What Fashion and Luxury Brands Should Know About Gen-Zers

October 2023

Born between 1995 and 2009, Generation Z (Gen Z) is coming of age alongside significant changes in post-pandemic economy, giving rise to the Gen Z luxury and fashion consumer’s tendencies for price sensitivity, individualistic expression, active participation in user-generated content, and phygital spaces. The rise of Gen Z-geared brands highlight this cohort’s preference for sustainable features. Social media and social commerce are essential to succeed with Gen Z luxury and fashion consumers.

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This report comes in PPT.

Key Findings

Consumption patterns and preferences are evolving as Gen Z-ers come of age to be one of the biggest cohorts

Generations Z and Alpha will account for 45% of the global population by 2030 and will be the largest target segment for luxury and fashion brands. These generations’ values and preferences are significantly different to those of their predecessors, and brands are being challenged to adapt their needs in terms of products, distribution, marketing and engagement.

Gen Z pricing sensitivity will continue, giving mass tiers an advantage but luxury opportunities to diversify

Gen Z may be price sensitive, but they exhibit a willingness to spend on products that are on trend and can contribute to their health and emotional wellness. Luxury and fashion brands that deliver on efficacy, longevity, quality and include sustainable features, accessible price points and omnichannel strategies resonate the most with this cohort.

Gen Z consumers want to express their individualism and want their voices heard

As the importance of one’s mental health and self-acceptance has come to the fore among younger generations, brands that support such causes are more likely to offer a vision that resonates well with Gen Z-ers and can gain their favour. Gen Z view wellness more holistically and as an amalgamation of physical, emotional, mental, social and spiritual health.

Gen Z consumers expect digital and physical luxury and fashion worlds to work together seamlessly

Gen Z’s luxury and fashion consumer journey is heavily skewed towards the smartphone, social media, especially TikTok (Douyin in China), and early adoption of new technology and digital platforms (eg metaverse). Despite heavy dependence on digital, Gen Z shows a yearning for human interaction, which helps explain demand for a phygital approach to shopping.

Building customer loyalty in Gen Z can be difficult

Building customer loyalty among this cohort, which likes to experiment with different brands, can be difficult, especially in an oversaturated market. However, in a transactional market, the success of luxury and fashion brands depends on their ability to combine exclusivity, loyalty, quality and storytelling with an effective social media strategy.

Key takeaways
Gen Z make up nearly a quarter of global population, led by Middle East and Africa
Gen Z to see record growth in gross income
Gen Z helping to power emerging markets into the top 10 global economies
Gen Z’s coming of age coincides with significant dynamic changes in post-pandemic economy
Inflationary pressure remains high, exacerbating Gen Z price sensitivity and spending power
Spending power of Gen Z consumers challenged by youth unemployment and income
Who is the Gen Z luxury and fashion consumer?
Heritage luxury brands thrive in age of trendsetting and social consciousness among Gen Z’s
Value remains key for Gen Z consumers supporting the importance of heritage brands
The rise of the influencer ecosystem in luxury and fashion driven by Gen Z
Influencer marketing and compelling storytelling to capture the Gen Z share of wallet
Pre-owned luxury poised to gain more prominence within the realm of luxury and fashion
Mobile mavericks: Digital native Gen Z consumer pathway thrives on the smartphone
Building emotional loyalty and nurturing brand advocates is the way forward for Gen Z
The space between “masculine” and “feminine” in beauty and fashion challenged by Gen Z
Embracing diversity and unveiling the power of Gen Z in shaping our future
Tiffany & Co captures the attention of Gen Z- ers with its blockbuster collaboration
Balenciaga joins the group of luxury brands venturing into resale with its Re-Sell platform
Ugg and TOMS work with LGBTQIA+ advocates for Pride and year-round
Ethics increasingly inform Gen Z purchasing decision
Changing sustainability regulations put luxury brands under increasing pressure
Luxury bags and leather goods continue to reign as leading alternative asset class
Inflationary pressures encourage Gen Z exploration in alternative product access strategies
Luxury and fashion must improve their ESG practices to adhere to Gen Z scrutiny and needs
Mud Jeans frontrunner in “circular denim” as fast fashion loses appeal among Gen Z
Experiences and lifestyles offer major growth opportunities among Gen Z
Gen Z interest in holistic approach to health fuels demand for luxury wellness propositions
Impact of stress and anxiety on Gen Z health drives need for better emotional wellness
Luxury resort Ahau Collection introduces new NFT loyalty scheme to attract Gen Z tourists
Luxury skin care brand Dr. Barbara Sturm taps into Gen Z through microbiome skin care line
Gen Z digital fluency and comfort with technology drive major changes in luxury and fashion
Leveraging social media and s-commerce to cultivate Gen Z engagement in fashion
Livestreaming and social commerce drive Gen Z luxury and fashion consumption in China
Gaming goes mainstream and increasingly crosses into realms of luxury, fashion and travel
Hugo Boss invests in greater personalisation with a new AI Digital Campus in Portugal
YSL Beauty: Nurturing exclusivity with NFT loyalty approach to connect better with Gen Z
Generation Z: Market projections by population and share of population, 2023/2028/2033
China as world's second largest affluent population to boost future Gen Z wealth
Gen Z child-free social structures could translate to higher discretionary expenditure
Understanding the Gen Z luxury and fashion consumer: Challenges and solutions
Key takeaways

Luxury Goods

This is an aggregation of: Personal Luxury, Fine Wines/Champagne and Spirits, Luxury Cars and Experiential Luxury.

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