Gen Z is coming of age – and earning potential. According to a recent Robb Report study, an astounding 41% of Gen Z in the US acquired a mechanical luxury watch, with an average spend of $10,870. They’re 21% more likely to use dealer financing options and 48% more likely to sell something they already own to buy something they want to own - the hustle culture inspired by the likes of Depop and Vinted.
Born between 1997 and 2012, Gen Z is a digital-first generation, ascending into adolescence and adulthood, in an era of huge upheaval from climate catastrophe, political instability, having lived through a global pandemic in some of their most formative years.
In less than three decades, they’ve taken in enough information to last them a lifetime, leaving them feeling anxious and immobilised. Excessive screen time is leading to increasing feelings of loneliness and a need to connect with communities in the real world.
They’re values led, they want to do good, they want to engage with brands who do good, they want to fight the climate fight and they’re anti-establishment. They want to change the world for the better, but they don’t know how.
They’re also young people; living, exploring, having fun, but financially burdened. They’re pulled in many directions, paralysed by cognitive dissonance. They’re hyper-connected digitally, but lonely in the real world. They eschew religion, but respond to ideas of community and spirituality. They are possibly the most complex, layered and evolving cohort a brand needs to think about and ultimately defined by their contradictory nature.
Here are three of my key learnings across strategy, content and engagement for all luxury brands to think about as they look to build progressive strategies that see their brands evolve well into the future.
1. Focus on brand-building and emotion-led storytelling that unifies your audiences regardless of demographic
People don’t just buy what you sell, they buy what you stand for. It’s clear Gen Z can’t be looked at or catered for in isolation to the detriment of core commercial spending power (from Millennials and Gen X who account for the majority of global luxury spending), nor can they be ignored. They will have the future spending power. So, how do you navigate multiple audiences as a brand, building modernity and relevancy whilst looking after the core spenders?
Luxury brands need to look, first and foremost, at what unifies their audiences instead of what pulls them apart – what are the universal insights and values? This will ensure a brand neither becomes fractured, nor fragments, by trying to be everything to everyone, but has a core that anyone whether 22 or 72 can relate to. There will be surprisingly more similarities in values and behaviours than brands (or their audiences) expect.
Secondly – but equally importantly – luxury brands need to focus on emotionally engaging storytelling. It's very easy for luxury brands to rest on their laurels and continue to pander to category tropes to sell product in traditional ways, especially that cater to a loyal fanbase. Where relevant in terms of media, brands can, of course, still continue to tailor and target specific audiences groups, whilst retaining their core.
Loewe has managed to do all three; from Dame Maggie Smith being shot by Jurgen Teller to Dan Levy and Aubrey Plaza's short-form filmic sketch taking on the perennial issue of how to pronounce the brand's name, Loewe is managing to feed a core with purchasing power whilst attracting the next generation of spenders, both culturally and commercially.
Liquid Death has crafted a strong brand identity by choosing a radical departure from its category norms. It's a strategy that's paid off – founded in 2018, the US-based water-in-a-can brand is now valued at over $1bn. It's a brand that approach its marketing with a clear tone and narrative “on their mission to murder your thirst", but also spoke to Gen Z concerns from their “death to plastic” and “infinitely recyclable” messaging on packaging.
Their strategy was essentially to be radically entertaining and make hydration cool. The magic in their madness is that, whilst their strategy was to target Gen Z and Millennials, it's the parents buying it for their kids and, in turn, themselves, that has increased its distribution to the likes of Whole Foods.
Or, as Mike Cessario, Founder of Liquid Death, put it in a recent interview with Forbes: “Once you build a core audience, you’re giving people who aren’t part of that culture, like a soccer mom, permission to participate in this cool, rock and roll brand”.
And finally, we have to discuss Gucci. During the tenures of both Tom Ford and Alessandro Michele, Gucci was amongst the best of the best in brand storytelling. They pushed boundaries, emboldened and solidified their brand story of ‘freedom in self expression’, and built relevance around a unified ethos. Under Michele especially, Gucci became one of the most innovative, disruptive and controversial brands in the world, attracting the attention of Gen Z like no other fashion brand had managed to do for a long time. But Michele’s focus was excessively on Gen Z to the detriment of the its core (purchasing power) audience and ultimately the brand lost its cache.
All three clear examples why its important not to build strategies solely around Gen Z but a core audience mindset and narrative approach.
2. Luxury brands need to break the fourth wall and engage with their audiences (and especially Gen Z) on a human level
While a lot of you will be thinking Liquid Death is a lovely example but not exactly luxury, it’s a clear example of how the modern luxury mindset needs to evolve. What the brand has been brilliant at is using social media to invite engagement, conversation, reaction and ultimately learning and insight.
Luxury brands need to consider themselves more like ‘people’ – to have a core personality and be known for that personality, but to have the ability to flex this personality depending on the scenario or situation. Social media enables a more informal, relaxed, two-way dialogue where humour and a more transparent approach can be adopted to break the fourth wall and invite people in.
Loewe (again) is clear that TikTok is their playground to break rules do things that are left field. The brand will lean into trending sounds, use content creators outside of fashion and harness its FROW to create unscripted, playful content that lets people see beyond the polished and perfect world that fashion portrays.
3. Gen Z is an audience that luxury brands need to spend quality time with
It’s easy to run hundreds of focus groups and define a set of values of who we think they are and what they care about – but the reality is that Gen Z is much like any other generation, yet also a complex, layered and evolving cohort, most obviously defined by their contradictory nature.
Brands need to engage with them on a regular basis in the real world, not in the confines of pre-structured focus groups. Whether it’s appointing a Gen Z council, working with editorial teams or adopting ethnographic research methodologies, the key to understanding them is to commit to understanding them as real people in the real world.
Diesel’s resurrection was built on a focused brand and with deep Gen Z insight. The Italian clothing label has undergone a major journey over the past two decades, from being a must-have fashion brand in the 2000s – thanks to its provocative advertising and iconic pieces – to gradually losing its sparkle in recent years, climaxing in bankruptcy just before the pandemic. Now, however, under the ruling of Bruges-born creative director Glenn Martens, Diesel has been resurrected as one of the stars of the Milanese fashion scene.
“My competitors aren’t Levi’s or Balenciaga,” the newly appointed CEO Massimo Piombini told Vogue Business back in 2020, “My competitors are the gym, Netflix. Diesel has to be a part of your life.”
This idea came as the brand motto: “For Successful Living” was rebooted in Diesel campaigns in 2020, with Piombini calling for more entertainment led and authentic marketing. Piombini didn’t want to create hype for a short period; he wanted to create a strong brand with loyal customers who will always buy Diesel, while at the same time staying relevant to attract new customers (i.e. Gen Z).
In the years since, Diesel has enjoyed a surge in popularity with a younger audience. What accounts for this was not just the brand's focus on Gen Z, starting by truly looking to understand them. To do this, the brand undertook extensive ethnographic research on a global scale that aimed to comprehend how Gen Z live their lives – looking at them as people and now just ‘consumers’ to buy.
It has been said that Gen Z has disproportionate power and influence, yet they need to be understood as people first in their real world settings. They’re complicated and contradictory and the brands that help them navigate that in an open and transparent way will be successful.
Brands must focus on ensuring their core narrative – and what they stand for – is clear, or be transparent in their journey to defining that.
Most importantly, brands must approach audience development through the lens of what unifies their separate audience segments, not what pulls them apart. By discovering the bridge that unites them and defining it, brands will be able to continue to feed their core whilst growing relevancy and awareness amongst their future audiences.
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