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Fri - 11 Sep 2020

Conscious Consumption: Why Is Gen Z So Critical?

How the new generation is challenging the luxury industry

“Tired of Boomers bunching Gen Z and Millennials together, because personally I don’t want to be associated with people who still think that Harry Potter movies are a personality trait,” TikTok user @mayalepa famously stated in her viral video post. Earlier this summer, an inter-generational social media battle went viral, reminding us once again that both demographics cohorts do not like to be put in the same box. And yet, luxury and fashion brands tend to put both generations in the same basket when it comes to their communication and sales strategies. Today, the two generations represent 30% of the global personal luxury goods market in the industry – a percentage that Bain & Company expects to rise to 45% by 2025. Gen Zers, however, are likely to want to distinguish themselves from Millennials. In fact, the values that define Gen Zers and Millennials are quite the opposite of each other with mobilization, consciousness, and physical contact winning over individualism, idealism and ever-growing digitalisation. 

“Members of Gen Z are true digital natives,” senior partners Tracy Francis and Fernanda Hoefel of McKinsey, stated in their 2019 annual luxury report. However, this doesn’t mean that the so-called “Zoomers” are as status-obsessed, consumption-greedy, and individualistic as Millennials. They still value individual expression, as Millennials do, but are radically inclusive, more likely to avoid labels, and prefer a sharing economy to ownership. Still, according to McKinsey, they care for a variety of ethical and environmental causes, and are united by the willingness to connect through different cultural and socioeconomic truths. “They believe profoundly in the efficacy of dialogues within communities to solve conflicts and improve the world,” Francis and Hoefel stated.

With Gen Z showing the way forward, luxury and fashion brands are facing opportunities that are as transformative as they are challenging. The study by McKinsey not only shows that Gen Zers like to have full control of what they think, and are careful about which labels they allow to be part of their community, but they also seek authenticity first and foremost. “From earliest youth, they have been exposed to the internet, to social networks, and to mobile systems. That context has produced a hypercognitive generation very comfortable with collecting and cross-referencing many sources of information and with integrating virtual and offline experiences,” Francis and Hoefel continued.

With authenticity so high on the Gen Z agenda, members of this generation consider it a shared responsibility to uphold and protect the authenticity of the label they support in any content created – and also hold them accountable for their mistakes. However, today’s luxury and fashion brands work with an international influencer market that is rife with fraudulent behaviour, (the purchase of fakes likes, views and followers on social media, for instance), and that lacks in transparency when it comes to sponsored contents and advertising, which often tend to be presented as organic contents. “For Generation Z, the main spur to consumption is the search for truth, in both a personal and a communal form,” Francis and Hoefel continued. “Businesses must rethink how they deliver value to the consumer, and, more than ever, practice what they preach when they address marketing issues and work ethics.” Merely brushing the surfaces of complex luxury industry topics — such as inclusivity, diversity, and sustainability — will no longer be accepted by the Zoomers.  “This generation feels comfortable having not just one way to be itself. Its search for authenticity generates greater freedom of expression and greater openness to understanding different kinds of people,” Francis and Hoefel concluded. Now, the luxury industry just needs to feel equally comfortable adjusting to the new Gen Z truth. A truth, which is rooted in conscious consumption.