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The Economist January 21st 2023 53 Business Young consumers Buying time Y oung people have always perplexed their elders. Today’s youngsters are no different; indeed, they are baffling. They have thin wallets and expensive tastes. They prize convenience and a social con- science. They want shopping to be at once seamless and personal. They crave authen- ticity while being constantly immersed in an ersatz digital world. As they start spend- ing in earnest, brands are trying to under- stand what these walking paradoxes want and how they shop. The answers will de- fine the next era of consumerism. Their absolute numbers are formidable. The European Union is home to nearly 125m people between the ages of ten (the youngest will become consumers in the next few years) and 34. America has anoth- er 110m of these Gen Zs and millennials, a third of the population. The annual spend- ing of households headed by American Gen Zs and millennials hit $2.7trn in 2021, around 30% of the total. A good place to start dissecting the psy- che of young consumer is to consider the economy that has moulded them. At one end of the scale, today’s 30­somethings came of age in the midst of the global fi­ nancial crisis of 2007­09 and the ensuing recession. Their younger peers had a bit more luck, beginning their careers in years when tightening labour markets had push- ed up wages. Until, that is, the covid­19 pandemic upended many of their lives. These two big shocks have fostered pes- simism among the young people who ex- perienced them. A study by McKinsey, a consultancy, published in 2022, found that a quarter of Gen Zs doubted they would be able to afford to retire. Less than half be- lieved they would ever own a home. Uncertainty about the future may be encouraging impulsive spending of limit- ed resources in the present. The young were disrupted more by covid than other generations and are now enjoying the re- bound. According to McKinsey, American millennials (born between 1980 and the late 1990s) spent 17% more in the year to March 2022 than they did in the year be- fore. Despite this short­term recovery from the dark days of the pandemic, their long- term prospects are much less good. Amer- ican millennials and Gen Zs have accumu- lated less wealth than Gen X or Boomers at the same age. Easy access to means of spreading pay- ments may encourage splashing out (see chart 1 on next page). According to another survey by McKinsey in October, 45% of Europeans in their teens and early 20s planned some kind of splurge in the next three months whereas 83% of Boomers, born before 1964, said “No” to such profli- gacy. Forrester, a market­research firm, found that most users of “buy now, pay lat- er” apps are around 20. Megan Scott, a 20­ year­old student from London, speaks for many of her peers by admitting that, when shopping, she has no restraint—until, she chuckles, the bill arrives. In many ways youngsters’ shopping habits, like their lives, are defined by the “attention economy”—buying stuff online They are woke, broke and complicated. Businesses should take note → Also in this section 55 Mexico’s electric­car ambitions 55 China’s easing techlash 56 Bartleby: Pointing the finger of blame 57 India’s struggling startups 58 Schumpeter: TSMC’s chip diplomacy 012