the secondary markets. When considering sustainable models:
- Majority of younger generations are buying upcycled products: The majority of younger generations including Generation Z (59 percent) and Millennials (57 percent) would purchase upcycled products made of discarded objects or materials to create a product of higher quality or perceived value than the original, whereas fewer Generation X (47 percent) and Baby Boomers (38 percent) said the same. Interestingly, the Silent Generation was more inclined to buy upcycled products than Baby Boomers, with 52 percent saying they would buy upcycled products to look stylish on a budget.
- Resale/consignment models more popular with Generation X, Millennials and Generation Z: The RealReal, ThredUp, Poshmark, and Tradesy were reported as the second-most popular recommerce models with Generation Z (46 percent), Millennial (48 percent), and Generation X (46 percent) reporting they use these services. Baby Boomers (39 percent) and the Silent Generation (22 percent) are using them less, but still more than other recommerce models.
- Clothing swaps and peer-to-peer marketplaces least popular model: While moderately popular with Millennials (24 percent) and Generation Z (29 percent), clothing swaps are not as widely adopted as other recommerce models, with less than 20 percent of Gen X, Baby Boomer and the Silent Generation respondents reporting using them. Peer-to-peer marketplaces like Storr and rentals are least popular overall, with less than 10 percent of respondents reporting using them.
All generations rank quality over environmental concerns on reasons they shop sustainable brands
When asked why respondents shop sustainable brands, quality ranked higher than environmental concerns across every generation. Seventy-eight percent of Generation Z, 85 percent of Millennials, 81 percent of Generation X, 83 percent of Baby Boomers and 70 percent of the Silent Generation ranked quality as important. While both factors were rated as important, environmental concerns ranked lower, with only 70 percent of Generation Z, 71 percent of Millennials, 70 percent of Generation X, 72 percent of Baby Boomers and 66 percent of the Silent Generation respondents ranking it as important.
Giving and receiving of sustainable gifts ranks most important for Generation Z
The vast majority of Generation Z believe both giving and receiving sustainable gifts to be somewhat or very important (64 percent and 65 percent respectively), with the majority of Millennials (62 percent and 55 percent) feeling the same. By comparison, older generations, including Generation X (51 percent and 46 percent), Baby Boomers (40 percent and 36 percent) and the Silent Generation (44 percent for both giving and receiving) reported fewer than half of respondents feeling the same way.
Of note, Generation Z is the most likely to return/exchange a gift that was not sustainable (56 percent) versus Millennials (44), Generation X (30), and Baby Boomers (19). Thirty-four percent of the Silent Generation respondents reported the same.
Download the full report here.
First Insight’s findings are based on the results of a U.S. consumer study of a targeted sample of more than 1,000 respondents fielded in December 2019. The study was completed through proprietary sample sources among panels who participate in online surveys.
