Shopping: Top reasons consumers overspend

Why it is the topic trending:

• A recent survey by Motley Fool Money, conducted in May 2025, reveals a significant trend in consumer spending habits, particularly among younger generations. The high percentage of Americans admitting to wasteful spending, coupled with the stark contrast in frequency between age groups, highlights a relevant and timely economic and behavioral phenomenon.

• The article delves into the specific reasons behind this trend, such as the influence of online advertising, sales, emotional triggers, and peer pressure, providing valuable insights into the drivers of modern consumer behavior. This information is crucial for businesses looking to understand and engage with their target demographics.

• The findings about buyer's remorse and impulse purchases among Millennials and Gen Z also tap into broader discussions about consumer psychology and the potential downsides of readily available consumption. This makes the topic relatable and engaging for a wide audience.

Overview:

A new survey from Motley Fool Money investigated the reasons behind consumer overspending, focusing on the habits and triggers of different age groups. The survey found that a large majority of Americans engage in wasteful spending at least occasionally, with Millennials and Gen Z reporting significantly higher frequencies compared to older generations. The study identified several key factors contributing to this trend, including online advertising, sales and discounts, emotional shopping, peer influence, and boredom. Notably, younger consumers are also more likely to experience buyer's remorse following impulse purchases.

Detailed Findings:

• Frequency of Wasteful Spending: 85% of Americans admit to occasional wasteful spending. However, approximately 40% of Millennials and 35% of Gen Z waste money a few times a month, significantly higher than the 71% of Boomers who do so less than once a month or never. Nearly 20% of Gen Z and Millennials report wasteful spending multiple times a week, far exceeding Gen X and Boomers.

• Common Wasteful Spending Habits: The most frequent wasteful spending habits across all consumers include eating out often, making unplanned purchases, regularly buying convenience food and drinks, and paying for subscriptions they don't use.

• Triggers for Overspending:

  • Online Advertising: This is the top trigger for 62% of Gen Z and 61% of Millennials, compared to 58% of all respondents.

  • Sales and Discounts: Cited by 53% of Gen Z and 60% of Millennials, and also influential for 54% of Gen X and 63% of Baby Boomers.

  • Emotional Shopping: 41% of Gen Z identify boredom, stress, etc., as leading to overspending, compared to 28% of Millennials, 13% of Gen X, and only 4% of Baby Boomers.

  • Peer Influence: 24% of Gen Z and 23% of Millennials are influenced by peers to overspend, a stark contrast to 9% of Gen X and 6% of Baby Boomers.

  • Boredom: 45% of Gen Z most often spend wastefully when bored, compared to 30% of Baby Boomers. Older consumers are more prone to overspending while on shopping trips or during the holidays.

• Buyer's Remorse: Over half (54%) of Millennials and 50% of Gen Z regret most of their impulse buys, compared to 41% of Boomers and 46% of Gen X. Only 9% of all respondents never regret impulse purchases.

Key success factors of product (trend):

• Convenience and Accessibility: Products and services that are easily accessible online or through mobile apps cater to the impulse-driven nature of younger consumers.

• Targeted Advertising and Marketing: Effective use of online advertising and social media marketing can directly reach and influence Millennials and Gen Z.

• Value Perception (even through discounts): Highlighting sales and discounts can be a strong motivator for purchases across all age groups, but particularly for younger, budget-conscious consumers.

• Emotional Connection and Engagement: Products and marketing that tap into the emotions and aspirations of younger demographics can drive impulse buys.

• Social Relevance and Virality: Products or experiences that are popular among peers or trending on social media can leverage the influence factor among Gen Z and Millennials.

Key Takeaway:

The survey underscores a significant difference in spending habits between younger and older generations, with Millennials and Gen Z being more prone to frequent and impulsive overspending driven by factors like online advertising, emotional states, and social influences. This highlights the need for both consumers and brands to be aware of these triggers and their potential consequences.

Main Trend:

The main trend identified in the article is the prevalence of frequent and often regretted impulse spending, particularly among Millennials and Gen Z, driven by digital marketing, emotional factors, and social pressures.

Description of the trend:

The trend can be described as "Generation Impulse," where younger consumers, particularly Millennials and Gen Z, exhibit a tendency towards more frequent impulse purchases and higher rates of wasteful spending compared to older generations. This behavior is often triggered by online advertising, fueled by emotions like boredom or stress, and influenced by peer dynamics. Consequently, these younger demographics also experience higher levels of buyer's remorse.

What is consumer motivation:

• Instant Gratification: The desire for immediate satisfaction and the ease of online purchasing contribute significantly to impulse buying.

• Fear of Missing Out (FOMO): Social media and peer influence can create a sense of urgency and the need to participate in trends or acquire certain products.

• Emotional Coping: Shopping can be used as a temporary escape or a way to alleviate feelings of boredom or stress, especially among younger consumers.

• Value Seeking: The allure of sales, discounts, and promotions can override rational purchasing decisions, leading to unplanned buys.

What is driving trend:

• Digital Marketing and Advertising: The constant exposure to targeted ads and promotional content online and on social media significantly influences younger consumers.

• Social Media and Influencer Culture: Peer recommendations and the desire to emulate online personalities play a substantial role in shaping purchasing decisions for Millennials and Gen Z.

• Easy Access to Credit and Payment Options: Convenient online payment methods and the availability of credit can lower the barrier to impulse purchases.

• Psychological Factors: Boredom, stress, and the desire for instant gratification are key emotional drivers behind unplanned spending.

What is motivation beyond the trend:

• Building Identity and Belonging: For younger consumers, purchases can sometimes be driven by a desire to fit in with social groups or express their individuality.

• Seeking Experiences and Entertainment: While the survey mentions convenience food and subscriptions, broader motivations could include spending on entertainment, experiences, and products that enhance their lifestyle.

• The Pursuit of Happiness and Well-being: Some impulse purchases might be rationalized as self-care or a way to boost mood, even if they lead to regret later.

Description of consumers article is referring to:

The article primarily focuses on adult consumers in the United States. Based on the detailed findings and the survey's focus on generational differences, we can infer the following about the consumers implied:

Who are the consumers implied by article:

• Millennials: Generally defined as those born between the early 1980s and mid-1990s.

• Generation Z: Typically defined as those born from the mid-1990s to the early 2010s.

• The article also mentions Generation X (born roughly between the mid-1960s and early 1980s) and Baby Boomers (born approximately between the mid-1940s and early 1960s) for comparison.

Who are them:

• These consumers represent a broad range of individuals within the specified age demographics in the United States.

What kind of products they like:

• Based on the survey findings, younger consumers show a tendency towards frequently eating out, buying convenience foods and beverages, and engaging with subscription services. Their susceptibility to online advertising and peer influence suggests an interest in trendy items across various categories, including potentially fashion, beauty, technology, and entertainment.

What is their age?

• Primarily Millennials (approximately 29-40 years old in 2025) and Gen Z (approximately 15-28 years old in 2025). The article also references Gen X (approximately 41-59 years old) and Baby Boomers (approximately 60-80+ years old).

What is their gender?

• The survey data was post-stratified based on age and gender to be nationally representative, suggesting that the findings encompass both male and female consumers within these age groups. The article does not explicitly differentiate spending habits by gender.

What is their income?

• The article does not provide specific income details for the surveyed consumers. However, the focus on wasteful spending suggests that it includes individuals with disposable income, though the prevalence among younger generations might also reflect spending beyond their means or prioritization of certain types of purchases.

What is their lifestyle:

• Millennials and Gen Z are often characterized by digitally connected lifestyles, with a significant presence on social media. They tend to value experiences, convenience, and aligning with current trends. Gen Z, in particular, shows a higher inclination towards emotional and peer-influenced spending, potentially indicating a lifestyle more susceptible to immediate gratification and social validation through purchases.

What are their category article is referring shopping preferences:

• The article primarily refers to categories associated with frequent spending and impulse buying, such as food (eating out, convenience items), digital services (subscriptions), and general unplanned purchases potentially spanning various product types.

Are they low, occasional or frequent category shoppers:

• Millennials and Gen Z are indicated as frequent shoppers in the categories mentioned, particularly when it comes to eating out, convenience food, and making unplanned purchases.

What are their general shopping preferences-how they shop products, shopping motivations:

• They are likely to shop online frequently, given the significant influence of online advertising. Their shopping motivations include seeking value (sales), fulfilling emotional needs (boredom, stress), and gaining social acceptance or following trends (peer influence). Convenience and ease of purchase are also likely important factors.

Conclusions:

The survey data clearly demonstrates a generational divide in spending habits, with younger consumers being more prone to frequent overspending and impulse purchases driven by a complex interplay of digital influences, emotional factors, and social dynamics. This trend has significant implications for both consumers and brands, highlighting the need for greater awareness and strategic adaptation.

Implications for brands:

• Targeted Digital Advertising: Brands can leverage the strong influence of online advertising on Millennials and Gen Z by creating compelling and targeted campaigns.

• Strategic Use of Sales and Discounts: Promotions can be highly effective in driving purchases across all age groups, but especially among younger, value-conscious consumers.

• Engagement on Social Media and with Influencers: Given the impact of peer influence, brands should focus on building a strong social media presence and collaborating with relevant influencers to reach younger audiences.

• Understanding Emotional Triggers: Brands can tailor their messaging to resonate with the emotional needs of younger consumers, while also being mindful of potentially encouraging wasteful spending.

• Mobile-First Approach: Ensuring a seamless and convenient mobile shopping experience is crucial for engaging with the digitally native younger generations.

Implication for society:

• Increased Debt and Financial Instability: The tendency towards frequent impulse buying and overspending, particularly among younger generations, could contribute to higher levels of debt and financial instability in the long run.

• Rise of Consumerism and Materialism: The influence of advertising and social media might further fuel consumerist values and a focus on material possessions for validation.

• Mental Health Concerns: Emotional shopping as a coping mechanism could mask underlying mental health issues and lead to unhealthy spending habits.

• Environmental Impact: Increased consumption, especially of convenience goods and fast fashion (which wasn't explicitly mentioned but aligns with impulse buying), can have negative environmental consequences.

Implications for consumers:

• Higher Levels of Buyer's Remorse: Younger consumers need to be more mindful of their impulse purchases and the potential for regret.

• Need for Financial Literacy: Understanding spending triggers and developing better budgeting habits are crucial for avoiding excessive debt and achieving financial well-being.

• Conscious Consumption: Consumers, especially younger individuals, should strive for more conscious and intentional spending, focusing on needs over fleeting wants.

• Managing Digital Influences: Developing critical thinking skills to navigate online advertising and social media pressures is essential for making informed purchasing decisions.

Implication for Future:

• Evolution of Retail and Marketing: Brands will likely continue to innovate in digital marketing and explore new ways to leverage social media and emerging technologies to influence consumer behavior.

• Growing Focus on Financial Wellness: There might be an increased emphasis on financial literacy and tools aimed at helping younger generations manage their spending habits.

• Potential Shift in Consumer Values: As younger generations mature, their priorities might evolve, potentially leading to a greater focus on sustainability and experiences over material possessions.

• The Rise of "Mindful Spending" Trends: Counter-movements promoting conscious consumption and minimalism might gain further traction as a response to widespread impulse buying.

Consumer Trend (name, detailed description):

Impulse Generation: This trend describes the heightened propensity of Millennials and Gen Z towards frequent and often regretted impulse purchases, driven by the pervasive influence of digital marketing, emotional states like boredom or stress, and the allure of social trends and peer validation.

Consumer Sub Trend (name, detailed description):

Triggered Spending: This sub-trend highlights the specific factors that initiate impulse purchases among younger consumers, notably the effectiveness of online advertising and the persuasive power of sales and discounts.

Big Social Trend (name, detailed description):

Digital Influence on Consumption: This broader social trend acknowledges the profound impact of the digital environment, including advertising, social media, and influencer culture, on shaping consumer behavior and driving purchasing decisions, particularly for digitally native generations.

Worldwide Social Trend (name, detailed description):

The Instant Gratification Economy: This global trend reflects the increasing consumer demand for immediate fulfillment and satisfaction. The ease and speed of online shopping, coupled with pervasive marketing, contribute to a culture where instant purchases are normalized and encouraged.

Social Drive (name, detailed description):

Social Validation Through Consumption: This drive describes the tendency, particularly strong among younger generations, to seek approval and belonging through the acquisition and display of certain products or experiences that align with social trends and peer groups.

Learnings for brands to use in 2025:

• Embrace Personalized Marketing: Utilize data to create highly targeted online advertising that resonates with the specific interests and potential emotional triggers of Millennial and Gen Z consumers.

• Leverage Influencer Partnerships Authentically: Collaborate with relevant and trustworthy influencers who genuinely connect with the target audience to drive brand awareness and product desirability.

• Offer Seamless Omnichannel Experiences: Ensure a consistent and user-friendly shopping experience across all platforms, especially mobile, to cater to the on-the-go nature of younger consumers.

• Incorporate Urgency and Scarcity Tactics Strategically: While effective, these tactics should be used ethically and sparingly to encourage purchase without creating excessive pressure or promoting regret.

• Build Community and Foster Engagement: Create opportunities for consumers to connect with the brand and each other, fostering a sense of belonging and loyalty that extends beyond transactional relationships.

Strategy Recommendations for brands to follow in 2025:

• Develop Content that Resonates Emotionally: Create marketing content that taps into the emotions and aspirations of the target audience, addressing their needs and desires beyond just the functional benefits of the product.

• Invest in Social Listening and Trend Analysis: Continuously monitor social media and online conversations to identify emerging trends and understand the evolving preferences of Millennial and Gen Z consumers.

• Offer Value and Transparency: Focus on providing genuine value to consumers through high-quality products and services, while also being transparent about pricing, sourcing, and ethical practices.

• Experiment with Interactive and Engaging Formats: Utilize interactive ads, augmented reality experiences, and gamified content to capture the attention and drive engagement of younger, digitally savvy consumers.

• Consider Ethical Marketing Practices: Be mindful of the potential for online advertising and influencer marketing to contribute to excessive spending and buyer's remorse, and strive for responsible marketing practices.

Final sentence (key concept) describing main trend from article (which is a summary of all trends specified), and what brands & companies should do in 2025 to benefit from trend and how to do it.

In 2025, the dominant "Impulse Generation" trend among Millennials and Gen Z necessitates that brands strategically leverage personalized digital marketing, authentic social engagement, and a deep understanding of emotional triggers to capture their attention and drive sales within this landscape of frequent, yet often regretted, impulse spending.

Final Note:

• Core Trend: Impulse Generation: Younger consumers exhibit a strong tendency towards frequent and regretted impulse buying, fueled by digital stimuli, emotions, and social pressures.

• Core Strategy: Engage with Empathy and Authenticity: Brands must connect with Millennial and Gen Z consumers on an emotional level through genuine influencer partnerships and valuable content, while being mindful of responsible marketing practices.

• Core Industry Trend: The Rise of Digital Influence: The digital environment continues to be the primary driver of consumer behavior, requiring brands to prioritize online and mobile-first strategies.

• Core Consumer Motivation: Instant Gratification and Social Validation: Brands should cater to the desire for immediate satisfaction and the need for social acceptance through their offerings and marketing efforts.

Final Conclusion:

The era of the "Impulse Generation" presents both opportunities and challenges for brands in 2025. By understanding the underlying motivations and triggers behind younger consumers' spending habits, companies can develop effective strategies to engage this demographic and drive sales. However, it is also crucial for brands to adopt ethical marketing practices and be mindful of the potential negative consequences of encouraging excessive impulse buying. Ultimately, a balance between capturing consumer interest and promoting responsible consumption will be key to long-term success.

Core Trend Detailed:

The "Impulse Generation" core trend signifies a fundamental shift in consumer behavior, particularly within the Millennial and Gen Z demographics. Unlike previous generations who may have adhered more strictly to planned purchases and long-term financial goals at similar life stages, these younger consumers demonstrate a greater inclination towards spontaneous buying decisions. This behavior is not solely driven by necessity or practical considerations but is heavily influenced by a complex web of factors including the omnipresence of digital marketing, the allure of fleeting social media trends, and the immediate gratification offered by readily available online shopping platforms. This trend is further amplified by emotional states such as boredom, stress, or even excitement, turning shopping into a form of instant therapy or entertainment. The high rates of buyer's remorse reported by these generations suggest a potential disconnect between the initial desire and the subsequent satisfaction derived from these impulsive purchases, highlighting the often-unplanned and sometimes irrational nature of this spending behavior.

Key Characteristics of the Core trend:

• High Frequency of Impulse Purchases: Millennials and Gen Z report engaging in unplanned buying much more often than older generations.

• Digital Native Influence: Online advertising and social media play a dominant role in triggering these impulse buys.

• Emotional Drivers: Feelings like boredom and stress are significant catalysts for overspending among younger consumers.

• Social Validation Seeking: Peer influence and the desire to align with trends contribute to spontaneous purchases.

• Increased Buyer's Remorse: A significant portion of these impulse purchases are followed by feelings of regret, indicating a lack of long-term satisfaction.

Market and Cultural Signals Supporting the Trend:

• Proliferation of Social Media Marketing: Brands heavily invest in targeted ads and influencer campaigns on platforms like TikTok and Instagram, directly reaching and influencing younger demographics.

• Rise of Fast Fashion and Trend Cycles: Rapidly changing trends in fashion and consumer goods create a sense of urgency to purchase the latest items, fueling impulse buys.

• Easy Access to Online Shopping and Payment: Mobile apps and streamlined checkout processes make it effortless for consumers to make quick, unplanned purchases.

• Cultural Emphasis on Experiences and Instant Gratification: Modern society often promotes the idea of treating oneself and indulging in immediate pleasures, contributing to impulsive spending habits.

• Gamification of Shopping: Some platforms and apps incorporate game-like elements, such as limited-time offers and flash sales, to encourage immediate purchases.

How the Trend Is Changing Consumer Behavior:

• Decreased Budgeting and Planning: The focus shifts from long-term financial planning to immediate desires and spontaneous purchases.

• Increased Reliance on Digital Cues: Online advertisements and social media recommendations hold significant sway over purchasing decisions.

• Emotional Connection to Brands: Consumers may develop emotional attachments to brands that effectively tap into their feelings and aspirations through marketing.

• Shorter Purchase Consideration Times: The ease of online shopping and the influence of trends lead to quicker purchasing decisions with less deliberation.

• Heightened Expectation for Instant Fulfillment: Consumers expect rapid shipping and immediate access to products and services purchased online.

Implications Across the Ecosystem:

• For Brands and CPGs: Opportunity to leverage digital channels for targeted advertising and influencer marketing to drive sales. Need to adapt to rapidly changing trends and cater to the desire for instant gratification. Importance of ethical marketing to avoid contributing to consumer debt and regret.

• For Retailers: Need to optimize online and mobile shopping experiences. Consider incorporating elements of gamification and personalized recommendations. Manage inventory effectively to meet the demands of trend-driven purchases.

• For Consumers: Increased risk of overspending and accumulating debt. Potential for buyer's remorse and dissatisfaction with impulse purchases. Need for greater financial literacy and conscious spending habits.

Strategic Forecast:

• The "Impulse Generation" trend is likely to persist and potentially intensify in the coming years, driven by the continued growth of digital platforms and the evolving nature of consumer culture.

• Brands will continue to refine their digital marketing strategies to capitalize on this trend, with a growing emphasis on personalized and emotionally resonant content.

• There may be a counter-trend emerging, with a greater focus on mindful spending and financial wellness, particularly as younger generations face increasing economic pressures.

• The role of technology, such as AI-powered personalized recommendations and augmented reality shopping experiences, will likely become more significant in shaping impulse purchasing behavior.

Areas of innovation (based on discovered trend):

• AI-powered personalized product recommendations: Tailoring suggestions based on real-time Browse behavior, social media activity, and past purchase history to capitalize on impulse moments.

• Augmented reality "try-before-you-buy" experiences: Reducing purchase hesitation by allowing consumers to virtually experience products before committing.

• Seamless and instant checkout processes: Minimizing friction in the purchasing journey to encourage spontaneous buying.

• Integration of social commerce features: Enabling direct purchases within social media platforms to capitalize on trend-driven impulse.

• Tools and apps for mindful spending: Developing technologies to help consumers track their spending, identify impulse triggers, and make more informed purchasing decisions.

Final Thought (summary):

The prevalence of impulse spending among Millennials and Gen Z in 2025 presents a dynamic landscape where brands must innovate their digital engagement strategies while consumers navigate the potential pitfalls of instant gratification and social influence.

Source: https://chainstoreage.com/survey-top-reasons-consumers-overspend-include?