Gen Z has pioneered the act of doomscrolling, but now they’re leading the way in a new trend: “doom spending” as a means to cope with what they see online.
According to a new report from the consulting firm Simon-Kucher, Gen Z has seen a massive increase in year-over-year holiday spending, even though many can’t afford it. Researchers have dubbed this “doom spending,” or buying things you can’t afford to experience short-term gratification.
The study says that, like doomscrolling, Gen Z has resorted to doom spending as a coping mechanism because they don’t feel positive about the future.
“I didn’t coin the term, but I found it very interesting,” Shikha Jain, a Simon-Kucher partner who worked on the report, shared.
Jain says that, like those who are constantly on their phones, those who are doom spending are doing it to deal with stress.
“It involves impetuous purchases that offer this short-term delight but can cause long-term financial strain,” she said. “It’s more than just impulse buys or retail therapy.”
The survey found that even if they can’t afford it, Gen Z holiday shoppers plan to spend about 21% more than they did last year.
Compared to other generations, Baby Boomers planned to spend about 6% more, Gen X planned to spend 5% more, and Millennials were the closest to their counterparts, planning to spend about 15% more.
Jain shared with USA Today that the trend is something to raise a red flag about because it isn’t ordinary.
“But the fact that it’s such a jump from last year to this year says that it’s very much a more recent thing,” Jain said.
With everything going on in the world, researchers say that buying gifts for loved ones beyond their budget is one way to give themselves positive feedback after receiving so much negative information while doomscrolling.
“All of these negative events and constant fear and literally doom and gloom that younger consumers are exposed to – geopolitics, macro-environment, local and social news – they just grew up in a very non-sheltered life compared to other generations,” Jain said of Gen Z. “They don’t have many ways to self-soothe or cope.”
The survey included responses from 1,000 US consumers.