Gen Alpha Arrives With Very Grown Up Spending Power

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1:32Bloomberg Audio Studios, podcasts, radio, news. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. Stacey Vanek-Smith is a columnist for Bloomberg Business Week. She's the co-host of the Everybody's Business podcast. She writes about the very grown-up spending power of Gen Alpha. She joins us here in the Bloomberg Interactive Brokers Studio. So Carol mentioned the criticisms of this generation. Yes. And then we'll talk about this. As you point out in your piece, they came of age during the pandemic. There's this strange relationship with technology.

2:07Are people right about the criticisms? But wait, wait. Okay. There's also strengths. And they have a lot of strengths. So talk about those before we talk about the criticism. I'm a glass of full type of person.

2:18Stacey Vanek Smith:Well, it's interesting because I feel like the strengths and the weaknesses go hand in hand a little bit. So you're exactly right. A lot of these kids came of age and experienced big life milestones during the pandemic inside through screens. So as a result of that, there are issues with socialization. Also, learning was much more difficult and we were all kind of trying to find our footing. But at the same time, there's a lot. This generation shows itself to be very good at teamwork. Also, very entrepreneurial, because a lot of games like Minecraft and Roblox, like they have worlds inside of worlds where businesses can be built.

2:53Stacey Vanek Smith:and things like that. And because social media can give people such a huge platform so fast, a lot of these very young, I mean, I almost even hesitate to call them kids, but a lot of these kids have huge audiences. They can develop products and put them out on a world stage. I mean, it's just really impressive. It's impressing, but it's all, it's impressive. Impressing. It's also daunting to me. Yeah. Why? Well, it's daunting to me for a few reasons. And one, I don't love the idea that in order to be successful, we have to have these big online presences. Yeah. And I see this happen. Like, you know, my social media feed, which, of course, I try to keep it away from my kids.

3:34But like my social media feed, like there are kids whose parents are clearly enabling them to become creators and like want to be influencers and stuff. And I just wonder, like, what are we what are we doing to them in that process?

3:47Stacey Vanek Smith:I mean, I think it's it's a double edged sword for sure. I mean, the screen time of the alphas is pretty major. Kids under eight are spending at least like two and a half hours on average. Way less than their parents. Yes. But it's still quite a bit of screen time during very formative years. At the same time, a lot of agility with technology could be a real strength in AI coming into the workplace right now at a time of great transformation. but also I talked to one woman who started a jewelry business with her father, this jewelry business, Gunner and Lux. She was only five and she was making jewelry out of her plastic toys.

4:28Stacey Vanek Smith:And her dad put pictures of it on Instagram. And then she was doing deals with Barneys and it's like, it's pretty amazing. Yeah. They sell thousands of pieces of jewelry now at Gunner and Lux. Well, you do wonder like, you know, generational shifts, right? And when you have a generation, like we talk about this all the time about, I have a daughter who's 23 and she's like, yeah, I kind of miss some of the obsessiveness with like phones and stuff. Although a phone is really important to her, but you do wonder about a generation that grows up this way and how they shape our economy and society going forward.

5:00Stacey Vanek Smith:Yes. And this generation is very, um, perhaps you could talk about this a little bit with your kids, very outspoken. Apparently they direct way more money within their family than earlier generations. So$100 billion in direct spending power. I mean, between ages one and 16,$100 billion in the US of direct spending power. Apparently, these kids just have a huge say over travel, food, streaming services, just a much bigger voice. I mean, when I was growing up, my parents did not consult me on any purchases or even like what to watch on TV ever. I think they were right, I will say. I mean, they also think they were right.

5:39Stacey Vanek Smith:But a lot of times the shows I was watching, it was like when my dad got home, we would watch a boxing match. Yes. End of story. No, you're absolutely right. There has been a shift in terms of kids involvement. And I saw it even in my household of just conversations about spending money and what we're doing. And like it was kind of I don't know if that's happening. Your kids are young. My seven year old did tell us this week because it's school break right now. And a lot of his friends are on vacation. He said, we should have gone on vacation this week. No. Yes. Thank you for the feedback. where should we have taken this vacation?

6:11And he said, to California because then I can wear shorts. And I said, that's actually, that makes sense. You want to go somewhere warm. But we're not going on vacation this week. We're working. I don't know. You know, are these, is this the alphas? Are they, you have a line, are uniquely positioned to help older generations discover and navigate different things? Like I just, so good or bad? Like how are you, like having done this story and talked to different folks? Like, is this a good thing? Like, where do we go with this?

6:40Stacey Vanek Smith:I ended up coming away thinking it was a good thing. But there's a lot of anxiety already. I mean, I think this generation is probably the most kind of fretted over and poked and prodded of any generation because of the pandemic. They're being measured all the time. There's already all of this anxiety over them entering the workforce because a lot of teachers have gone online saying these kids have no discipline. They don't listen. They don't respect authority. And so, of course, this has spawned. I mean, alphas are just about to enter the workforce or have just barely entered. But they were selling jewelry to Barney's or whatever the heck it was.

7:12Like, I mean, if you think about like that part, that seems like a huge plus. I don't know. Do you think that that we're talking about this generation differently than other generations have talked about new generations like millennials, like Gen Z?

7:27Stacey Vanek Smith:I think we are definitely talking about them differently because, I mean, I just think because of the moment we're in. and because we all went through the pandemic and maybe in certain ways are still processing it, both as an economy and a society, I think the kids became a focus because we could at least look at kids and worry about them and their experience, even while we were still trying to process our own. So I think for that reason, we look at this generation differently. Like how have they been shaped by this? Also, we're on the cusp of a huge technological revolution in the economy with AI.

8:00Stacey Vanek Smith:And this is the generation that's going to really grow up in that. 30 seconds, 40 seconds. I do wonder, Stacey, is it, you know, kids, we always talk about being resilient. So is there a resiliency that they are coming out of the pandemic with or a setback? Like, are we not quite sure yet? I think there are definite setbacks. I mean, reading levels, math levels, yes, a setback. I also think resiliency is a big issue too, though they've undergone such enormous change and transformation. They've weathered the storm. they're probably better able to adapt to shifts and huge changes than the rest of us were simply because that is the water they grew up swimming in.

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