Older generations spending more online amid cost of living pressures - MASHAHER

Key Points

Baby boomers spent almost $1 billion more on online shopping in 2023 than they did in the year beforehand.
Gen Z showed the largest decrease, spending 11 per cent less on online shopping.
A total of 9.5 million Australian households shopped online in 2023.

Baby boomers are spending big online while young people are making substantial cutbacks amid increased cost of living pressures.

This is according to Australia Post’s most recent annual report on Online Shopping released on Monday, which reveals a stark generational gap in online spending habits in Australia.

While Australians overall spent less online compared with last year, a closer look at the data shows the trend toward more cautious online spending does not apply to boomers.

Gen Z, which accounts for people aged 18-26, is the age group with the sharpest decrease in online spending, showing an 11 per cent drop compared with last year.

Social researcher and generational expert Claire Madden said while Australia’s younger generation is still actively engaged in online shopping, they are more likely to source budget options in their purchases.

“While gen Z doesn’t have the same earning capacity as older generations, they are showing they are still active, savvy, online shoppers who have a focus on lifestyle spend and search for good value,” she said.

Gen Y spent more than any other generation online, with a total of $22.1 billion.

However, this number still shows a decline in online spending when compared to the last report, sitting 2 per cent lower than last year.

For those aged 44-59, spending increased marginally, with gen X seeing a 1 per cent increase in online spending.

The trend toward more careful online spending changes substantially, however, when considering the habits of boomers.

For those aged 60-78, online spending increased by 7 per cent in the last year.

With a total spend of $12.5 billion, boomers spent almost $1 billion more on online shopping than they did last year.

Boomers spent almost $1 billion more in total on online shopping than they did last year. Source: Getty / Almaje

The data more broadly found 9.5 million Australian households shopped online in 2023, spending a total of $63.6 billion on online goods.

These figures indicate Australians have overall spent less online compared with last year, with online spending experiencing a 1.2 per cent decline.

The drop in overall online spending comes even though the number of Australian households shopping online is the highest it has ever been, with eight in 10 households making an online purchase in the past year.

Graph showing online shopping increased to its highest point in 2023

This suggests while more Australians are shopping online, they are on average tending toward smaller, more frequent purchases.

These figures are in line with a trend toward more careful household budgeting more broadly, as Australians respond to high interest rates and increased cost of living pressures.

The tightening of household budgets was reflected in the latest Australian Bureau of Statistics national accounts figures — which showed that, with GDP only growing 1.5 per cent over last year, the economy had slowed to a relative standstill.

However, according to Madden, the increase in online spending for boomers suggests a clear gap in the confidence of Australia’s youngest consumers compared to that of its oldest when it comes to online shopping.

“We’re seeing a growing confidence in older generations spending more than younger generations in each transaction,” she said.

Source Agencies