Most likely. According to various recent studies held by trend forecasters, Gen Zers – the demographic cohort of people born between people 1995 to 2010 – are likely to "go back to basics," with mobilization, pragmatism, and physical contact, winning over individualism, idealism, and ever-growing digitalization.
The luxury industry is currently obsessed with catering to the needs of the Millennial and Gen Z generations, and understandably so: 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.
However, to capture the interest of their next-gen customers, the luxury industry will have to re-focus its attention on the physical products and brick-and-mortar stores, as reported by Bain & Company, while creating strong emotional ties with them. The Gen Z customer experience de facto needs to be "fluid" and seamlessly incorporate digital and physical brand experiences, such as the freshly launched Dior and Rimowa capsule at the Paris Champs-Élysées boutique, that has been promoted both physically in-stores and simultaneously online via three dedicated augmented reality lenses co-created with Snapchat.
"Members of Gen Z are true digital natives," added senior partners Tracy Francis and Fernanda Hoefel in their analysis for McKinsey. "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." However, this doesn't mean that Gen Zers are as digitally obsessed, see-now-buy-now-greedy, and self-focused as the Millennials. Gen Zers still value individual expression as the Millennials do, but they are radically inclusive, avoid labels, and prefer a sharing economy to ownership. In addition, they mobilize themselves for a variety of ethical and environmental causes, have fewer confrontations, and are all united by the willingness to unveil, understand, and connect through different cultural and socioeconomic truths.
"They believe profoundly in the efficacy of dialogue to solve conflicts and improve the world," Francis and Hoefel stated.
Compared to their predecessors, the "Zers" seem less sensitive to advertising and influencer marketing, and even less fascinated with technology. Official data released by communication agency Hill Holliday, which interviewed a thousand Gen Zers aged 18 to 24 in the United States, revealed that 34% of them have already left social media and 58% plan to delete their accounts. "The identity you promote on social media is fabricated. Maintaining this appearance is considered to be exhausting by this younger generation," explained Lesley Bielby, Hill Holliday's chief strategist, adding that this trend of leaving social media has also been observed to a lesser extent in China. According to another study by WPP’s data, research, and consulting division Kantar Millward Brown, Gen Zers are also likely to avoid advertising. In fact, 50% of the 16- to 19-year-olds have installed an adblocker on their laptops and mobiles devices. Intriguingly enough, the data pointed out that traditional media ads (outdoor, cinema, and print magazine advertising) have higher ratings amongst Gen Zers than all other digital media advertising, no matter whether it is display, search, desktop, or mobile.
Needless to say, the luxury and fashion brands are, therefore, facing opportunities that are as transformational as they are challenging. These studies all show that Gen Zers like to have full control of what they think, see, and buy, and are careful about which labels or products they allow to be part of their community. "Businesses must rethink how they deliver value to the consumer, rebalance scale and mass production against personalization, and – more than ever – practice what they preach when they address marketing issues and work ethics," Francis and Hoefel further stated in their report. In other words, if the luxury and fashion industries really want to remain relevant to their future generation of customers, they need to reevaluate their current operational systems as a whole. Debating on significant causes such as inclusivity, diversity, sustainability, and ethical transparency – or merely brushing the surfaces of these complex topics with standardized marketing tricks – will no longer be accepted by the Gen Z. "For Gen Z, the main spur to consumption is the search for truth, in both a personal and a communal form," Francis and Hoefel concluded. "Its search for authenticity generates greater freedom of expression and greater openness to understanding different kinds of people. This generation feels comfortable not having only one way to be itself." Now, the luxury industry just needs to feel equally comfortable adjusting to the Gen Z truth.