By Amal Ahmed, Director of Financial Services and EMEA Marketing at Signifyd

Gen Z represent $300 billion in direct purchasing power, and this will only expand as they get older. In contrast, older generations are more stagnant in their spending, somewhat due to the fact many pensioners are on fixed incomes. Despite representing considerable spending power, our data has revealed that Gen Z are cautious when it comes to money, and their returns behaviour is just one example of this. Returns negatively affect the bottom line of businesses, who often have to cover the costs for returns expenses such as shipping and warehouse space. Because of this, its important that retailers understand the motivations driving Gen Z returns so they can better align to this growing demographics behaviour and “ ultimately “ reduce costs. Its in this evolving landscape that we conducted a survey in partnership with OnePoll, of 8,000 Europeans (2,000 surveyed in UK, Italy, Spain, France) that found 55% of Gen Z said they would return gifts, compared to just 13% of those aged 65+. Stereotypes would have us believe that Gen Z are more likely to return gifts and purchases based on their impulsiveness and love of instant gratification: a previous article reported 60% of Gen Z shoppers have made a non-planned purchase in the moment. This implies theres some rashness involved in Gen Z purchases. But is the disparity in returns data simply down to a realisation they no longer want or need the products theyve purchased, ultimately driving returns? Id argue not; this assumption ignores the fact that as Gen Z enters the workforce, they show themselves to be careful and conscientious with their money, not impulsive. Gen Zs behavioural shifts align with their concerns when entering adulthood. Yes, theyre earning, but our research shows other factors influencing returns decisions, including ethical beliefs, monetary concerns, and the rise of ecommerce, all of which hold a greater role in Gen Z returns than the regret of an impulse purchase.

Gen Z are value driven

As Gen Z inherits a world riddled with challenges like climate change, recession, and ongoing geopolitical conflict, theyre meeting these challenges with ethics in mind, which not only influences their personal behaviour but what and where they consume. Over the past few years, weve seen a trend of customers choosing brands that align with their values. Data shows that 60% of Gen Z shoppers believe it is very important for brands to be environmentally friendly. Retailers are rising to this concern by promoting sustainable lines, offering carbon-neutral deliveries, and campaigning for causes close to their audiences hearts. As Gen Z continue to push for a brighter future, theyll continue to be discerning with their money, only spending on products they see as aligning with their values and need for convenience.

Gen Z are money conscious