Gen Alpha set to dominate consumer market by 2040

Although they don't earn money yet, they are already influencing household spending.

Generation Alpha, born from 2010 onwards, is set to become the largest group of active consumers by 2040.

According to Euromonitor International, although they are not yet earning money, they are already influencing household spending, and their purchasing power will only grow as they enter adulthood.

Countries with large Gen Alpha populations such as India, China, the US, Indonesia, and Nigeria, represent enormous opportunities for brands. However, this generation is diverse and will not fit into a one-size-fits-all approach.

Fashion companies looking to connect with them need to understand key traits that will define their buying behaviors, the report noted.

Generation Alpha is defined by its seamless integration with digital platforms and technology. From playing online video games that use virtual currencies like Robux to customising avatars in virtual worlds like Roblox, Minecraft, and Fortnite, these digital spaces are integral to their social interactions and identity-building. However, Gen Alpha is not merely a passive consumer—they want to co-create content and share their opinions.

Fashion brands that wish to engage this generation must invest in interactive experiences such as augmented reality (AR), virtual reality (VR), and artificial intelligence (AI). These technologies will be crucial in creating immersive, game-like experiences that both entertain and educate Gen Alpha about products and brand values, Euromonitor said. For instance, Spanish retailer Mango is already experimenting with virtual shopping spaces, offering users a chance to try on and purchase digital garments in Roblox’s Outfit Shopping Mall.

Gen Alpha’s familiarity with technology has led to an expectation of personalised services and products. The ability to express themselves creatively, particularly through fashion, is essential to this generation. With a constant presence on social media and an affinity for customising avatars and digital personas, Gen Alpha is likely to embrace fashion brands that allow for customisation.

One notable example is Jibbitz, small charms that can be attached to Crocs shoes, allowing wearers to change their style on demand. These customisable accessories now account for nearly 10% of Crocs’ sales. 

Whilst Gen Alpha might not yet be able to buy sustainable products, they are deeply aware of environmental issues. Growing up with climate change discussions and sustainability education, they will prioritise brands that are transparent and eco-friendly. As they become more influential, brands will need to adopt circular business models and sustainable practices to meet this generation’s expectations.