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Price check: Gen Zers’ financial situations and perceptions of the economy seem to be affecting their spending habits. Seventy-three percent of US Gen Z consumers said they are changing their spending habits because of increased prices, and 70 percent of Gen Zers in the United Kingdom said they are prioritizing affordability when buying clothes. These findings tell only part of the story, though. Splurging on fashion is still popular among Z babies, McKinsey’s ConsumerWise research finds. Items of self-expression, such as clothes and jewelry, are among the most cited splurge categories, meaning subcategories such as watches are seeing an uptick (😏) in Gen Z interest.

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Loyalty shmoyalty: Half of US Gen Z consumers prefer to explore and shop new brands, compared with one-third of shoppers aged 50 and older. On average, only 29 percent of Gen Zers said their wardrobes are from the same brand (compared with 52 percent of shoppers aged 50 and older). An insight from McKinsey partner Tamara Charm: loyalty programs are important, but shoppers are savvy. Targeting the right Gen Z consumers—that is, those who are likely to be long-term shoppers of a brand rather than those keen on snagging a one-off deal—can help fashion players make the most of their loyalty programs.

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Breathing room: Eighty percent of Gen Z consumers said they feel overwhelmed by their exposure to brands. Even so, young shoppers are the bull’s-eye for many fashion brands. Approximately 60 percent of fashion executives surveyed plan to double down on marketing toward Gen Zers and millennials, who are already twice as likely to be targeted than older generations. While fashion execs should look beyond Gen Z shoppers (Gen Xers and boomers are also keen to spend on clothes, this year’s report finds), opting for quality marketing messages that are informed by consumer insights—rather than high-volume messages that feel like spam—will go far in bringing Gen Z shoppers into the fold.

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Sportswear showdown: Two in three millennial and Gen Z consumers wear athleisure multiple times per week, according to the report, and 56 percent of Gen Z consumers consider fitness a “very high priority” in their lives. Since the word is out on this market opportunity, competition for Gen Zers’ share of wallet will be high. The fashion players that succeed in athleisure will do so by investing in material and product innovations and by achieving cultural relevancy through their brand building: for example, through partnerships with celebrities and tastemakers that resonate with the fashion brand’s target audience.

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Going global: Gen Zers in India, a region that could power fashion industry growth in the year ahead, are another group to keep an eye on. They purchase clothes 30 to 40 percent more frequently than millennials and are inspired by international trends, according to the CEO of an Indian fashion player. And consumers aged 18 to 24 in emerging markets, including India, indicate a strong desire to spend on premium products. In fact, they are up to two times more likely to trade up—meaning, to opt for higher-priced brands and retailers—than young consumers in advanced economies.