Headline article image Inside the latest Clearpay report on Millennial & Gen Z shopping trends

Inside the latest Clearpay report on Millennial & Gen Z shopping trends

As the UK economy recovers from COVID-19, key generational differences are emerging in consumer spending.

According to new research from Accenture Strategy and Clearpay, Gen Z spending is now 7 per cent higher than before the pandemic, while Gen X (and older) have yet to reach pre-COVID spend levels.

“This reflects the staggered emergence from lockdown restrictions in the UK in the first half of this year,” says consultant Atharva Karandikar of Accenture Strategy. “Younger workers in hospitality regained their employment, but I suspect there remained some reluctance to socialise among older people. It’ll be interesting to look at the consumer data since ‘Freedom Day’ [July 2021].”

Here are some of the top insights from Clearpay’s second The Next Gen Index report into consumer spending:

Gen Z and Millennials’ spending power is growing

Shoppers aged under 40 are becoming an increasingly powerful force in the economy. Currently, Gen Z and Millennials account for 25 per cent of the UK’s total retail spend.

However, that’s predicted to grow to 39 per cent by 2030 as more Gen Z (currently aged 9-24) enter the workforce.

Younger generations are driving retail spend

From a low in March 2020, spending by Millennials and Gen Z has recovered faster than that of older generations, and is now at or above pre-pandemic levels.

“When the UK relaxed its restrictions, spending on restaurants, food and clothing increased among younger, more socially mobile people,” says Karandikar.

Young Britons are still buying fashion, but homewares is catching up

Fashion still dominates spending using Clearpay: it accounts for 75 per cent of Gen Z’s spending and 65 per cent of Millennial spend.

However, these younger generations are increasingly buying for their homes and spending on recreation, with books, electronics and games high on the list.

Home and recreation spending is the fastest-growing category among young people; although it only makes up 5 per cent and 9 per cent of Gen Z and Millennial spending respectively, the category is growing above 300 per cent year-on-year.

Gen Z and Millennials are championing small business

Gen Z and Millennials account for almost two-thirds of spending through Clearpay on small and medium-sized businesses.

What’s more, this small-business spending is increasing. Since January 2020, consumer spend has increased by more than 900 per cent among these younger generations.

Karandikar says that retailers can help drive conversions by ensuring marketing is targeted to those groups

Buy Now Pay Later (BNPL) is on the rise

While BNPL still accounts for a small share of total consumer spend, it’s growing fast. Since January 2020, BNPL spend has grown by 360 per cent, compared to only a 4 per cent rise in spending on credit and debit cards.

Millennials were the early adopters of Clearpay in the UK, and they still account for the majority of purchases. Older generations are catching up, however, with non-Millennial BNPL spending growing by 480 per cent in the past 18 months.


  • Offer a seamless omnichannel experience

    Gen Z and Millennial consumers appreciate value for money, says Karandikar – a purchasing consideration that’s going to be even more pronounced as we emerge into the post-pandemic world.

    “They will research products online before going in store, and vice versa, which means merchants who can offer a seamless omnichannel experience will be well-placed to take advantage of the boom that will come once lockdowns end.”

  • Ensure customers know you offer Clearpay

    Millennials were the first to use BNPL, but now older generations are jumping onboard. “Gen X and older aren’t necessarily driven by budgetary constraints, but a large payment seems psychologically easier to manage when it’s split into four payments,” says Karandikar. He adds that highlighting the Clearpay cost is an important sales driver.

    Buy Now, Pay Later options are hugely popular in the lead up to the holiday season because they help customers get what they need when they want. Ensure your customers know you offer Clearpay by promoting it across your channels, including social media, emails and website. Letting shoppers know they can split payments with Clearpay can help increase conversion rates and average order value – that’s why we recommend you include it where possible.

  • Protect against supply-chain issues

    The UK continues to suffer supply-chain issues and retailers should prepare for these problems to continue up to Christmas, says Karandikar. “Managing stock levels will be crucial to maintaining customer satisfaction.”   

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Written by
Clearpay Marketing
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