Retailers and industry analysts predict shoppers will be tighter with their wallets in 2023, given continued uncertainty around the global economy.
But some sneaker brands like Nike are deliberately targeting Gen Z and their supposedly frivolous spending habits to help bolster sales.
Analysts believe young adults are causing a boom in luxury goods sales, as nearly half still live at home with their parents. Gen Z also spent big over the holiday season, Insider previously reported.
"We're really focused on the Gen Z consumer in China, we saw a very good response from the Gen Z consumer who wants the most innovative products and wants brands that are globally relevant," Nike CEO John Donahoe said on CNBC's Closing Bell this week.
On the company's December earnings call, Chief Financial Officer Matt Friend said Gen Z demand for Nike products on the Chinese shopping site Tmall increased 45% on Singles' Day, the annual shopping holiday.
Donahoe specifically mentioned local iterations of the Air Force 1 and Dunk that better resonate with Chinese and younger consumers. Nike footwear sales in China grew 11% to $1.3 billion in its latest quarter, while total sales in China dropped 3% over 2021.
Despite a rise in popularity of Chinese brands like Anta and Li Ning, Donahoe said Nike is still the "number one cool and favorite brand in Shanghai and in Beijing."
The semiannual Piper Sandler survey of teenagers, which includes Gen Z, shows Nike and its Converse brand, and rival Adidas, atop the footwear category in the US. Nike and Lululemon are the top clothing brands.
JD Sports, the UK-based owner of sneaker store chains Finish Line, Shoe Palace, and DTLR, recently credited Gen Z for bolstering its holiday sales by 20%. CEO Régis Schultz said the generation's spending power has grown and is not burdened by monthly bills.
JD Sports and its subsidiaries sold over 2 million pairs of Nike Air Force 1s in the last three months of 2022, according to Reuters. The shoe is a staple for young Gen Z consumers.
"I think that the buying power of our customer is much higher than it used to be," Schultz told reporters, referring to Gen Z. "They don't have the utility and the rent or the mortgage to pay."
Meanwhile, Anta in mid-2021, announced a five-year strategy that includes focusing on Gen Z.
While the company is focused on basketball and running, as part of its Gen Z strategy it's also expanding product offerings in "emerging sports" the generation and more closely working with Gen Z celebrities such as motorcycle racer Wang Yibo and freestyle skier Eileen Gu.
