Gen Z isn’t simply another demographic for brands to target. It’s a generation reshaping how products are discovered, evaluated and bought and in doing so, rewriting the economics of consumer businesses. For companies and investors alike, the real question isn’t whether Gen Z will change the market, but who will adapt fast enough.
Gen Z is changing how consumers discover, trust and buy from brands. Ella Thomas, global sector specialist for consumer staples at Schroders, explores how this shift is reshaping loyalty, trend cycles and the future of consumer growth. (Source:
Unsplash.)
Gen Z’s digital-first approach to consumption is rewarding the most agile brands and putting pressure on established business models. For global investors and companies alike, the shift is creating both risk and opportunity.
This generation isn’t just large, it behaves differently.
From how products are discovered to how quickly trends rise and fall, Gen Z is reshaping the economics of consumer businesses. Companies that can move quickly and engage digitally are gaining ground, while those relying on legacy brand power risk falling out of step.
Below, we look at Gen Z’s growing economic influence, how social media has shifted control toward consumers, and what this means for brands trying to compete in faster, more fragmented markets.
A generation with scale and spending power
Gen Z, typically defined as those born between 1997 and 2012, now makes up roughly a quarter of the global population. Despite many still being early in their careers, they already account for about 17% of global spending.
Source: McCrindle, 2023.
At nearly 2 billion people, Gen Z is the largest generation in history and is expected to become one of the most economically influential. By 2030, their spending potential could reach $12tr.
They are also the least Western generation yet. Only around 10% of Gen Z lives in North America or Europe, and for the first time less than half of global consumer spending will come from Western markets. Growth will increasingly come from emerging economies where Gen Z populations are largest.
Source: Global Gen Z Spending Report, NielsenIQ and GfK, 2025
While Gen X and Millennials will still hold more total spending power in the near term, Gen Z is expected to drive the most incremental growth over the next decade. Their share of spending is projected to rise steadily as more of the cohort enters the workforce.
For brands, understanding this generation’s expectations and behaviours is quickly becoming essential.
Discovery is now driven by social media
Social media has long shaped how Gen Z discovers products, but the shift toward shopping directly through platforms is more recent. Covid accelerated this change, turning social platforms into full-funnel commerce ecosystems where discovery, evaluation and purchase happen in the same place.
Source: A Gen-Z report Oliver Wyman Forum, 2023
In the past, brand influence depended on large advertising budgets, magazine placements and retail shelf space. Today, that model has been disrupted. Social media has levelled the playing field, allowing smaller brands to reach consumers directly and sell without traditional gatekeepers.
Indie brands now account for roughly 30% of global beauty sales, highlighting how competitive power has spread beyond established players.
Gen Z buying decisions are increasingly shaped by:
- Algorithm-curated feeds
- Creator and peer recommendations
- Real-time product testing
- Reviews and search-led discovery
What started with long-form YouTube tutorials has now exploded into short-form video across platforms like TikTok and Instagram. Today’s consumers evaluate products through evidence-based, user-generated content rather than brand-crafted messaging.
The rise of social media and the proliferation of smaller, more agile brands have accelerated trend cycles dramatically. New products and micro-trends can gain rapid traction online. While these trends often persist in the category, the hype around them tends to peak and fade quickly. Google search data in the US illustrates just how short-lived many recent beauty trends have become.
Source: Google
Faster trends, weaker loyalty
What began with long-form YouTube tutorials has evolved into fast-moving, short-form content across platforms like TikTok and Instagram. Trends now emerge and peak rapidly, often within weeks.
Source: Oliver Wyman Forum, A Gen Z Report, 2023
This has shortened product cycles dramatically. While trends may influence categories long term, the hype around individual products fades quickly. As a result, brands must work harder to stay relevant.
Gen Z consumers are also more willing to try new brands and less likely to remain loyal to one. Social media has given them constant exposure to alternatives, making switching easier than ever.
Traditional brand-building strategies, built around long cycles and repeat purchasing, are becoming less effective in this environment.
The cost of keeping up
These shifts are changing the economics of consumer businesses:
Customer retention is becoming more expensive.
With loyalty declining, brands must spend more to reacquire or re-engage consumers. Staying visible in an attention economy dominated by short-form video requires constant content and ongoing investment.
Agility is now a competitive advantage.
Smaller, faster companies are often better positioned to respond to micro-trends and niche demand. Many multinational brands struggle to match this speed due to longer innovation and decision-making cycles.
Big-launch strategies may miss the mark.
Large, infrequent product launches designed for global scale can overlook the smaller, faster trends that resonate with Gen Z, particularly in emerging markets where spending is concentrated.
Disruptor brands are gaining ground.
Gen Z’s openness to trying new products has created space for smaller players. Brands that adopt new platforms early, engage consistently and move quickly are capturing market share.
Where winners could emerge
The outcome of these shifts won’t be the same across all companies. Some will adapt successfully, while others may struggle.
Brands likely to outperform tend to share a few characteristics:
- Fast innovation cycles
- Strong digital engagement
- Localised strategies
- Willingness to experiment with new platforms
For investors, this creates the potential for market mispricing. Some legacy brands may face higher costs and weaker loyalty than expected, while others adapting quickly could see underestimated growth.
These changes are playing out across multiple consumer sectors, from beauty and personal care to food and household products. However, the impact varies by category.
Make-up, for example, is highly trend-driven with lower barriers to entry, making it more exposed to rapid shifts. Skincare, by contrast, often requires more scientific investment and regulatory approval, providing stronger barriers and more defensible pricing power.
Understanding these differences will be key to assessing which companies can maintain growth and which may face pressure as Gen Z’s influence expands.
The bigger picture
Gen Z isn’t just another consumer group. It’s reshaping how brands grow, how quickly trends move and how loyalty is built.
As this generation gains spending power, the companies that succeed will be those able to move quickly, engage digitally and adapt locally. Those relying solely on scale, legacy brand equity or slow innovation cycles may find the landscape increasingly challenging.
For businesses and investors alike, the question is no longer whether Gen Z will change consumer markets, but who is adapting fast enough.
