The youngest of this generation is still in their mom’s tummies, but they will still hold enormous power over global spending habits, especially in years to come. Welcome to Generation Alpha. As you discovered in a previous article, they’re the richest, best educated, and most globally connected generation ever. But wait until you hear about their vast spending power.
How can they have vast spending power when the oldest of their generation is just entering high school? It’s simple. They heavily influence adult purchases. I have seen this first-hand. My then-six-year-old son purchased a new car for my hubby. My husband just pushed the order now button and made the payment.
Now, let’s explore just how vast Generation Alpha’s spending power is.
Some Basics About Generation Alpha
But before exploring that topic. It’s time to give you some background information about Generation Alpha. This generation was born between 2010 and 2024. So, the youngest members are yet to be born. Also, they were the first generation born in the heavily digital-driven 21st century.
Most of their parents are Millennials. However, a small percentage of them have Gen X and even Gen Y parents. About 2.8 million new Generation Alphas are born worldwide every week. Half of the Generation Alpha cohort will graduate from University and will live to be at least 100 years old. Additionally, about 2/3 of them will work in jobs that don’t exist yet.
They’re Expected to Spend About USD 5.46 Trillion
That’s right, Generation Alpha is expected to spend about 5.46 trillion by 2029. But how can they spend so much when the oldest will either be sophomores in college or just starting their careers and the youngest will be in Kindergarten? The answer to that question lies in analyzing how they learn about money.
Most Alphas learn about money from video and computer games like Roblux and Prodigy. They also learn about money primarily from the Net. These digital interactions and games are making them financially savvy at a very young age. They also mold them into consumers when they are still in school.
It Helps to Interact With Them Virtually
They may be the most brand-aware generation in history, but they prefer to do everything virtually. Companies are already taking note. So, they are developing and launching video game-like apps that educate these precocious individuals about various brands. For example, some banks are launching apps that provide the very young with financial literacy lessons.
They Follow in Their Parents’ Footsteps
If you were to go to any mall, except for perhaps the Mall of America, you may be shocked to see very few Generation Alphas there. There’s a reason for that. Most Generation Alpha members prefer to shop where their parents do. That means large bricks-and-mortar retailers like Lululemon, Sephora, Walmart, and Target aren’t going anywhere anytime soon.
These retailers are responding by expanding their brand offerings. They are also making their existing brands kid-friendly.
Generation Alpha May Just Be Too Mature To Ever Be Tweens
The term ‘tween first appeared in 1964 to describe adolescent shopping preferences and trends at the time. The term stuck for decades. However, now it may be time to retire the term as the oldest of Generation Alpha becomes teenagers. The reason is that Generation Alpha prefers the same brands (increasingly) as the older Gen Zers.
Gen Alpha Lives for Social Media
So, major retailers are turning to social media (increasingly) to target them. That’s why stores are trying to imitiate experiences found on social media for this young cohort. Gen Alpha is also socially conscious, perhaps even more so than their older Gen Z and Millennial cohorts.
Companies are responding by integrating an element of social responsiblity and environmental awareness into their brands.
Gen Alpha is Already Making its Marrk
It turns out that shopping and spending are not the only areas where the already vast and rapidly growing Generation Alpha is making its marks. Sixty-six percent of Generation Alphas are expected to purchase from socially conscious companies.
