NRF digs into Gen Z consumer spending patterns, plus forecasts 4.4% retail growth in 2026, in annual State of Retail & the Consumer event.
With Gen Z consumers gaining more spending power, marketers are adapting their practices to reach this audience. The National Retail Federation dug into some of the consumer trends for this cohort — consumers ages 14 to 29 — in its annual State of Retail & the Consumer virtual event in mid-March.
Treat Culture
Data from market research firm YPulse shows this younger group of consumers are apt to purchase low-ticket, self-care and treat products. Gen Z consumers tend to fall into a lower income group and so they are more likely to purchase smaller knickknacks, like Pop Mart’s Labubu dolls, that make them happy, MaryLeigh Bliss, Chief Content Officer at YPulse, said during the virtual event.
“They’re more likely than other age groups to say that the biggest financial priority in their lives right now is buying the things that they want,” Bliss said. “So, treat culture is absolutely a huge part of their retail behavior. Think about the trinket trend. They’re looking for accessible, unexpected, unique little pieces of joy.”
This spending pattern may be because this group of consumers feels like the future is uncertain for them and they are seeking out “moments of joy,” said Katherine Cullen, Vice President of Industry and Consumer Insights at the National Retail Federation.
“The idea of luxury and indulgence has really shifted,” Cullen said. “It’s more everyday things and everyday, more frequent treats.”
Besides age and income level, these spending habits could be due to their formative age when the COVID-19 pandemic hit. At 23%, nearly a quarter of Gen Z consumers say COVID negatively impacts their view of the U.S. economy, compared with the average of 14% of all adults citing this, according to a January 2026 survey by Prosper Insights & Analytics.
For Gen Z, the five-year plan no longer exists, said Rachel Hardy, Director of Consumer Product Marketing at Pinterest.
“Their time horizon is more over a one- to two-year period,” Hardy said. “They’re really seeking comfort, nostalgia and indulgences in those small moments.”
Brand Affinity Means Connection to a Community
Another shopping patterns for Gen Z consumers is on connection to a community or with a subculture they are part of, Bliss said. Gen Z consumers may have some part of their aesthetic that signals that they are part of some subculture, fan of a specific brand or community, and brands should lean into this, she said.
“When it comes to Gen Z, and something that all brands should understand, is what subculture, what fandom, what community really aligns with what you’re doing? Because you can really tap into that, and so much of it is about aesthetics,” Bliss said.
The Gen Z planners come to Pinterest to create their aesthetics, which culminates in a purchase, Hardy said. On Pinterest, consumers will create a mood board with their dream home or look for a festival. Often, Gen Z will take trends they see, make it their own and create a micro-trend, Hardy said.
“For brands, the best thing to do is be aware of those trends,” Hardy said. “Make sure that your customer can see themselves in the trend, and feel as though they’re going to build their own life and make it their own.”
Marketers Need to Be Transparent about AI
Gen Z shoppers are also widely adopting generative artificial intelligence into their shopping practices, such as to find new products and to compare products and prices.
And while Gen Z consumers are using AI, and know retailers are, they expect brands to be transparent about when they use AI to create marketing materials, Bliss said. Some brands have a badge if a campaign was “made by humans” or “made by AI” which resonates with this generation. In fact, misinformation is one of the top things these consumers are worried about.
“They’re becoming AI detectives,” Bliss said. “When they see something online, their instant question is, ‘Is this AI?’”
Retail Sales To Grow 4.4% in 2026
The NRF forecasts that retail sales will grow 4.4% year over year in 2026 and reach $5.6 trillion. This forecast excludes gasoline, auto dealers and restaurants. It also does not factor in the conflict in the Middle East, said Mark Mathews, NRF Chief Economist and Executive Director, Research.
A 4.4% year-over-year sales growth exceeds the 10 year average of 3.6% annual retail sales growth. (The average excludes the pandemic years of 2020-2022 when retail sales growth was much higher and atypical.)
While the economy has struggled on certain fronts, including inflation and the labor market, consumer spending has remained strong and is a key economic driver, Mathews said.
Similar to the trend in 2025, consumer spending will be bifurcated, Mathews said. This means higher income consumers are spending more and buoying the growth, compared with middle- and low-income households.
NRF projects for 2026:
- Inflation will remain above the Fed’s target, although goods inflation will be in a slightly lower band.
- A weak labor market, but unemployment remains below 4.5%.
- Consumer sentiment will not improve.
“Despite these sentiment challenges, we fully expect solid fundamentals to be the key driver of consumer spending once again in 2026,” Mathews said.
