How to sell luxury to Generation Z?.

"Today's luxury needs to redefine the way it presents itself to be integral to different generations and cultural groups," says Suzy Menkes, international editor of Vogue.

The global luxury market is expected to reach 1.3 trillion euros (approximately 1.5 trillion dollars) by 2025, according to a 2019 Bain and Altagamma report.

In this market, millennials and Generation Z will form a significant percentage. Millennials, a generation that is establishing its foundations in the workforce, will represent 50% of the luxury market in 2025, while Generation Z will account for 10%, according to the same study.

However, Gen Z may be more interesting to the luxury sector, as they have not known concern and are equally digital as their predecessors. A study by the Workforce Institute of Kronos Incorporated shows that 56% of surveyed Gen Zers are optimistic about their professional future.

This generation is more inclined to spend more and save less.

The concept of luxury, a term often associated with items such as handbags or jewelry, has changed for this collective, acquiring a new meaning. For them, price or quality has taken a back seat, prioritizing uniqueness, inclusion, value, and personal expression.

Therefore, this collective has different purchasing priorities than the rest of the demographic groups. The first factor to consider is the hyperconnectivity of these users. Social networks are the playing field of Generation Z. In fact, 92% of all luxury brand interactions occur on Instagram, according to a Gartner L2 study.

To attract a younger audience, the brand Gucci spread a series of memes on social networks to promote the new Le Marché des Merveilles watch line. The images referred to the feeling of wearing a watch for the first time.

Social media has democratized luxury, taking the power from editors and handing it over to users. This collective wants to be involved in the product creation process. Customizing items is an opportunity for Gen Z to express their individuality. Thus, customers at the Blamain pop-up could access the latest brand sneakers, exclusively personalized by on-site artists in a space created for this purpose.

Although they are a markedly digital group, Gen Z also seeks real experiences, separate from the online world. Specifically, 80% of them enjoy these commercial experiences, according to a June 2018 Criteo survey. However, these strategies are focused on creating community, for example, the Hypefest streetwear festival. Streetwear is the combination of urban and luxury clothing, highlighting the new luxury standards among young people.

These experiences also extend to physical stores. Luxury brands seek more casual designs and create interactive tools in stores to attract Generation Z. Gucci has incorporated video installations, Augmented Reality, and tablets for designing handbags in its new New York store.

73% of Gen Zers would pay more for sustainable items.

On the other hand, Generation Z is very aware of the environment and concerned about climate change. According to a study by First Insight, 73% of Gen Zers would pay more for sustainable items. Brands are already working to implement ecological products in their lineup. For example, Prada announced that all of its nylon will be composed of 100% recycled materials by 2021.

Adapting early to Generation Z is a challenge that will bring great benefits in the future. Therefore, if a startup or brand wants to focus on this demographic group, it must know their needs and which campaigns attract their attention the most.

Thus, companies that advocate for sustainability, customize their product based on consumer feedback, use social networks as a nexus with Gen Zers, and seek real experiences, will have a lot to gain with this collective.