You can’t sit with us (unless you resemble a photoshopped model); the once exclusive strategies of teen fashion players, built on heavy-logoed products and a too cool for school brand image, are no longer resonating with the younger consumer. Abercrombie & Fitch, previously the go-to brand for any prom queen or king, recorded a CAGR of -3% from 2010 to 2015, while Aréopostale has been declining by a CAGR of -8% for the same period. The rise of fast fashion has significantly impacted the evolution of the teen market with global brands such as H&M and ZARA growing by CAGRs of 9% and US brand Forever21 outpacing the industry at 11% from 2010 to 2015; however, this is not the root cause. The fundamental consumer behaviour, attitudes and values on which teen brands built their business have simply shifted, as the latter half of generation Y and more recently, generation Z has entered the market.
Teen Fashion Brands Year-on-Year Growth 2006-2015
Generation Y grew up in a time when technology was advancing and high speed internet became readily available; the defining characteristics of this consumer group have continued and are even more pronounced with generation Z. As digital natives they are extremely well-connected, expect everything to be immediately accessible and do not distinguish between buying online and in store.
Reliance on store footfall has negatively impacted the performance of teen brands as consumer behaviour shifts form spending their weekends socialising at the mall to connecting with friends through social media. American Eagle has successfully managed to turn its business around by catering to this consumer group with an omni-channel strategy and increased social media presence.
The digital age has also led to changes in teenager expenditure, with more choice in the form of electronics, gadgets and apps. Tablets, smartphones and wearable electronics have grown by volume CAGRs of 64%, 38% and 337% from 2010 to 2015, respectively, and it is these types of products that teenagers now consider aspirational purchases rather than clothing and footwear brands. Additionally, generation Y and Z, in developed markets, are poor compared to baby boomers and generation X with student debts, high youth unemployment and unaffordable housing, resulting in limited disposable incomes and boosting performance of fast fashion players offering cheap, trend-led products.
Generation Y and Z live their lives publicly online. The impact of this is twofold; firstly, shareable experiences are now social currency and this is placing even greater pressure on share of wallet as consumer opt to eat out, attend events and travel instead of buying clothing. Secondly, consumers are more conscious of the brands they wear and what they say about their identity. Previously, teens used brands as a status symbol and although purchase decisions still revolve around social acceptance, these consumer groups are more experimental, approaching fashion in a similar manner to older consumer groups that use clothing as a way to reflect their own identity.
American Eagle is an example of a brand successfully capturing the attention of younger consumers through authenticity. Its Aerie Real lingerie campaign features regular sized models with no retouching and perfectly portrays a clear brand narrative that resonates with consumers and builds value, as sales increased by 11% in 2015.
Tapping into Gen Z
Brands may have lost the battle with generation Y as they graduate to a more mature market, but generation Z still holds great opportunity for teen fashion players. This consumer group seeks fashion inspiration from multiple sources, predominately online, with social media platforms such as Instagram and Pinterest. Style influencers range from It Girls such as Kylie Jenner and Gigi Hadid to bloggers and street style images. They have also grown up with parents immersed in the mini-me trend, dressing their children in clothes that resemble their own; this results in a generation of consumers that have a deep understanding of trends and styling, as well as brand awareness that extends beyond the typical teen fashion players.
In order to successfully tap into this consumer group, brands will need to distinguish themselves from the crowd by accentuating personality, placing an emphasis on authenticity and building a narrative that consumers can relate to; stand for something other than simply selling clothes. Creating shareable experiences will go a long way in appealing to this audience and help drive footfall to stores; for example, Primark provides free wi-fi and displays images of consumers’ #Primania posts on a screen in some of its stores. Additionally, developing a seamless online operation will resonate with these digital natives and a social media presence is almost non-optional. One thing is for sure; brands cannot afford to rest on their laurels if they hope to capture the attention of this demanding demographic.