'Under consumption' trend grows as Gen Z prioritises second-hand shopping

66% of Gen Z shoppers are prioritising second-hand shopping, while 90% are loyal to their favourite brands and retailers.

That’s according to the latest data insights from Pion, a "leading authority" in the consumer habits of Gen Z, which surveyed 4,000 people for its Youth Trends Report 2024.

The "under consumption" trend has taken social media by storm, particularly on TikTok, where it encourages users to consume less by repurposing what they already have.

The trend promotes mindful consumption and sustainability, however, it is also posing a challenge for retailers looking to attract Gen Z shoppers to their businesses.

The trend to make more considered purchases is also driven by growing awareness of the environmental impact of overproduction and waste​. Young consumers understand the need to reduce their carbon footprints. In that instance, sustainability is a form of accepted social responsibility, rather than just a trend.

Pion also found that 83% of Gen Z have cut down on non-essential spending this year – another red flag for retailers targeting that generation, especially if they are not in the second-hand market.

Furthermore, 77% expressed that they would be more inclined to buy from a brand that made sustainable choices.

On that note, brands such as Patagonia have long promoted "conscious consumerism", encouraging customers to buy less and repair their items instead, while Levi's has launched campaigns focusing on durability and second-hand shopping.

Intriguingly, several luxury brands have spoken about or been impacted by the underconsumption trend, with some noting a decline in sales as younger generations embrace second-hand shopping and sustainability.

That has led to a number of luxury brands adapting by partnering with upcycling businesses, such as Circle of Style - emphasising the importance of sustainability and ethical shopping.

TikTok Shop has also opened up new revenue streams for luxury brands, allowing people to shop new or pre-loved with the click of a button, "taking away the intimidating prospect of visiting a boutique" - something younger generations are reportedly less keen on.

Pion says that’s an important consideration, as its data shows that by 2035 it’s predicted that Gen Z will account for 40% of the luxury goods market.

Additionally, many young people are rejecting bad practices from fast fashion brands. Luxury brands that are more ethically sourced are quickly gaining popularity amongst young people.

Insights manager and trends specialist at Pion, Leah Doyle, suggests three key areas brands need to focus on to still capture the spending of consumers embracing underconsumption.

According to Doyle, "transparency is a valuable brand commodity", and brands should look to create meaningful marketing narratives that resonate with consumers’ values, focusing on sustainability journeys, and real life stories from customers.

There’s also a clear demand for brands to share transparent content around production, sourcing and manufacturing to build trust with their customers.

Doyle also notes it is important to make "the circular fashion economy and re-sale market is your friend". For some brands, people shifting towards pre-loved fashion is seen as a threat, but in reality it’s a opportunity to connect with the younger generation. Selfridges now has Reselfridges, for instance.

Lastly, Doyle advises to "adopt eco-friendly practices into your operation and production". She says it’s "not just about talking the talk".

Consumers focusing on underconsumption are looking for either ethical practices, or quality products that offer durability and stand the test of time, especially as 66% of Gen Z now say that poor quality is "a dealbreaker".