Companies are increasingly catering to Gen Z, as this pool of consumers – aged 12 to 27 – continues to gain greater power in the market. Despite millennials and Gen X taking the title of top-spenders when it comes to personal luxury goods, Gen Z’s spending currently amounts to $360 billion (up from $143 billion a mere four years ago) and is slated to continue to increase even further in the coming years. With this in mind, companies are looking to target this increasingly powerful demographic in a number of ways, including by adopting branding that speaks directly to them.
Among the standout ways that companies are looking to capture the attention – and spending power – of Gen Z? Launching new brands (or sub-brands) that are meant to appeal directly to this demographic. At the same time, the way the companies utilize branding assets looks a bit different than it used to; potentially signaling an effort by companies to make their presence known in the crowded and visually-driven market that is populated, in part, by Gen Z. Still yet, some forward-thinking brands are angling to amass ownership in the secondary market channel with part of their aim being to reach younger consumers that will one day be fully-fledged luxury buyers.
Appealing New Brands
In an effort to evolve, some companies, such as Coach, are trotting out new brands to appeal to Gen Z. For example, the New York-based fashion and leather goods brand debuted Coachtopia last year, a subset of its main brand that offers up bags, shoes, small leather goods, and ready-to-wear that is “designed and constructed to be circular – meaning produced with little-to-no new materials and leaving no trace behind,” according to Vogue. Or as Coach puts it, “Waste becomes design as we upcycle scraps into beautiful new things.”
Given that more than 50 percent of Gen Z consumers say they “prefer to buy from sustainable brands,” Coach’s “scalable model for reusing leather and other materials to create standout fashion items” (i.e., its Coachtopia property) is significant. “By designing products from inception with a circular mandate, Coachtopia is truly differentiating the brand and the product in the marketplace and has become a brand that younger shoppers are eagerly wearing and advocating,” Driscoll Advisory founder Marie Driscoll told Retail Touchpoints.
Coach is not the only company rolling out sub-brands in order to reach younger consumers: Heaven by Marc Jacobs makes the celebrated designer’s offerings obtainable for Gen Z shoppers, which is “super important now more than ever,” Heaven’s art director, Ava Nirui, told Vogue. While the brand is “not purposefully trying to get into the Gen Z mindset,” she said, it has, nonetheless, found a sizable number of younger fans. Or as fashion publication Culted put it, Heaven has “gripped” Gen-Z by way of its “buzzy, celebrity-filled campaigns, subcultural explorations and store experiences like no other.”
Branding & the Cult of Color
If Bottega Veneta, Barbie, and Charlie XCX (among others) are any indication, color is also a critical indicator of source – and culture – for consumers, especially those in younger, social media-centric demographics. Against that background, brands are rolling out new colors – or in some cases, reintroducing or revamping hues from their archives – in order to signal source (and the messaging that comes hand-in-hand with that source) to consumers in addition to their use of more “traditional” trademarks, such as word marks and logos.
This takes the form of well-established companies like Bottega Veneta splashing its longstanding green hue across its offerings, thereby, enabling consumers and the media, alike, to see the color – whether it is on marketing materials or woven leather bags – as an instant indicator of the Bottega brand.
At the same time, newer companies are increasingly launching with a signature hue at the forefront of their branding endeavors. Destree, the French women’s ready-to-wear and accessories brand created by Géraldine Guyot-Arnault and Laetitia Lumbroso, for instance, has made prominent use of an “anise green” on product packaging and other brand materials since its founding in 2016. Against that background and in light of Destree’s position among a group of budding luxury brands gaining traction among younger consumers, it comes as little surprise that the hue is prominently splashed all over its new flagship in New York.
The hue has garnered media attention, such as WWD’s recent coverage, which declared that “Destree is bringing its signature green to the Big Apple.” Meanwhile, Vogue revealed that the company’s Madison Avenue space “features … the brand’s signature monochrome green palette (that’s ‘Destree Green’ for insiders),” a nod to the importance of its color-centric branding.
The Role of Resale
All the while, companies are bringing their branding to the secondary market in an effort to cater to existing consumers and to reach new ones, including those in younger demographics. Rolex comes to mind here, as the Swiss watch titan has with the Swiss watch titan has introduced a certified pre-owned program in furtherance of which it offers up pre-owned watches that have been “inspected, refurbished and that meet the company’s minimum standards.”
As TFL previously reported with regard to Rolex’s resale initiative, it is no secret now that consumers, particularly Gen Z, place weight on brands’ efforts on the ESG front, including in the resale realm. This means that brands that actively participate in the secondary market stand to gain goodwill among this particularly-prized consumer demographic. Not only are younger consumers (i.e., Gen Y, Z, and Alpha) set to become the biggest group of buyers of luxury goods by 2030, they are starting to spend in luxury goods at a younger age.
Gen Z shoppers are making their first luxury purchases 3 to 5 years before their millennial counterparts, according to a Bain & Co. and Altagamma study. The availability of brand-owned resale may lure these consumers in now and/or pave the way for them to become loyal full-priced clients in the future.
Not the first to do so, Patagonia has been laying the foundation for what resale endeavors might look like this since 2012 when it launched its Worn Wear collection, which sees the company offering consumers the ability to “trade in, repair, and buy used Patagonia clothing and gear.” (And hardly just a vanity effort, Patagonia has managed to turn its Worn Wear program into a profitable venture, MoneyWatch previously reported, noting that “brands that have been in the resale space for a while [are] really getting to the stage where this is powering a meaningful part of their gross merchandise value,” as well as a meaningful way to attractive consumers’ attention and cash.)
The Takeaway: Smart companies are not looking to rely exclusively on their heritage and/or on branding as usual to reach increasingly-powerful young consumers.
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