Zillennials are younger millennial and older Generation Z consumers born between 1991 and 1999. They represent an important consumer segment that merchants should view as distinct from traditional generational groupings.
PYMNTS Intelligence’s latest research finds that this age group is the most likely to prefer shopping for retail products exclusively online. In some areas, such as price sensitivity when choosing a merchant, zillennials closely resemble Gen Z. In other ways, they track more with millennials. The study also reveals insights into the differences across four zillennials persona groups — budget-minded, wealth builders, free spenders and givers.
These are just some of the findings detailed in “Generation Zillennial: How They Shop,” a PYMNTS Intelligence special report. This edition examines zillennials’ preferences and behaviors surrounding online shopping and digital technologies. It draws on insights from a survey of 3,629 U.S. consumers conducted from May 9 to May 29.
Digital-First
Zillennials are more likely than other consumers to shop exclusively online and less likely to prefer physical stores.
of zillennials prefer to shop for retail products exclusively online.
Consumers have largely split into three camps in how they prefer to shop for retail products. One-third prefer shopping exclusively online, 39% prefer only in-person and 28% prefer a mix. Older consumers, particularly baby boomers and seniors, are the most likely to stick with in-person shopping. The rate of online-only retail shoppers is fairly consistent from Gen X, at 33%, to Gen Z, at 36%.
Zillennials stand out for having the highest rate of digital-only retail shoppers, at 37%. Notably, this rate is higher than non-zillennial Gen Z, at 34%, and non-zillennial millennials, also 34%. Similarly, zillennials are the least likely to prefer to do all their retail shopping in person, at 29%, versus 32% for non-zillennial Gen Z and 32% for non-zillennial millennials. Although these differences are modest, they underscore the value of viewing zillennials as a distinct cohort.
Zillennial persona groups
For this report, PYMNTS Intelligence uses the following persona groups:
Budget-minded: 47% of zillennials
Would spend extra money on essentials such as groceries, bills or debt
$64,000 average annual household income
Wealth builders: 37.3% of zillennials
Would save or invest extra money
$81,000 average annual household income
Free spenders: 10% of zillennials
Would use extra money to buy or do something fun
$82,000 average annual household income
Givers: 3.8% of zillennials
Would donate extra money to charities or gift it to friends or family
$106,000 average annual household income
PYMNTS Intelligence has defined four distinct personas for this generation — budget minded, wealth builders, free spenders and givers — based on how each respondent would use an unexpected windfall equal to half their normal monthly income. These groups vary substantially in their retail shopping preferences. For example, 39% of the budget-minded group prefer to shop both online and in person. This likely reflects their willingness to seek out the best deals. Just 15% of givers do the same, while 53% of this group shop exclusively online.
Purchasing Decisions
More than three-quarters of zillennials say that ads and personal recommendations influenced their retail purchases in the past month.
of zillennials say that recommendations from friends or family influenced their retail purchases in the last month.
Consumers make purchasing decisions based on a range of factors. The study finds that recommendations from family or friends top the list, with 30% of individuals reporting that this influenced at least one retail purchase in the last month. Personal recommendations carry considerably more weight with zillennials, at 39%, and Gen Z, at 42%, than other generations.
Social media ads follow the same pattern, showing the greatest reach among Gen Z, at 39%, and zillennials, at 35%. Other key factors for zillennials include celebrities and influencers, tailored digital recommendations and website ads. Overall, the data shows that zillennials are active shoppers and can be influenced through a variety of channels.
Applying the zillennial persona lens reveals further insights about how retailers can best reach zillennials. Personal recommendations have a strong influence for all personas but matter the most for budget-minded zillennials, at 42%. The budget-minded group also reports higher than average impact from online articles and tailored digital recommendations. Social media ads meanwhile have outsized pull with the wealth builders, at 38%. These findings are important for retailers targeting either segment or zillennials as a whole. Budget-minded and wealth builder zillennials account for the lion’s share of the cohort, at 47% and 37%, respectively.
Price Sensitive
Zillennials heavily prioritize better prices over brand selection when choosing merchants.
of zillennials prioritize price when they choose a retail merchant.
When it comes to choosing merchants for retail products, consumers across all age groups tend to prioritize better pricing. Zillennials and Gen Z prove to be the most price sensitive. For example, 41% of zillennials say that pricing is more important than the availability of brands they prefer. Just 21% say the opposite. This pattern holds true for Gen Z, but the portion of millennials who focus first on price drops to 36%. Interestingly, older consumers are substantially less likely to say that brands matter most. Starting with millennials, larger shares weigh the two factors equally.
In short, zillennials and Gen Z have the largest segments of both pricing-first and brand-focused shoppers. This may reflect polarization in lifestyles and financial dispositions among these younger consumers. Pricing unsurprisingly carries extra importance for the budget-minded zillennials, with 45% citing this as their top consideration. In contrast, only 17% of budget-minded zillennials name brand availability as the top factor. Wealth builders and free spenders still tend to prioritize pricing, but sizeable shares focus first on brand. Givers, meanwhile, are much more likely to name brands as the biggest factor in their retail merchant choice.
Group Identity
About three-quarters of zillennials consider themselves typical of their generation.
of zillennials say that their generational group is at least a somewhat important part of their identity.
Consumer research often analyzes results by generational cohorts — yet how consumers themselves view these groupings rarely enters the conversation. This study finds that 77% of consumers consider themselves typical of their generations, with relatively little variation across age groups. Older consumers are more likely to agree, with 82% of baby boomers and seniors and 81% of Gen X saying they at least somewhat typify their generation. While it drops to 72% for millennials and 71% for Gen Z, zillennials are slightly higher at 73%. Among zillennials, givers and free spenders show somewhat higher rates than their wealth builder and budget-minded peers.
The study also asked consumers about the importance of generational groups to personal identity. Overall, 57% of respondents rated this as at least somewhat important, with higher rates among younger consumers. Zillennials, at 61%, fall between Gen Z and millennials. Among the generations personas, the rates are again highest for givers and free spenders. Overall, these findings on the relevance and importance of generational identity suggest that businesses could appeal to consumers, particularly younger ones, with messaging that takes this into account.
Conclusion
For retailers and other businesses that aim to reach the increasingly important zillennial segment, understanding when and how these consumers differ from their Gen Z and millennial peers will be crucial. More than any other age group, this generation embraces online shopping and relies less on physical stores. They indicate that personal recommendations play a larger role in their shopping decisions than is the case for millennials, but less so than for Gen Z. Differences within zillennial cohort can be equally important. The persona groups reveal key variation — and sometimes polarization — that retailers should understand as they reach out their target segments.
Methodology
“Generation Zillennial: How They Shop,” a PYMNTS Intelligence exclusive report, is based on a survey of 3,629 consumers conducted from May 9 to May 29. The report examines behaviors and preferences surrounding digital technologies and online shopping for older Generation Z and younger millennial consumers. The study includes a census balanced poll of 2,623 U.S. consumers plus oversampling of 1,006 more consumers born between 1991 and 1999 to facilitate deeper analysis of the zillennial generational group. Population weights are utilized to ensure analysis remains representative of the U.S. adult population.
Read the May 2024 report, “Generation Zillennial,” for more.