Rafaella De Guzman Melissa Gargiullo Master Fashion Promotion, Communication and Media
Focus on tomorrow’s consumers. What is Generation Z, what are its distinctive behaviour traits compared to Millennials, Generation X and Boomers and how to engage it?
TABLE OF CONTENT Abstract Case Studies - Adidas - Louis Vuitton - Tag Heuer - Nike - Baume Watches - Supreme - Gucci - Reformation - Off-White - Kith Analysis Conclusion Bibliographies
ABSTRACT
The next generation of consumers have very distinctive traits and as we will see in this research they are a big market. Therefore, brands have been trying to tap into this new generation that seeks sustainability, exclusivity, and uniqueness. This generation is known as being digital natives, activist, and customers that value experience. We will analyze 10 different brands and see how they have reacted to this new wave of consumers. Each case study either portrays a business model that fits this generation, a marketing plan or even special products. Things are prone to change since this generation is entering the fashion consumer market.
KEY WORDS • • • • • • •
Generation Z Sustainability Exclusivity Uniqueness Digital Natives Activists Value Experience
CASE STUDIES
Communication
Product
ADIDAS
LOUIS VUITTON
In 2016, Adidas teamed up with the UK rapper Stormzy, an Adidas partner, and the famous football player Paul Pogba. Stormzy posted various videos hinting at the future transfer of Pogba to the football club Manchester United, an Adidas partner as well (Lloyd, 2016). Consumers felt as if they had news on the transfer before anyone else through the videos posted. Since Generation Z values experiences, this preview was a way to target that generation (OC&C,2018).
Since Virgil Abloh became creative director of Louis Vuitton menswear, the brand keeps on blending sports with technology, two very important parts of Generation Z’s lives. The young generation has a love for vintage, and this is what Vuitton wanted to portray through the new LV trainers that are inspired by vintage Vuitton with a modern twist (Louis Vuitton Official Instagram, 2019).
Communication
Product
TAG HEUER
NIKE
The Swiss watch brand, Tag Heuer, featured model Cara Delevingne in their #dontcrackunderthepressure campaign in 2018. Tag Heuer used her as the face of the campaign because of her uniqueness and her representation of the LGBT community (Tag Heuer, 2018). In fact, 60% of Generation Z supports brands that treat issues such as human rights and sexual orientation (Havas People, 2017 p.15).
Summer 2019 will mark the release of Nike’s collection of sneakers promoting sustainability, one of Generation Z’s biggest concerns (Briguglio, 2019). The collection will offer sneakers made of sustainable materials decorated with artwork by Steve Harrington, representing the desire for a clean and healthy planet. The color of the shoes is made with plant-based dye, a natural material (Kicks On Fire, 2019). On top of this, Nike is on top of the list of Gen Z’s favorite apparel brands with 42% of the young generation choosing it over others (Steriova, no date).
Product
Shopping Experience
BAUME WATCHES
SUPREME
Baume Watches, part of the Richemont Group, is another brand that is really alluring for Generation Z, due to how sustainable they are and the customization they offer. In fact, Baume Watches are made of sustainable materials meaning they do not use precious and exotic ones. Their manufacturing processes is also sustainable (Baume Watches, 2019) and according to a recent study, 72% of Generation Z prefer spending on a product that was produced in a sustainable way (Green Match, 2018).
Supreme is Gen-Z’s favorite streetwear brand. Research shows that high-end streetwear boosted the global sales of luxury goods by 5% (The Business of Fashion, 2017). Supreme is all about the exclusivity of products since it is based on a “drop” sales model that makes products sell out in 5.2 seconds (Tuzio, 2019).
Communication
Product
GUCCI
REFORMATION
Gen Z and Y are expected to be accountable for 45% of total luxury sales by 2025 (Business of Fashion, 2018). Found a new way to connect with their customers through social media by not using it as a marketing tool but using social media as a brand extension, offering the customers what they want. In 2015 55% of Gucci’s profit came from customers under 30 (White, 2018).
Generation Z is inclined to buy product that have a sustainable value and transparent practices. They are even willing to spend 10% to 15% more (Sulima, 2018). Reformation is a sustainable-minded brand, they have a clear approach in production as well as design. They also consider the materials used, amount of water and electricity (Reformation Webpage, 2019).All the information is accessible in their webpage, making easier for consumers to trust them.
Communication
Shopping Experience
OFF-WHITE
KITH
As Supreme, Off-White is this generation favorite streetwear company. Off-White has a certain uniqueness, as well as strong brand identity. Off-White is more than a clothing brand, it positions itself as an art movement; products are artwork. Gen-Z consumers are attracted because of their brand culture and identity. Buying Off-White makes consumers part of a subculture that is expressive and confident (Tan, 2018).
Kith is a luxury streetwear company founded in 2011. The youngest consumer generation seeks for experiences when shopping, experiences that makes them feel comfortable. They seek for places that inspire them and they can feel true to themselves. Kith was able to tap into the Generation’s necessity of experience by adding an ice cream shop that they can personalize the flavors inside their retail space, making sure they don’t lose the luxury feeling and being authentic (Langer, 2019).
ANALYSIS
The future of fashion companies depends on the customers born between 2000 to 2010. They are known as Generation Z. This younger generation is known for being sustainable and activists, seek uniqueness as well as exclusivity, are digital natives, and value experience (Francis and Hoefel, 2018). Research shows that by 2020 Gen Z will account for 40% of all consumers (Thought Matter, 2018). Nowadays companies have to take an alternative approach when trying to reach this market. On that note, 50% of Gen Z have a preference for brands that take a stance on social issues, past generations don’t necessarily expect brands to express this (Yeomans, 2019). As previously mentioned Tag Heuer, with its campaign #dontcrackunderthepressure, acknowledges this aspect of Generation Z. Furthermore, 72% of Gen Z would rather spend on an item that was produced in a sustainable way, as we saw with the watch brand; Baume Watches (Green Match, 2018). Sustainable materials are also key to the creation of Baume Watches as it is for Nike. We previously mentioned Nike’s newest collection of sneakers made out of natural colors and textiles (Kicks On Fire, 2019). In the apparel aspect, there are several fashion companies tapping into sustainable practices. Reformation provides Gen Z with products that offer transparency on production and are able to share core values with this generation. Since social issues are not their main focus these past generations are not willing to spend as much as Gen Z in those companies that invest in aspects that concern them (Yeomans, 2019). Baby Boomers, Gen X, and Millennials are more focused on the quality of the garments they buy and on the relationship they have with brands (Michael Solomon, no date). 13% of Gen Z are more likely to select products that are sustainable while only 9% of Gen X would (Lacombe, 2019). Furthermore, Gen Zs are attracted to having an experience with a brand. We see that business models have shifted into a more experiential approach in order to tap those consumers. Take Adidas example, that previewed the transfer of a famous football player, also Adidas ambassador, through various social media posts (Lloyd, 2016). In fact, 67% prefer going in-store rather than
shop online, because of the experience they get from it (Wertz, 2019).That is why today we see a combination of apparel goods and retail experience, Kith is an example of a retail space that is able to communicate a sense of luxury when adding experience, that most brands are not able to accomplish (Langer, 2019). We also see a different kind of experience not only on the retail space but on how brands promote their products, take Supreme, using the “drop” business model. Supreme is able to create exclusivity by having a limited amount of products as well as create an experience with treating “drops” as a major event (Tyler, 2018). Baby Boomers and Generation X value in-store interactions but did not search for specific experience with the brand. Millennials in this aspect of seeking experience are similar to Gen Z, that is why both young generations are very powerful when it comes to sales (Thought Matter, 2018). Moreover, Generation Z seek having a unique style as well as having access to exclusive products. Louis Vuitton, as we have seen, understood that and mix tradition with modernity, creating a very special product. On the other hand, Off-White attracts Generation Z because in a way when customers buy from the brand they become part of an exclusive social group that values art and fashion. Even though it is not a high percentage 7.2% of Gen Zs value having a unique style, showing that other generations clearly do not share the same interest (PR Newsire, 2019). In addition, Generation Z, who were born after 2000, are igital natives they have never experience a time without technology. For them their smartphone is an extension of themselves, therefore they use it as entertainment and a way of connecting. We see Gucci being one of the few brands that is able to use social media as an extension rather than a tool to sell and promote products. That is why Gen Z is able to relate to Gucci. Most generations use technology as a tool to access information, as for Gen Z it serves other purposes (Ward, 2018). Millennials and Gen Z in this aspect are very similar to each other because Millennials engage with social networks to connect with others by notably sharing their purchases (Smart Insights, 2018).
CONCLUSION
Finally, after conducting an in-depth analysis of how fashion brands are targeting the future consumers we have a clear understanding of their needs and behavior. We notice that brands have shifted their traditional business models into a more flexible approach in order to target this new generation. It is clear that Generation Z knows what they want and therefore have pushed brands to be transparent, innovators, digital savvy and engaging. Although this generation is so young it already has an important impact on fashion. It is still unclear on how fashion brands will operate in the future but they will have to follow the next generations standards.
BIBLIOGRAPHY
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