How Gen Alpha is shaping the market
Editor’s note: Stavros Triseliotis is the strategic insights manager and Sophie Tanner is the vice president of marketing. This is an edited version of an article that originally appeared under the title “Empowered Spenders: How Gen Alpha is Shaping the Market and How Should Brands Approach Them.”
There is currently a unique opportunity for brands to formulate strategies that speak to the hearts and minds of Gen Alpha, a generation characterized by increased spending power, as well as appetite, but also eclectic and demanding tastes and a vocal and impactful voice.
Drawing on data from The Insights Family, this article explores the growing empowerment of Gen Alpha across the EMEA region. Beyond their increasing appetite for spending, we explore how their attitudes towards advertising have shifted over the past year and examine the platforms of choice for kids and parents and assess their trust in them as sources of advertising.
We also share the shopping priorities of kids and parents, decoding the elements of a successful branding campaign and explore kids and parents’ societal concerns and the causes closest to their hearts. This analysis will provide valuable insights into how to engage Gen Alpha and their parents effectively and responsibly, considering both their spending habits and their values.
The generation of influence and power: How Gen Alpha is becoming financially responsible and independent
Empowered by entrepreneurial spirit, creativity and digital fluency, Gen Alpha is quickly becoming the most independent and financially astute generation. Across the EMEA region, a significant 31% of 10-14-year-olds report earning their own money, a staggering 51% increase over just two years. This trend extends even to younger kids, with a similar number (28%) of six-to-nine-year-olds saying they earn their own money. These figures highlight that financial independence is a growing priority not just for teenagers but for a surprisingly young demographic.
Germany stands out as the EMEA region's leader in this trend with a whopping 40% of 10-14-year-olds earning their own money. Here, kids are not only financially independent but also digitally savvy online shoppers. A remarkable 74% spend most of their money online, a significant 42% higher than the regional average. Perhaps even more surprising is their interest in investment, with a staggering 79% increase in cryptocurrency ownership and use compared to the EMEA average of 24%. These behaviors exemplify Gen Alpha's entrepreneurial spirit and their advanced digital and financial literacy.
Our data reveals a heightened purchase intent among Gen Alpha. Compared to the average, they're significantly more likely to plan purchases in the near future, with categories like food and drinks (+24%), gaming (+23%) and sports equipment (+25%) showing a marked increase in planned spending over the next three months. As financial independence becomes more commonplace at a younger age, the influence of kids and teenagers on all industries will continue to grow. Therefore, it is crucial for brands to recognize them as a distinct consumer group.
Advertising to Gen Alpha and their parents
This sense of empowerment extends to Gen Alpha's attitudes towards advertising, which can spark not only heightened brand interest but also direct purchases. Notably, 40% of 10-14-year-olds report becoming more interested in a product after seeing a relevant ad. Furthermore, a significant 18% of this age group say they'd make the purchase themselves, reflecting their growing financial independence. This trend is on the rise, with a 5% increase in self-directed purchases compared to last year. While "pester power" remains a factor, with 32% of surveyed 10-14-year-olds across EMEA asking their parents for advertised products, it's even more prevalent among younger kids aged six to nine (37%).
For marketers targeting Gen Alpha, there is a unique opportunity to engage directly with kids rather than solely relying on parents. However, this necessitates responsible and balanced messaging. Traditional TV remains strong, holding onto 31% of ad viewership among 10-14-year-olds, a figure unchanged over the past year. However, digital platforms are gaining traction, with YouTube ranking second at 22%, followed by TikTok (11%) and Instagram (6.8%).
An interesting dichotomy emerges when examining memorability and usage. While traditional TV reigns supreme in terms of ad recall (31%), YouTube takes the crown for actual usage (36%). Netflix follows closely behind at 29%, with linear TV trailing at 14%. This highlights a crucial distinction: reach doesn't always translate to engagement. While TV ads leave a lasting impression, Gen Alpha actively seeks out content on YouTube and streaming platforms.
Despite their growing independence, Gen Alpha still collaborates with parents on purchase decisions. This underscores the importance of understanding parental attitudes and tailoring advertising campaigns accordingly. Among parents of Gen Alpha kids surveyed across EMEA in Q2 2024, linear TV reigns supreme in terms of trust (43%), followed by YouTube (29%) and online forums (23%). While parental preferences have remained largely stable over the past year, a noteworthy shift is the +6% increase in trust towards TikTok ads (now at 20%). Similarly, trust in billboard advertising (+3%, at 19%) and sponsorships (+3%, at 18%) has seen a slight uptick. While traditional media remains favored by parents, a gradual openness to modern channels, which likely resonate more with their kids, is emerging.
How to ensure cross-generational appeal
The key to crafting kid's products with cross-generational appeal lies in understanding what resonates with kids while simultaneously securing parental approval. Our data reveals a fascinating interplay of motivators when it comes to shopping. For 10-14-year-olds, self-expression reigns supreme, with 66% prioritizing products and brands that make them feel special. However, parental influence remains a significant factor, with a high number of kids (64%) citing their parents' approval as the second most important shopping consideration. This highlights the collaborative nature of decision-making within households. Beyond these top two factors, health and wellbeing (63%), convenience (61%), value representation (59%) and reputation enhancement (56%) all emerge as important considerations for Gen Alpha shoppers.
When it comes to buying kids' products and brands, practicality and utilitarian features take center stage for parents. Our data reveals that value for money ranks as the top shopping consideration for parents (67%), followed closely by quality (66%), convenience (64%), health and well-being credentials (64%) and brand trust (63%). On the other hand, kids prioritize features that enhance their self-image. Interestingly, well-being credentials and convenience emerge as the most important attributes for a successful product across both demographics, resonating strongly with both kids and parents.
But as important as product design is, so too is the communication of it. As discussed earlier, value representation is a significant shopping consideration for Gen Alpha, with 59% of 10-14-year-olds surveyed ranking it as the fifth most important factor. The rise of "cancel culture" in the past decade highlights this. Gen Z and Gen Alpha are driving real change by lobbying against and boycotting brands whose values don't align with their own. Understanding what matters to these young consumers is therefore crucial for crafting messaging that resonates effectively.
The Insights Family's data shows that bullying is the top concern for 10-14-year-olds (28%), followed by animal cruelty (20%) and racism (19%). These concerns highlight a strong sense of social justice among this age group. Their well-being is also a priority, ranking fourth at 17%, alongside environmental change (17%) and mental health (16%). Interestingly, terrorism has seen the sharpest year-on-year increase (up 13% to 13th), reflecting the current global climate. These future consumers are demonstrably both collectivistic, aware of global inequalities and mindful of their own well-being.
Connecting with Gen Alpha and parents is crucial for success
This generation is poised to be the most independent yet, wielding significant purchasing power and influencing market trends like no other. Brands must adapt their strategies to connect with both kids and parents, fostering trust through balanced and responsible messaging.
Gen Alpha's entrepreneurial spirit and digital fluency make them key players in the evolving market. Their concerns about social issues, combined with their desire for self-expression through products, require brands to align with their values. While parents prioritize practicality and quality, the challenge lies in creating products that resonate with both generations. By understanding the motivations of Gen Alpha and their parents, brands can craft effective campaigns that build trust, loyalty and capture attention.
The data used in this article concerns the responses of kids and parents across key EMEA markets surveyed by The Insights Family in Q2 2024. The countries analyzed are UK, Germany, France, Spain, Italy, Poland, South Africa, Turkey and Saudi Arabia.