In a post-pandemic economy where e-commerce is at an all-time high, Millennials and Generation Z make up the majority of online shoppers in the United States. Since the pandemic, ongoing inflation, an increasingly unstable job market, rising housing costs, and the looming threat of a recession have led to widespread, rampant consumerism among millions of people aged 18 to 34.
With these worries plaguing their everyday lives, many Millennials and Gen Zers turn to retail therapy to distract them from feelings of stress or anxiety. Similarly, they may escape to their mobile phones and social media to cope with loneliness, isolation, and boredom, encountering product reviews, promotions, and links to online retailers.
According to a 2024 Qualtrics study done on behalf of Intuit Credit Karma, more than one-third of Gen Z and Millennials say they have a shopping addiction. Shopping addiction is a behavioral disorder that occurs when a person continues buying things—often compulsively and impulsively—regardless of whether they need or can afford them.
In this blog post, we discuss the rise of shopping addiction among Gen Z and Millennials over the last five years, exploring various factors that contribute to compulsive shopping and the consequences shopping addiction can have.
We also address how social media has influenced shopping addiction among Gen Z and Millennials and how people struggling with shopping addiction can overcome their unhealthy behavior and develop productive coping skills amidst stressful times.
Understanding Shopping Addiction Among Gen Z and Millennials
When the pandemic struck in 2020, many Millennials and Gen Z—like millions of other Americans—were overworked, underpaid, and overwhelmed. When they found themselves cooped up at home, frustrated by the present, and afraid of what the future would bring, many coped with online retail therapy.
Even before the pandemic, platforms like Instagram, YouTube, and TikTok were revolutionizing e-commerce with the rise of influencers and sponsored content. Scrolling through a personalized feed diluted by sponsored videos and pop-up ads is a common experience for users across nearly every social media platform.
But when Gen Z and Millennials are the most active demographics on social media, and social media is full of content designed to make money off its users, the fact that they are so easily influenced to spend money through these outlets should not come as a surprise, particularly when they can autofill their credit card information for quick one-click purchases on a handful of platforms.
Influence of Social Media and Online Shopping
Beyond the influencer haul videos, product reviews, and streaming ads pushed by social media algorithms, social media is a far more sinister enabler of Millennials and Gen Z’s impulsive spending habits. The Qualtrics and Credit Karma study found that more than half of Gen Z and Millennials have gone into debt due to their shopping addiction.
Almost 20% of Millennial and Gen Z respondents reported having high credit card balances of over $5,000, with 18% reporting between $1,000 and $5,000 in credit card debt.
Survey respondents blamed social media for enabling their bad habits, particularly during the pandemic when they were confined to their homes. After pandemic lockdowns lifted, retail sales exploded as consumers began spending again to compensate for lost time.
Roughly half of those in the Qualtrics survey said that Instagram (50%), YouTube (46%), and TikTok Shop (44%) fueled their shopping addiction. Amazon took the cake, however, with 78% of respondents blaming the allure of two-day shipping for their problematic impulse buying.
For some young people, simply looking forward to their next Amazon delivery makes living paycheck to paycheck more bearable. For other Millennial and Gen Z shoppers, the urge to click “buy now” can stem from different psychological and subconscious factors, like the fear of missing out (or FOMO) on a deal or feeling the need to maintain a particular lifestyle or follow trends based on what is on social media.
In the Credit Karma and Qualtrics survey, Gen Z and Millennials with high credit card balances admitted to overspending on clothes, shoes, accessories, beauty products, and dining out. Other costs they splurged on were electronics, luxury items, and entertainment.
What is Shopping Addiction?
Though shopping addiction is not yet considered a clinical behavioral disorder, many mental professionals consider shopping addiction a behavioral disorder, similar to gambling addiction.
Someone with a behavioral addiction often feels strong urges to do a specific behavior without thinking or despite its adverse outcomes. They may also feel like they cannot control their actions.
Other signs or symptoms of a shopping addiction may include the following:
- Your spending leads to debt or legal consequences
- Your family or friends show concern over your spending habits
- You feel anxious, uneasy, or sad when you’re not shopping
- You feel a high or a “buzz” over making a purchase
- You feel guilt or shame after making a purchase
- You hide packages or lie to others about your shopping habits
- You can stop shopping for a brief period but repeatedly relapse and start shopping again
Often, someone with a shopping addiction does not overspend because they need the things they are buying as well as the positive emotional experience they feel from shopping. The thrill of making impulse purchases—primarily online—can trigger a dopamine rush, reinforcing an addictive shopping cycle.
A person who is addicted to shopping may compulsively buy for a handful of reasons:
- Improve mood
- Manage stress
- Cope with boredom
- Improve self-esteem
- Gain attention or social approval
Compulsive shopping behaviors may look different depending on the person. Although plenty of people talk about needing some retail therapy, shopping when stressed or simply enjoying shopping doesn’t mean you are addicted to it.
Impact of Shopping Addiction on Gen Z and Millennials
The ease and convenience of online shopping have made it all too easy for younger generations to overspend and accumulate debt without fully realizing the consequences. At the same time, however, poor economic conditions, an unstable job market, and unlivable housing costs have driven Gen Z and Millennials to rely on credit cards to make ends meet, choosing to treat themselves with impulse buys here and there.
Millennials and Gen Z tend to carry higher credit card balances and lower savings rates than older generations. This is often linked to the addictive nature of online shopping habits developed at a young age, usually as a product of unlimited social media and internet access.
This lack of financial literacy and discipline prevents many young consumers from sticking to budgets, saving for the future, or working towards goals like homeownership or retirement.
Research has found strong correlations between problematic online shopping, lower credit scores, bankruptcy filings, and overall financial instability among Millennials and Gen Z.
Without healthy spending habits and the capacity to delay gratification, Millennial and Gen Z consumers may struggle to pay off debts, save for significant life events, and secure their financial futures. Addictive shopping behaviors can also evolve into other compulsive disorders like gambling or substance abuse if left unchecked.
Addressing Shopping Addiction in Gen Z and Millennials
According to Credit Karma, Millennials and Gen Z shopaholics know their impulsive spending habits and hope to leave behind their financially irresponsible era. Nearly half of those surveyed said they are or have been financially irresponsible in the past. In contrast, some said they have been motivated by de-influencing and personal finance trends on social media to change their habits in 2024.
“Loud budgeting” and “no-buy” periods are two social media trends that have inspired many young people to be more intentional about their spending this year. In a “no-buy” or “low-buy” year (or month), consumers commit to only shopping for essentials and items they have to replace regularly, cutting out expenses like takeout and luxury items.
“Loud budgeting is a new concept I’m introducing for 2024,” TikTok user Lukas Battle said in a December 2023 post. “It’s the opposite of quiet luxury…So it’s almost more chic, more stylish, more of a flex,” he said.
“Loud budgeting has the same feeling as sneaking candy into a movie theater. You feel like you got away with something,” Battle said.
In other words, loud budgeting is being intentional about not spending money in scenarios—often social situations—where they’d typically spend a few bucks.
“It’s not, ‘I don’t have enough’. It’s, ‘I don’t wanna spend.’ So it’s like if your friend texts you, ‘I wanna hang out.’ You say, ‘I don’t wanna spend gas money,’” Battle said.
While personal finance trends on TikTok and Instagram have certainly motivated many Millennials and Gen Zers to be more responsible with their spending money, loud budgeting and having a no-buy month may not be practical may not be enough to curb problematic shopping behaviors for some young people.
Treating and Preventing Shopping Addiction
For those already struggling with shopping addiction, therapeutic interventions grounded in evidence-based practices can be beneficial. Cognitive-behavioral therapy (CBT) has proven effective in addressing the thought patterns and compulsive behaviors associated with problematic shopping.
CBT helps individuals recognize negative thinking styles that drive excessive spending and teaches coping mechanisms to break the addiction cycle. Mindfulness-based techniques that promote present-moment awareness and impulse control are also valuable therapeutic approaches.
Support groups and addiction counseling services tailored to the unique needs of Millennial and Gen Z shoppers can provide essential community, accountability, and specialized treatment.
Initiatives to teach young consumers techniques like delayed gratification, mindful shopping, and prioritizing needs over wants can go a long way in cultivating more responsible relationships with material goods and online commerce.
While individual awareness, education, and therapeutic support can help curb potential financial ruin among Millennials and Gen Z, the causes and consequences of shopping addiction in younger generations must be addressed comprehensively.
Financial institutions and federal policymakers must prioritize regulating access to credit, buy-now-pay-later financing options, and other predatory lending practices that also enable overspending.
On the other hand, a cultural shift that promotes healthier relationships with material goods, consumerism, and the role of shopping in daily life will help younger generations learn to find fulfillment and value in experiences without overspending.
Shopping Addiction, Dual Diagnosis: We Can Help
Because those who live with an existing behavioral or mental health disorder are at higher risk of substance abuse, Millennials and Gen Zers struggling with shopping addiction may be at risk of substance abuse as a means of coping with their compulsive spending.
This is not to say if you have a shopping addiction, you will struggle with substance abuse or vice versa. However, research suggests shopping addiction commonly occurs in families in which mood, anxiety, and substance abuse disorders are common. Ultimately, it’s essential to recognize that shopping addiction may coincide with other conditions and be influenced by a range of mental health factors.
As Millennials and Gen Z become increasingly aware of their spending habits and the influence of online shopping, The Summit Wellness Group applauds those willing to admit their struggles and unhealthy shopping habits. If you are dealing with a shopping addiction alongside another mental health concern, we encourage you to reach out for help.
Our team of licensed therapists utilizes a range of proven modalities to help young people struggling with compulsive shopping habits regain control of their finances and well-being. You can reach us anytime by phone at (770) 767-3593 or by email at ContactUs@TheSummitWellnessGroup.com.