As millennials reach the peak of their spending power, luxury brands are rushing to develop strategies to win over the next generation of consumers: Gen Z. With the buying power of Gen Z estimated to surpass that of Millennials by around 2020, luxury brands need to understand and address the changing consumer trends of younger shoppers or risk becoming irrelevant. This article takes a closer look at why luxury brands must appeal to Gen Z or risk becoming irrelevant in the future.
1. Luxury Brands, Gen Z, and the Risk of Becoming Irrelevant
As consumer preferences and technology evolve, a number of luxury brands have begun to feel the effects of becoming out of touch with Gen Z. As this next generation of consumers comes of age, classical luxury brands face the challenge of adapting to their interests and persona to remain valid and relevant.
From a Gen Z perspective, luxury shopping behavior is much different from how previous generations shop. For this new generation of consumers, owning luxury goods is less about splurging or having the latest styles — it’s more about making meaningful connections and experiences with these products. Social proof, brand loyalty, and values all come into play, and luxury brands must facilitate these connections if they’re going to remain relevant.
- Marketing and Advertising: Luxury brands should include more marketing that’s relatable to Gen Z, such as influencer collaborations and targeted campaigns.
- Social Good: Brands must consider cultural and political issues that are important to Gen Z, aligning their products and messaging with positive social causes.
- Customer Experience: It’s also important to create a customer experience that focuses on convenience and personalization for this tech savvy generation.
2. Understanding the Growing Impact of Gen Z on Luxury Shopping
Gen Z shoppers present a new force in the luxury shopping sphere. Their trends, behaviors, and responses to market blasts must be carefully observed and interpreted by luxury retailers.
This generation has a hunger for ‘Instagrammable’ experiences. Brands need to think outside the box to bring the shine and glimmer of living. Their ideas need to feel not only socially acceptable but also desirable. Subtly branded social media experiences should be presented with alluring come-hither messages.
- Provide Stylish Visuals: Luxury is as much about visuals as about the product. Brands should focus on delivering creative, impactful visuals that draw in the audience.
- Think Dual Purpose: Gen Z is concerned with sustainability and using luxuries for a greater cause. Brands should research how to maximize social good with higher-end products.
- Focus on Humanity: The Gen Z luxury shopper wants to connect with the soul of the brand. Create stories that evoke the humanity in luxury living.
3. The Challenges of Crafting a Luxury Brand that Resonates with Gen Z
As digital natives, Gen Z is hard to win over with conventional advertising. That’s why brands have to deploy creative and innovative ways to relate to the younger generation. Crafting a luxury brand that resonates with Gen Z means breaking the traditional stereotypes associated with luxury and connecting with them on a level they understand.
One challenge is finding the right balance between remain luxury while appealing to Gen Z. Luxury and expense go hand-in-hand and that’s a significant barrier for many Gen Z consumers, and this challenge can be overcome in the following ways:
- Find alternative and disruptive models – Think outside the box when it comes to pricing and build more affordable luxury products.
- Shift focus from products to services – Luxury should be about the overall experience rather than focusing on the tangible.
- Develop an effective marketing strategy – Cater the message to Gen Z’s values and make sure it reflects their distinct self-expression. Take advantage of influencers and viral trends to spark their interest.
Given the unique demands that come with appealing to Gen Z, luxury brands can no longer rely on the traditional methods of connecting with customers. If luxury brands can adjust their approach to today’s reality and create a tailor-made message, then they stand to gain much from investing in this important demographic.
4. How Luxury Brands Can Embrace Gen Z to Avoid Irrelevancy
Luxury brands need to be aware of Gen Z as they are quickly becoming an affluent group. To stay relevant in an ever-evolving market, luxury brands need to carefully craft an approach that appeals to this unique generation and their values:
- Listen to Gen Z: To develop an appropriate strategy, brands should seek out insights directly from Gen Z—what are their motivations, aspirations, and interests?
- Embrace Social: Luxury brands should leverage new platforms such as Instagram and TikTok to reach the younger demographic and create digital experiences that they deem valuable.
- Create Purposeful Marketing: Brands should focus on creating targeted, meaningful, and purposeful marketing campaigns.
- Develop Millennial Activators: Luxury brands can find ways to activate their Millennial customer base to attract Gen Z.
Collaborate for Impactful Experiences: Luxury brands should strive to create meaningful collaborations with Gen Z focused brands to create unique experiences and content that resonates with the latest generation of customers. By grounding these experiences and campaigns in purpose, luxury brands can leverage the strength of this connection to ensure they stay relevant and continue to thrive.
It’s clear that luxury brands must alter their communications strategy to suit the tastes of Gen Z if they are to remain relevant to their target audience. The future of luxury in the digital age will undoubtedly be shaped by the tastes of this quickly-growing generation. To be successful, luxury fashion houses must stay one step ahead and discover clever, creative ways to appeal to Gen Z values. Only then can they ensure that their luxurious lifestyle will remain elevated and admired for generations to come.
