Small businesses that want to thrive need to understand not only who their customers are today—but also who they are likely to be tomorrow. A report from Circana says that although baby boomers and Generation X currently dominate retail spending with a combined 65% share, millennials are poised to become the wealthiest generation in history as a massive transfer of wealth reshapes the economic landscape.
Circana projects that by 2030, Generation Z & millennials will dominate the U.S. population and drive 60% of retail sales growth. However, boomers will still continue to hold significant influence in the market.
The Alpha Influence
Of course, you can’t overlook the younger generation. Generation Alpha (mostly the children of millennials) is the largest and most digitally savvy generation yet. And their economic impact is already valued at $1 trillion globally.
Writing on her After School/Substack, Casey Lewis notes that Gen Alpha is “redefining family influence. “Household decision-making is now more collaborative, with kids shaping—and often leading purchasing decisions around everything from meals to media. Lewis says that 77% of millennial parents say their children have more sway over family purchases than they did at the same age.
Older alphas (teens) are also suffering from the affordability crisis. According to Piper Sandler’s Fall 2025 Taking Stock With Teens survey, teen spending has fallen to its lowest point in a decade, dropping 6% year-over-year to $2,213. (The Spring survey will be out next month.)
The survey reports that a record number of teens—62%—think the economy is worsening. Even upper-income teens spent less last fall, with off-price retailers and Walmart gaining market share.
Gen Z Behaviors
New research from Vogue and Archrival reveals, somewhat surprisingly to many, that young adults aren’t all about online shopping. The report shows they’re “rejecting frictionless social-commerce shopping because it feels ‘mindless,’ ‘less of an event,’ and overly algorithmic.”
Instead, Gen Z is embracing resale, experiential retail, and “intentional micro-friction,” with 70% interested in in-person brand activations. They still discover products on social media—particularly TikTok (92%), YouTube (88%), Instagram (87%), and Pinterest (85%).
Nielsen reports that Gen Z is very health-conscious—and that their ‘health-conscious’ value system shows no signs of slowing down in either the mid- or long-term. This, says Nielsen, is another key growth area for manufacturers and retailers.
This attitude impacts a wide range of businesses. The research shows that when buying beauty products, Gen Z wants goods that are clean, have natural fragrances, and are cruelty-free. And when purchasing food, they want products free of artificial ingredients, low in sugar, natural, and high in protein.
Will Gen Z Be the End of Search?
It may be hard to believe, but Vogue and Archrival report that Gen Z is losing trust in search—42% think major search engines won’t exist in 10 years.
And despite their outsized projected spending power, Gen Z “is expressing emotional fatigue: 32% say they’re living beyond their means, 84% have used BNPL (buy now, pay later), and 87% believe people buy more than they need, creating a cycle of “doomshopping” where purchases trigger guilt rather than joy.”
But They’re Saving Pinterest
Vogue Business reports the “Pinterest CEO Bill Ready is taking big swings to win Gen Z.” He’s “repositioned the platform away from addictive algorithms toward what he calls, ‘AI for positivity,’ prioritizing content users save rather than just view.”
This strategy has already paid off, Vogue Business reports, as Gen Z now represents over half of Pinterest’s 600 million monthly active users, and 85% of Gen Zs say they’re likely to use Pinterest to find products.
AI Shopping Tools
PayPal reports that 61% of Gen Z shoppers used AI tools to help them make a purchase in the last year. This is underscored by a Harris Poll showing that 50% of Gen Z and 49% of millennials would hand over gift-buying responsibility to AI if it helped them avoid stress. Additionally, YouGov says that 42% of all shoppers would allow AI agents to make purchases on their behalf if they could guarantee securing the best price.
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Photo courtesy THEFUNKSHIP for Unsplash+
