Gen Z consumers, once seen as free spenders, are rethinking how they shop. PwC’s 2025 Holiday Outlook shows that this group plans to cut down on holiday spending by 23% this year, even though they expected to increase it by 37% last year. Between January and April 2025, PwC’s analysis found that Gen Z reduced overall spending by 13%, mainly on things like clothes, accessories and electronics.
This might seem like a sign of financial pressure, given rising costs and tough job markets, but there’s more behind it…
NielsenIQ and GfK, in collaboration with World Data Lab, project that Gen Z’s total spending power will grow to $12 trillion by 2030. The current drop is less about saving and more about choosing where money feels worth spending.
PwC’s research found that 79% of Gen Z wait for sales and only 21% pay full price. They’re hunting for discounts and using AI tools to find better deals. This generation links spending with emotional and social value and not price. For them, the right purchase should feel smart, relevant and personal.
What Kind Of Purchases Still Appeal To Gen Z?
Gen Z is trading down on daily expenses to afford what they call meaningful indulgences. PwC’s survey shows that 51% are cutting back on eating out, 33% on clothes and 29% on alcohol. But fewer plan to give up high-value items compared to last year. They are saving in one area to spend in another, choosing things that bring joy or show identity.
One big change we are seeing is the embrace of “dupes”. These are cheaper alternatives to luxury items. PwC’s report found that 82% of Gen Z plan to buy dupes this holiday season, and 63% will look for vintage or upcycled goods. Retailers once feared these low-cost items, but to Gen Z, they represent smart choices. Affordable means resourceful to Gen Z.
The demand for “affordable affluence” mirrors what economists call the lipstick effect: small luxuries that feel indulgent but don’t cost much. With things like your pricey matcha drinks or limited-edition sneakers or hybrid skincare cosmetics, Gen Z spends on products that bring pleasure and status without straining budgets.
Are Gen Z Shoppers Buying Online Or In-Store?
It turns out they’re heading back to the shops. PwC’s analysis shows that 61% of Gen Z prefer discovering products in-store, a turnaround from expectations that they’d stay online. This is driven by experience. For them, shopping has become an event… its a chance to see and feel products, take content and enjoy store displays.
The Holiday Outlook report shows that 37% of Gen Z plan to shop in-store more often this festive season, up from 27% in 2024. Forty-one percent say they want to touch and see items before buying. Of course, though, social media is still an important part of the process and customer journey. About 43% use it to find gift ideas, 39% to research and 32% to compare items.
The journey from screen to shelf has blurred. A Gen Z shopper might spot a trend on TikTok, price-check it on an app, then buy it in-store. This means retailers need to respond faster. If a product goes viral, the shelf must keep up. Trends move in days, not weeks.
Are Dupes Safe, And Are Shoppers Aware Of The Risks?
While Gen Z is proud of their budget finds, the Which? investigation shows that dupes and counterfeit goods can be dangerous. Their research found fake hairdryers, AirPods and straighteners that looked identical to real ones but contained fake fuses and unsafe wiring. Electrical Safety First said these could cause fires or electric shocks.
Phil Lewis, director general at the Anti-Counterfeiting Group, told Which? that many fake items are made using toxic dyes, poor materials and even forced labour. Counterfeiting also funds serious crimes such as trafficking and illegal drug trade. Police raids have linked fake goods to child labour and organised criminal networks.
According to the OECD, counterfeit goods make up 2.3% of global trade. They often come from China, Turkey and Lebanon, but many are now produced closer to home and sold through online marketplaces like eBay and Temu. Although Amazon and others say fake products are banned on their platforms, Which? says it took only seconds to find dangerous counterfeits for sale.
How Can Retailers And Shoppers Adapt?
Retailers are learning that Gen Z’s idea of value is about transparency, not labels. PwC’s research suggests they can keep this generation interested through storytelling about quality, limited editions and collaborations that feel intentional. Private-label ranges can succeed if they are well-designed and feel exclusive rather than cheap.
When it comes to speed, spotting a social trend is pointless if stores can’t react before it fades. Retailers must turn social signals into quick stock and pricing decisions. For Gen Z, timing and trust is more important than tradition.
With shoppers, the advice is to buy directly from trusted brands and check prices that seem too good to be true. Genuine products cost more because they use tested and safe materials. As Which? puts it, fake goods can be unsafe but also they can fund criminal operations.
Gen Z’s spending may look unpredictable, but it resembles the new trends in what people value. This is safety, purpose and smart spending. Retailers that keep up with that will likely win their loyalty and in turn, their money.
