The fashion industry would do well to pay attention to the preferences of Generation Z.
If millennials were a “whale” in financial terms, then Gen Z would be a “whale.” Given their disposable income, they are the best possible “get.” During earnings calls, brands and merchants love to talk about Gen Z, a generation reduced to a term to signal importance.
However, this generation is ignoring the clothing market. According to Consumer Tracking statistics from Circana (previously IRI and The NPD Group), apparel expenditure among U.S. consumers aged 18 to 24 has decreased faster than any other generation in the past 12 months. In comparison to the previous year, sales revenue from this group fell by 11%. now younger consumers were formerly the fashion industry’s biggest supporters, but nowadays many have moved on to other hobbies and sectors.
This transition from “status symbol” to “life satisfaction”
The 18-to-24-year-old demographic is shifting purchasing away from clothes and towards other categories, such as toys and cosmetics. Millennials are shifting their buying habits away from status symbol categories and towards things that provide greater meaning in their lives, as evidenced by this distribution of funds. In a nutshell, today’s Generation Z values a healthy and fulfilling life over material possessions.
Because they equate beauty goods with health and self-expression, this generation values them more. Circana polls indicated that 1 in 5 18-to-24-year-olds use cosmetics for self-care and that 41% plan to focus on skincare in 2023. New, boutique cosmetics companies promote customization and originality. Unlike expensive clothes, lipstick can be splurged on.
Toys assist Generation Z recapture the wonder and wonderment they felt as children, while cosmetics may make them feel more confident as adults. In 2022, “kidults,” or consumers aged 12 and up, contributed to about half of the industry’s growth and bought the most toys. Those who spent their formative years in the last three years coping with a global epidemic may find solace in investing in collectibles or constructing a LEGO DeLorean.
Gen Z seems to be making up for lost time during the pandemic by focusing on lifestyle, wellness, and even nostalgia. They are still taking vacations despite the rising cost of doing so. Eighty-two percent of millennials plan to do something in the next three months, with eating out, going to the movies, and traveling topping the list. Despite the slowing inflation, price increases have continued. More and more of Gen Z’s limited disposable income goes towards these more pricey dinners and vacations.
Resale and fast fashion e-commerce sites combine to create a perfect storm for consumers.
Clothing shopping with Generation Z can be like trying to hold water, what with their ever-changing interests and fashion fads. Predicting what would be popularly used to be much simpler, as fashions and color palettes would slowly make their way from the runways to the stores below. Today’s trends, on the other hand, come from many directions, with many smaller fashion movements and “cores” being started by consumers on social media and eventually making their way to stores once the fad has died down.
The success of resale marketplaces and “fast fashion” may largely be attributed to this demographic. Circana found that while pricing was the primary motivator for shoppers of all ages, those between the ages of 18 and 24 were more likely to purchase at resale and fast fashion stores due to the variety of styles available. Resale and fast fashion platforms provide young consumers with an abundance of selections at reduced prices, making them the ideal shopping environment for Generation Z.
The Successful Approach for Retailers and Manufacturers
Brands and retailers must, first and foremost, differentiate themselves from the crowd. Despite appearances to the contrary, Gen Z’s purchasing motivations are rather straightforward: they buy goods that are in line with their self-expression, make them feel good, and bring them joy. They are bombarded with a barrage of conflicting messages and orders from all directions, yet they are also free to choose the brands and goods that most closely reflect who they are or aspire to be.
The clothing industry naturally encourages consumers to feel good about themselves and express themselves via their purchases, but these ideals might need more emphasis. The fashion business must prioritize timeless design over fleeting fads. The garment sector has a huge opportunity to connect with Gen Z consumers on a more meaningful level if it can cut through the clutter and meet the generation’s need for customization and independence.
But the “most disruptive generation ever,” as Bank of America put it, has a major blind spot: its dependence on rapid fashion. More than half of Gen Z respondents in a 2020 survey by Vogue Business said they shopped mostly at quick fashion retailers including H&M, Gap, Zara, and Forever 21.
One in three millennials (Gen Z) believe they have a rapid fashion addiction, per Forbes. Trends, and the quick fashion firms that ride them, are spread like wildfire on social media, reinforcing the idea that quantity is more important than quality.