Spending Pattern.. the Paradigm Shift!

One of the fields that garners the most attention during any time of the year is finance, mainly because it affects all, and never seems to stay constant. The financial graph of any country will show major highs and lows holistically, spread over a period of time. The people who suffer through these events end up living financially very different lives than those who never got affected by it. For instance, the people who lost all their life's savings in the great depression never felt secure enough to start investing or trading again, whereas the younger generation of today is increasing their spending on mutual funds, SIPs, and other investing platforms. While the great depression is a thing of the recent past, we are currently amidst another financial change. The pandemic.

With constant lockdowns in place, shut down of transportation, halt in the entertainment industry, and similar domino effects around the world, the economy has suffered in most countries. The effect can be seen across age groups. The most interesting of all is Generation Z, or the GenZ and their spending. Every marketer's favorite, the GenZ lifestyle included living life to the fullest. They believed in spending more and saving less while focusing on the present. If we look at their wallet breakdown, their spending usually includes entertainment, fashion, and the like. However, the pandemic has made them take a U-turn on this lifestyle. GenZ has started becoming serious about finances as they are spending more on healthcare facilities, insurance, savings, and investing. However, they have not yet completely given up on the idea of splurging. The psychology of GenZ is such that during these tough times, splurging has made them feel happier. The only difference now is that while they are going on a shopping spree, they are also investing in savings, in hopes for a safer future. 

Millennials on the other hand have considerably reduced their spending on food and clothes. This is because millennials are buying long-term products, which includes cars and houses, while also spending more on insurance and groceries for a healthy life. They have also shifted gears and have started investing in online courses to further secure their jobs due to ambiguities created by unemployment during the pandemic. Fitness equipment and at-home gym items are also catching the attention of millennials. 

In several countries, with aggressive vaccination drives, marketplaces and services are opening up to pre-pandemic levels. Vacation spots are reopening, which had come to a screeching halt during the pandemic, restrictions are being relaxed for several activities, including theatres, swimming pools, and the like. How much will this affect consumer behavior? Will this again impact the way people have started investing in healthcare, or will we get to see a new combination of investment portfolios and buyer behaviour like never before? The answers to these questions remain to be seen.

Be it millennials, GenZ, or boomers, across age groups, insurance and healthcare have seen a steady rise in expenditure. People are becoming more aware of the necessity of having insurance to protect them from an oblivious future. Freshers in various fields are reducing unnecessary costs to start investing in insurance from an early age. A country that majorly believes in FDs to save money has started shifting its focus to various investment portfolios. All the effects of the pandemic on finance may not come out at once, but slowly and steadily we are observing changes across sectors and age groups.

What remains to be seen is how much more impact will these separate generations have, and how will brands and other organizations respond to these shifts.

The Constant Change is Always Here!