TikTok finds and homemade gifts, trips to the mall and the endless search for “dupes” – gen Z’s shopping habits are shaking up retail in the run-up to Christmas. And with price tags climbing and brand loyalty slipping, retailers this season must work harder to earn this generation’s dollar.

Gen Z’s spending power is expected to near $12tn by 2030. But this year those aged 13 to 28 are expected to cut their holiday spending by a whopping 23% – a sharper decline compared to other generations – according to a recent PwC report.

“We have this consumer that is feeling budget constrained in several areas like credit card debt,” Kelly Pedersen, retail leader at PwC, said. “For these reasons, they are extremely value-oriented. It’s a real fundamental shift in how we think about the consumers in the industry.”

Gen Z has the highest severe credit card delinquency rate out of any generation, currently over 10%, according to the quarterly household debt and credit report by the New York Federal Reserve. Pedersen explained that these economic strains, including debt, inflation and student loans, have pushed members of gen Z to become far more selective with their spending as they weigh not only price but also the social and emotional value behind a purchase.

“It’s not just about selling products,” Neil Saunders, retail analyst at GlobalData Retail, said. “It’s about selling emotions, which sounds really soft and woolly, but it is actually important for gen Z.”

A hard sell, Saunders warns, does the opposite. A relentless “sell, sell, sell” approach can feel “soulless” and “inauthentic”, pushing young consumers toward brands, or even “dupes” – a replica of a product, often cheaper – that might feel more grounding, personal and valuable.

“You lose gen Z’s trust very quickly if they perceive a lack of value from the company,” Pedersen said. “Losing trust just means losing sales. ”

Brand loyalty is also on shaky ground, Pedersen added. Even though 59% of gen Z continue to buy from true-and-tried brands, many are increasingly open to lesser-known companies and more affordable alternatives.

“I feel like being brand-loyal is very close-minded,” Jonathan Singh, 19, a sophomore university student from Long Island, New York, said. “I wouldn’t find the best deal and I’m not going to be loyal to a brand for them to charge me $100 when I can find possibly a better-quality product for cheaper.”

Despite criticizing brand loyalty, Singh admits he’s often drawn to department stores like Kohl’s – especially when rewards points are on the table. According to Saunders, membership programs can help feed gen Z’s hunger for community. Membership programs can offer perks such as exclusive sales and releases and, in some cases, invites to events.

“It’s actually a more thoughtful approach as to how retailers connect with the customer and make them feel part of something,” Saunders said. “When gen Z is much more [budget]-constrained, that connection does make a difference if you can get them to spend with you over another brand.”

While gen Z may not be the easiest shoppers for retailers, they are giving a boost to the once-dying mall industry with approximately 58% frequently visiting malls, according to a global market research company Ipsos. In a throwback to earlier generations like gen X, gen Z views the mall as not just a shopping destination but also a place to socialize with friends, experience in-store events and have physical interaction with brands.

“I think of going to the mall as a hobby,” Holly Paik, 21, a crochet business owner, said. “Even if I don’t buy anything, it’s fun to walk around with friends and window-shop or see whatever events they might have, like pop-ups.”

Malls are capitalizing on gen Z’s search for experiences. The American Dream mall in New Jersey often brings in musicians like the Jonas Brothers and, more recently, K-pop stars including Hwasa and Taemin. Its sister establishment, Mall of America, also hosted a fan-meet with the popular K-pop girl group Katseye to celebrate a new store opening.

“Shopping should be more and more an event,” Adam Petrick, chief marketing officer of the American Dream mall, said. “It should be an experience. It shouldn’t just be ‘I’m driving down to buy a pair of socks at the Gap.’ It should be more exciting than that, and it should be something that people are able to do together.”

Recognizing gen Z’s sensitivity to price, Petrick explains how the mall “curates a collection of retailers that our consumer responds to”, ranging from luxury labels like Gucci to more affordable options such as Zara and Primark. He added that retailers have increasingly teamed up with mall management to launch more events designed to entice gen Z shoppers and promote discount sales.

“Gen Z are going to stores but they’re not necessarily buying anything,” Pedersen said. “It’s now about brand connectivity and experiences that build those loyalties, earning gen Z’s purchase. Shopping now goes beyond transactions.”

Before Singh even thinks about clicking “add to cart” or tapping his card, he jumps into a rabbit hole of research ranging from comparing brands with similar products, analyzing material quality, reading numerous reviews, hunting for coupons and even opening social media platforms. He doesn’t stop there.

“After, I will go in person to find [the product],” he said. “I want to get a good grasp of what it’s like in real life before I buy it. Even with the research, I don’t trust the initial impression of it from just being online.”

That pragmatic “hunt for the deal” has led to a dupe culture, where gen Zers unabashedly seek cheaper lookalikes rather than brand-name originals. According to the report, about 82% plan to purchase dupes, which are not counterfeit goods, but rather products that may resemble an expensive item at a more affordable price.

“Dupes have become culturally a part of self-celebration,” Pedersen said. “This is a great treasure hunt for them, like ‘look what I found’, but they’re less enthusiastic about buying dupes for gifts.”

Singh’s friend prided himself on snagging a pair of Chinese AirPod dupes that were not even a quarter of the original’s price. Both Singh and his friend, however, refused to ever gift a dupe.

Even though gen Z cares deeply about the sustainability and social concerns behind a product, Pedersen explained: “They are not willing to pay more for it.”

“As much as I tell other people to shop with brands who are sustainable and from small businesses, I don’t have the means to do it myself,” Paik said. “If sustainable brands can make their products much more affordable, I would definitely consider shopping there more often.”

Some are even planning to gift homemade items such as crocheted knickknacks and experiences for the sake of affordability.

“A gift isn’t all about money but rather the love and care you put into it,” Nicholas Asiedu, 21, an office assistant, said. “Sometimes I love to gift a lasting memory, like I often take my girlfriend on a trip to a museum. Memories are worth more than a gift.”

“I find that my friends are more appreciative of a gift that takes time,” Paik said. “When I crochet something for them, it’s much more personal to them and their interests. It’s also more affordable [for] me so that’s a plus.”

Saunders notes gen Zers who gift homemade items or experiences are still a niche subgroup. He anticipates a majority of the generation to spend intentionally during the holiday season, balancing cost, value and emotional sentiment.

“This is the future generation,” he said. “Retailers have to be focused on them for the here and now. If you don’t understand gen Z and you’re not capturing their loyalty or attention, you are storing up problems for the next 10 to 20 years.”