A Guide to Gen Z Shopping Habits
Gen Zers, born between 1997 and 2012, are a critical demographic for luxury brands. Each year, their spending power increases, with Gen Z expected to represent 70% of luxury spending by next year.
As with every generation, Gen Zers are guided by a set of values that determine where they spend their money. The luxury brands that will resonate the most with this younger audience will be the ones that not only understand these values, but that authentically embody them.
This internet and social media-savvy demographic is attuned to the world of online marketing and advertising, able to see through inauthentic marketing initiatives that may not represent the true values of the brand. So, the key is to truly align your brand strategy with the generation-defining values championed by this core customer segment.
Below, we break down the key things that Gen Z look for in the brands they shop with and how luxury brands can cater their marketing to them.
What Characterizes Gen Z Shopping Habits?
Gen Zers believe that brands should take more responsibility for social and environmental issues, with a bigger emphasis on inclusivity, sustainability, as well as overall transparency.
Looking beyond impact, Gen Z also wants brands to be on the ball with technology. Having grown up with the internet, they’re early adopters of the latest tech and expect brands to be keeping up, making their buying experience as convenient and seamless as possible.
Finally, they want brands to have a personality. The brands that have a strong social media presence—with entertaining content and advertising campaigns—will be the ones that are remembered, gaining the customer loyalty of Generation Z.
How Luxury Brands Can Respond to Gen Z Shopping Behavior
Here are some tips on what your brand can do to win over Gen Z luxury shoppers.
BE AUTHENTICALLY INCLUSIVE
The luxury market is historically known for being exclusive and unattainable, but Gen Z is a generation that believes everyone should have a seat at the table. In fact, 76% of Gen Zers consider diversity and inclusion to be important, compared to just 46% of Boomers. So, how can you marry the prestige of a luxury brand with Gen Zers’ desire for inclusivity?
A good example of this is Gucci who announced a long-term global partnership with accessibility app Aira. They’re now providing free access to Aira’s visual assistance service for low-vision customers and employees. While this isn’t a “sexy” marketing campaign, it demonstrates that Gucci actually cares about its customers and employees—something that Gen Z celebrates.
Fashion designers are also working to be more size-inclusive, launching clothing lines that cater to a much wider range of sizes. Karoline Vitto and Sinéad O’Dwyer are two names that are leading the way in this space, featuring ‘plus-size’ models on the catwalks to showcase their collections.
EMBRACE SUSTAINABILITY AND CONSCIOUS CONSUMPTION
Sustainability is a big priority for Gen Zers. They’re seeing the effects of climate change that unsustainable business models are having on our planet and believe that brands will have a big role to play in reversing it.
Gen Z are aware that they can drive change by voting through their wallets and are choosing to spend their money with brands that are taking more sustainable and responsible action. In fact, 62% of Gen Z shoppers would rather buy from a sustainable brand, with a further 73% stating they’d be willing to pay more for sustainable products.
For this generation, sustainability is no longer a nice-to-have. Huge players in the luxury market like LVMH, Prada, and Mercedes-Benz understand this and are finding ways to innovate their business models to better align with eco-friendly values. These brands are using blockchain technology to make their supply chains more transparent, giving customers the ability to track the lifecycle of their products to ensure that they’ve been responsibly sourced and made. It also allows luxury customers to verify the authenticity of their products.
CHAMPION CIRCULAR FASHION
What’s even more sustainable than manufacturing sustainable products? Not manufacturing anything new in the first place.
It’s hard to remember now, but second-hand didn’t used to be so highly regarded. If anything, it was the opposite. But with Gen Z’s positive attitude towards pre-loved goods, the market is growing exponentially. Second-hand luxury was valued at over $26.1 billion in 2021 and expected to grow to $78 billion by 2031, with a CAGR of 11.48%.
The numbers don’t lie, with more than a third of Millennials and Gen Zs purchasing second-hand luxury goods over the past year and more than a quarter opting to rent luxury items.
Third-party platforms often facilitate the buying and selling of second-hand luxury items, with the actual brands themselves missing out on this valuable source of revenue. Moving forward, more luxury brands should consider offering second-hand goods—or the option to rent—to avoid losing out.
Championing circular fashion can be on brand for even the most luxurious of brands. Even Rolex has launched its own pre-owned program that allows customers to purchase second-hand watches. They have leaned into the initiative by highlighting the ‘built to last’ and ‘timeless’ nature of their products, with a guarantee of authenticity that consumers don’t always get on third-party reselling platforms.
BE INNOVATIVE WITH TECHNOLOGY
Having grown up in the age of the internet, Gen Zers are quick to adopt new technologies and apps. Not only is it interesting to use the latest tech, but it also makes their lives easier and more convenient—especially when it comes to online shopping.
The bar is always being raised in the world of tech, with Gen Z expecting luxury brands to be leading the way. They demand the best customer experiences from brands, delivered with the latest technology, both online and offline.
Gucci is a forerunner in adopting technological advancements. With their online vault, they’re carving out a space for their heritage brand in the metaverse, with virtual showrooms, galleries, games, purchasable NFTs, and even spaces to hang out.
CREATE COMPELLING DIGITAL MARKETING STRATEGIES
As we mentioned, Gen Zers enjoy the convenience of the internet, which means that most of them (52%) prefer to shop online rather than go to the store. With more people than ever visiting online stores over brick-and-mortars, luxury brands must deliver just as good of a customer experience.
A brand has roughly eight seconds to grab Gen Z’s attention before they give up and take their purchase elsewhere. This means building user-friendly, SEO-optimized websites that make it easy for customers to find the exact products they’re looking for, quickly.
Online shopping is no longer isolated to websites, with 43% of female Gen Zers having purchased via social media. Luxury brands should therefore treat their social media pages as another primary touchpoint for their younger audience, with a unified digital marketing strategy that ties seamlessly into their websites.
To create hype on their social media platforms, Coach launched a highly Instagrammable pop-up that was hosted within a retired airplane. The immersive experience was complete with illuminated dance floor tiles, a cockpit with a soft pink, luxurious aesthetic, as well as plane seats with so much legroom that that alone was worth a post on the grid.
Get Ready For Generation Z
To get ahead of the ever-evolving trends set by Gen Z, you’ll need a robust digital marketing strategy. Get in touch with the experts of demographic-focused marketing at Block & Tam today.
