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Gen Z and millennials – roughly those aged between four and 40 – are an important and influential group.

Never has so much energy been poured into exploring the likes and dislikes of a generation of shoppers. This is with good reason.

Combined, these generations wield around $350bn (£264bn) of spending power in the US alone – around $150bn (£113bn) by Gen Z and around $200bn (£151bn) by millennials – research by McKinsey & Co shows.

And by 2020, Gen Z will account for 40% of global consumers.

But what do these digital natives want from the fashion industry? How do they like to shop for clothes, shoes and accessories? Which channels do they prefer: online, stores or both? And how important are issues such as sustainability, diversity and equality to their spending?

This data-led consumer research report explores all this and more. From the evolving similarities and differences between them, to 2020 trends and Covid-19 related shifts, as well as where the opportunities lie for brands and retailers going forward.

We hope you find the report useful. Please email any feedback or questions here to help us continue improving our Drapers Bespoke research.

Graeme Moran, associate editor, Drapers

For the purposes of this report we define members of Generation Z (Gen Z) as anyone born between 1995 and 2015, making the youngest four years old and the oldest 25. Millennials are those born between 1980 and 1995, and are roughly aged 26 to 40.

We surveyed 2,000 consumers aged 18 to 40, split evenly between Gen Z (aged 18-25) and millennials (aged 26-40).

Chapter 1

2020 SHIFTS

As we explored in our first Gen Z and Millennials report in 2019, there are many different stereotypes of consumers in their twenties and thirties.

Depending on whom you ask, Gen Z (aged 18-25) and millennials (aged 26-40) can be described as anything from earnest eco-warriors to social media obsessives, from lovers of expensive convenience-focused services such as next-day delivery, to thrifty second-hand bargain hunters.

While we proceed with the usual amount of caution when it comes to making broad-brush statements about age groups, we wanted to use this report to explore some of the trends, themes and contradictions apparent in younger shoppers’ behaviour.

This is important, because between them, shoppers in their twenties and thirties will represent a powerful and influential majority of retailers’ consumers for the coming decade.

Sustainability still on the rise

One of the most notable things to emerge from our data this year is consumers telling us that values-driven purchasing continues to rise. Ecological and ethical sustainability, as well as external-facing and fashion's in-house equality and diversity, continue to grow in importance to younger consumers.

While sustainability initiatives may have taken a back seat for some parts of the fashion industry this year as they cope with the impact of Covid-19, the pandemic has made them more important than ever to young consumers.

At the same time, the US-born Black Lives Matter movement, and closer to home the uncovering – again – of slavery in Leicester factories, has driven fairness, equality and the need for ethical labour conditions up the agenda: 81% of Gen Z shoppers say these topics are important to them, edging up from 80% in 2019.

farfetch 2Farfetch

As Celenie Seidel, senior womenswear editor at Farfetch, says: “There is a heightened awareness around sustainability and conscious consumption in the wake of the events of the first half of 2020. The pandemic has brought about many unexpected changes to the industry and gave pause for thought when the world slammed its brakes on.”

While the balance sheet has to be retailers’ first priority as they navigate their way through the pandemic, they should remember this as soon as light becomes visible at the end of the tunnel. The pandemic, albeit challenging, offers an opportunity for radical change – as they come out of it, retailers and brands should be putting ethical trading and values at the heart of their organisation.

Pandemic fallout

While ethical fashion remains fundamental, things are still up in the air as a result of coronavirus. The effects of the pandemic on younger shoppers are still developing, but those in their mid-twenties and under have been – and will continue to be – among the hardest hit as the economic fallout continues. We explore the impact of coronavirus further in the next chapter.

The pandemic is also likely to accelerate other trends, such as younger people’s fondness for online shopping, particularly as lockdowns and social distancing measures continue to impact the physical experience in fashion stores.

Lucy Aylen, founder of online-only womenswear brand Never Fully Dressed, which caters to mostly millennial customers, says: “As a business we saw a steady increase in sales throughout the main lockdown stages, with this continuing to sustain whilst restrictions [lifted]. Customers have gone from wanting a new outfit to make them ‘feel good’ to now looking forward to holidays and staycations, and wanting [to update their] wardrobe.”

Social distance shopping at Kurt Geiger stores

But physical shops should not be written off yet – in chapter four we examine why young shoppers are channel agnostic. Gen Z – those under the age 26 – are particularly keen on the social side of stores, as well as the other benefits of physical over digital.

Ultimately, both Gen Z and millennial groups are shopping across channels, and will pick whichever happens to suit them in any given moment.

Jonathan Reynolds, associate professor of retail marketing at the University of Oxford’s Saïd Business School, says stores will survive, but will need a different economic model to do so: “The economic equation will need to shift to make those spaces more affordable for retailers. Turnover rents, for example, and other arrangements might need to change so that stores take account of online sales.”

However, he adds that humans are naturally adaptable and may get used to the new Covid-secure shopping conditions: “When security scanners were introduced at airports, everyone thought we’d all stop flying. The human capacity to normalise situations means that if this lasts more than a year, we are likely to get used to it.”

Inspiration and new models

While life in the real world has slowed and changed, life online continues at its usual pace. This year, social media platform TikTok has come from seemingly nowhere and now nearly a third (29%) of Gen Z shoppers use it for fashion inspiration. In chapter six, we dissect the latest data around social media use in fashion for both age groups.

Finally, we explore the continued growth of renting and reselling fashion, buying second hand and the move away from ownership. Another longer-term trend, our data shows that new retail models continue to gain momentum in UK fashion.

Gen Z and millennials are paradoxical shoppers: by turns lovers of instant gratification and made-to-order slow fashion, and of celeb-driven, fast trends via online behemoths and smaller sustainable brands and emerging labels, they are difficult to define. One thing is for certain: they are anything but boring.

Chapter 2

Coronavirus impact

The recession following the coronavirus pandemic is likely to hit the youngest hard. Gen Z, those age 25 and under, are among the most likely to lose their jobs, or to find it harder getting a job in the first place.

Despite the passion for the environment and other emerging trends impacting shopping, the fallout of Covid-19 and the resulting recession could limit their ability to use their purchasing power – at least in the short term.

But while the longer-term impact may hit young shoppers hard, they initially kept spending as lockdown hit.

At Asos, for instance, group sales grew by 10% to £1bn in the four months to 30 June 2020, and full-year revenue was expected to grow between 17% and 19%. This was echoed by strong performances at other etailers, such as Very Group, where retail sales grew by 28% in the fourth quarter to 30 June 2020.

Just under a quarter of our Gen Z (aged 18-25) and millennial (aged 26-40) shoppers said they bought more fashion during the Covid-19 lockdown period, a behaviour that was mostly driven by Gen Z – 29% of shoppers aged 25 and under bought more during Covid-19. A further 30% of both Gen Z and millennial groups kept their spending on fashion at normal levels.

This was, however, balanced by nearly a third (31%) spending less than they normally would on fashion, a behaviour that was marginally more likely among millennials.

In addition, 14.5% (13% of Gen Zers and 16% of millennials) said they bought nothing at all during lockdown.

Looking forward, as restrictions lift, a majority of both Gen Z and millennial shoppers expect to spend the same amount on fashion as before Covid hit.

Online 40% of Gen Z respondents and 43% of millennials expect to spend the same amount on fashion as before Covid-19.

However, the younger shoppers are slightly more gung-ho: 28% of Gen Z shoppers expect to spend more online on fashion, compared with 24% of millennials. By comparison, 24% of millennials expect to spend less online on fashion, compared with 21% of Gen Z respondents.

Unsurprisingly, there is a slightly less heartening story to tell about stores. Just 15% of millennials, and 22% of Gen Z, expect to spend more on fashion in physical stores.

Meanwhile, 40% of millennials and 36% of Gen Z shoppers expect to spend the same as before Covid-19 on fashion in physical stores, and millennials are more likely to spend less – 36.5% expect to do so.

Looking ahead, the coming 12 months are likely to be unpredictable. But while survival has to be the first priority, there are trends beyond coronavirus that continue to develop.

Chapter 3

GEN Z VS MILLENNIALS

Reports often tarnish younger shoppers with a reputation for a lack of brand loyalty: the stereotype is of youngsters as butterflies, trying first one brand then another as they explore their personal style. But this is not necessarily the case. In our survey, it was the older shoppers in the Gen Z (aged 18-25) and millennial (aged 26-40) bracket who reported being less loyal.

Compared with Drapers’ 2019 results, overall loyalty has fallen slightly year on year, although just under half of respondents – the largest proportion – would still describe themselves as “relatively” loyal.

Surprisingly, in 2020, it is older shoppers who report being less loyal. Only 26% of millennials describe themselves as loyal to fashion brands and retailers, compared with 32% of Gen Z shoppers.

By comparison, 28% of millennials say they are rarely loyal, compared with just 18% of Gen Z shoppers.

What drives loyalty among these shoppers? As ever, price, style and quality are most important. Style is more important for younger shoppers than older ones, and price and quality emerge as top for millennials.

Across the board, Gen Z shoppers report a better response to almost every element that drives loyalty – perhaps a reflection of the relative cynicism of the slightly older millennial shoppers who have grown less responsive to discounts and the lure of buzzy brand names.

Notable among these results is the importance of sustainability, diversity and equality to Gen Z shoppers in terms of loyalty.

A fifth (20%) of Gen Z respondents said sustainability is likely to drive loyalty for them, compared with 17% of millennials. And 24% of Gen Z said evidence of equality and diversity would drive loyalty toward fashion brands and retailers, compared with 15% of millennials.

Budgeting and payments

In light of the current economic upheaval, we thought it would be interesting to ask this generation of shoppers for their thoughts on budgeting and spending when it comes to fashion.

When it comes to budgeting for fashion purchases, younger shoppers are marginally less likely to follow a strict budget. However, there is not a huge gap: both groups, having grown up during a difficult time economically, are aware of the need to budget.

Around one-third of Gen Z (34%) and millennials (33%) say they spend what they want on fashion; 32% of Gen Z and 36% of millennials have a “strict” budget, and 33% of Gen Z and 30% of millennials have a “loose” budget.

Consumers’ attitudes towards budgeting will be an interesting area to track as the Covid-19 pandemic continues to unfold.

Different payment options, including deferred “buy now, pay later” capabilities such as Clearpay, Klarna or Laybuy, are growing in prominence, and more and more retailers are offering their customers the convenience of a range of choices.

For example, Gen Z and millennial favourite retailers Boohoo and PrettyLittleThing now offer shoppers a wide variety of payment options that include Clearpay, Diners Club International, Klarna, Laybuy and PayPal.

Gen Z are more likely to respond positively to payment options such as “buy now, pay later”, or the ability to pay in instalments – 68% of Gen Z shoppers say they are “very likely” or “quite likely” to bring a fashion purchase forward if they can pay in instalments, compared with a still-significant 62% of millennials.

This age group of young shoppers are also broadly comfortable with using deferred payment services: overall, 73% are “fairly comfortable”, rising to 76% of Gen Z. One-fifth (21%) of Gen Z and millennials said they are “very comfortable” making purchases using a deferred payment method.

Across Gen Z and millennials, 40% use deferred payment methods services sometimes or often, and a further fifth (22%) would consider it.

While millennials report marginally higher usage of these services, Gen Z are more open to using them in the future, with 24% of Gen Z shoppers saying they would consider using them in the future.

As budgets tighten and recession bites, deferred payment options online will no doubt continue to grow in prominence, across fashion and beyond. Brands and retailers should be prepared.

There is also significant appetite to use deferred payment methods, such as “buy now, pay later”, in physical stores: 53% of Gen Z and millennials say they would be likely to use them in fashion shops.

Price, style and convenience 

What do Gen Z and millennials value most when shopping for fashion, and are their similarities greater than their differences?

In this question, we asked respondents to rate each of these answers from 1 (not important at all) to 5 (very important). The graph above shows the percentage of each group that rated each answer a 4 or 5, to give an indication of what is most important to Gen Z and millennial shoppers.

Price and style remain the most important aspects when buying fashion, as they have for generations.

However, convenience is now nearly as significant, particularly for millennials. Sustainability and diversity are also now important, but slightly more so for Gen Z.

For the most part, however, the answers suggest that Gen Z and millennials are broadly on the same page when it comes to buying fashion – the differences appear in the detail. We will be delving deeper into some of these in the chapters to come.

Chapter 4

CHANNEL AGNOSTIC

While online shopping is edging ahead as the preferred channel for Gen Z (aged 18-25) and millennials (aged 26-40), they are a resolutely channel-agnostic group of shoppers. They use online and stores for different reasons, and get different benefits from both when it comes to fashion.

Both group’s preferences are spread equally across the channels, highlighting that Gen Z and millennials are resolutely omnichannel shoppers. They are channel-agnostic, and likely to move between shopping online and in store for fashion.

Overall, 40% of Gen Z and millennials prefer to shop online, compared with 36% at physical stores.

A quarter of Gen Z and millennials shoppers do not have a preference between online or physical stores.

However, as discussed in chapter two, Covid-19 looks set to help tip the balance slightly more in online’s favour, perhaps because physical store shopping for fashion has, at least for the foreseeable future, changed so much.

Face coverings are required, social-distancing measures are in place and many changing rooms are not in use, creating several hurdles for retailers, particularly as the ability to try on clothes is a large part of the appeal of visiting physical stores, and given the fact that the social element of shopping is a draw for many Gen Z and millennial customers.

Just over a quarter (26%) of Gen Z and millennials expect to shop for fashion online more than before Covid-19 as restrictions lift, and 42% expect to shop the same as before.

Millennials are more likely than Gen Z to shop less for fashion online than before Covid-19 – a quarter (24%) of millennials plan to tighten their belts when it comes to fashion.

The numbers are a little lower for physical store shopping post-Covid. Only 18% of Gen Z and millennials expect to shop more in physical stores for fashion, 38% expect to shop in stores the same amount as pre-Covid, and a third expect to shop in stores less.

Millennials are less keen than Gen Z to return to bricks-and-mortar stores: 36% of the 26-to-40 age group expect to shop less for fashion in stores than they did before.

It remains to be seen whether this snowballs into a long-term trend, or whether it is a shorter-term consequence of the coronavirus lockdown and social-distancing measures.

Some retailers will be concerned that Covid-19 is likely to accelerate the demise of stores, as many consumers find the relative safety of shopping online a better option while the pandemic persists.

Gen Z are more likely than millennials to find shopping online for fashion fun and relaxing, although it is the ability to shop around and find the best prices online that both groups like the most: 52% of both Gen Z and millennials said they like shopping around for the best price online.

Gen Z also like discovering new fashion brands and retailers online more than their millennial counterparts, as well as the ability to access more options than they can in physical stores.

The biggest draw for millennial shoppers, however, is the online channel’s convenience – 56% of millennials rate convenience highly, compared with 49% of Gen Z.

This is one of a few areas where convenience emerges as more important for millennial shoppers than it does for Gen Z – possibly because, with so many of the millennial group now over 30 years of age, many will be busy balancing professional and family lives, and might prefer time-saving services.

A deeper engagement with fashion is evident in Gen Z’s responses to this question. They want more content, from styling advice (36%) to trend news (24%), as well as more detailed product information (28%).

Millennials, again, are keen on convenience (32.5%).

Two further trends emerge here. First is the growing importance of fit technology. Fit has long been a bugbear of online fashion shoppers: 42% of the total cohort of Gen Z and millennial shoppers would like more help in picking their correct size – this is up from 32.5% in 2019.

Second is Gen Z’s desire for better imagery and video online, which exceeds millennials’ desire for these things: 41.5% and 33.2% of Gen Z shoppers want better images and video respectively, both of which are likely to contribute towards an improved understanding of the fit of the clothes.

Finally, this is one of several questions where Gen Z shoppers emerge as more concerned about sustainability and equality than millennials: 22% of Gen Z shoppers want more information about sustainability and ethics (compared with 14% of millennials), and a third want more diversity in the models used (compared with a fifth of millennials). We explore this topic further in chapter five.

Gen Z’s preference for speed – and perhaps their desire for instant gratification – is evident, as nearly half (48%) say that having to wait for a delivery is the most annoying aspect of online shopping.

Both Gen Z and millennial groups dislike returns trips and paying for returns.

Could this age-old dislike of returns be contributing to falling return rates at some retailers? In its pre-close full-year statement last month, Asos reported that return rates had fallen in the preceding period.

Part of this could be explained by lockdown purchases – shoppers shifted from summer holiday- and event-driven purchasing to buying lockdown-friendly active- and loungewear – focusing on freer-fitting items that are less likely to be returned.

But Asos said this was not the whole story, and it had noted a “prolonged shift in customer behaviour towards more deliberate purchasing across all product categories, even when sales momentum has improved”.

Retailers that assist shoppers with this “more deliberate purchasing”, particularly through optimising choice of the correct size and fit, could benefit from a reduction in returns, while also improving customer satisfaction.

A difference between the two age groups emerges again in Gen Z’s frustration around fit unpredictability, as well as poor images and lack of video: they rate all of these aspects as more annoying than millennials rate them.

Diversity again also emerges as an issue – something which has rocketed up the agenda for many people this year in the wake of the global Black Lives Matter movement: a quarter of Gen Z shoppers find a lack of diversity in models online annoying. We take a closer look at this in chapter five.

Perhaps surprisingly, reported use of apps has fallen since last year. In 2019 70% of Gen Z and millennials, said they shop using apps. This fell to 65% in 2020.

However, there is a significant gap between older and younger shoppers: 57% of millennials said they shop for fashion using brand or retailer apps, compared with 73% of Gen Z shoppers.

While Gen Z and millennial shoppers report continued use – and appreciation – of physical fashion stores, there are a few concerning signs.

A significant proportion – 43% – of both Gen Z and millennials say they are “quite likely” to give up physical store shopping if all the issues with online fashion can be erased, and a further 27% say they “definitely” would.

What might be more encouraging for bricks-and-mortar retailers and brands, however, is that across the board, Gen Z are more likely to prefer store shopping than millennials: that younger shoppers can see the appeal of stores is heartening. They are more likely to enjoy going shopping with friends and family: 44% say they enjoy this compared with 36% of millennials.

They also like the atmosphere of physical stores, and the ability to browse.

For both Gen Z and millennial groups, however, the biggest draw to stores remains the ability to try on clothes.

While Gen Z’s enjoyment of physical fashion stores was visible in the previous question, this one shows millennials’ slight predilection away from them.

Millennials are more likely to find crowds annoying (although Gen Z shoppers appear to dislike queueing more) and find inconveniences such as a lack of toilets an irritating deterrent.

For Gen Z’s part, apart from queuing, they are most annoyed when they cannot find their size in an item they want while shopping for fashion in store.

Chapter 5

PURPOSE-DRIVEN SHOPPING

It is hardly news that the environment, sustainability and social justice are important to Gen Z (aged 26-40). As we wrote in last year’s report, this group came of age, or is coming of age, during a global climate crisis that many see as crunch time. This year’s results show that the environment remains high on the agenda for most of our respondents.

At the same time, the last 12 months have brought an extraordinary swell of support for the US-born Black Lives Matter movement, and the global protests that occurred in the summer of 2020 look likely to become a tipping point for attitudes on racism, diversity and equality.

Young people have played an integral role in both movements, and the differences in attitudes are evident between Gen Z and millennials (aged 26-40). The older members of the millennial group reached adulthood during a very different time: they grew up in a decade that began with Twin Towers attack in New York in 2001, and was characterised by terrorism and western governments’ responses to it. As a result, while equality and the environment do matter to them, a slightly different world view is evident.

A large majority (79%) of Gen Z and millennials see sustainability as important – this has edged up from 77% in 2019.

A quarter of both Gen Z and millennial shoppers say sustainability in brands and retailers is “very important” to them.

However, a slightly larger proportion of millennial shoppers than Gen Z say it does not matter: for 24% it is “not very” or “not at all” important, compared with 19% of Gen Z.

A slightly bigger gap emerges in terms of equality, across race, gender, sexuality or disability lines. While it is still seen as important – overall, 78% of all Gen Z and millennial respondents say it matters to them – millennials care marginally less. More than a third (36%) of Gen Z say it is “very” important, compared with 27% of millennials. In addition, 26% of millennials say it does not matter to them, compared with only 18% of Gen Z.

It would appear that a retailers are losing out on sales because of their perceived ethical or environmental failings: 55% of Gen Z shoppers and 39% of millennials say they have abandoned a purchase because it did not reflect their values.

With more and more competitors – from new sustainable brands to second-hand options – coming on to the market and making it easier for consumers to shop in a way that is led by their beliefs, this is an area in which brands and retailers should be investing to avoid losing further relevance.

This is the paradox for many brands and retailers that are trying to make the business case for operating in a more sustainable or diverse way – consumers often do not put their money where their mouth is.

However, when the product is right, 70% of Gen Z and millennials say they would pay more (either “always” or “sometimes”) for clothes, accessories and shoes from businesses that are sustainable or vocal about furthering equality and diversity. This rises to 76% in Gen Z shoppers, but falls to 65% in millennials.

While saying they will do something is not the same as actually doing it, this does suggest that, as their income rises with age, Gen Z and millennial shoppers will be willing to pay more for fashion from businesses that are sustainable or vocal about furthering equality and diversity.

Many brands and retailers have spent the last three years racing to respond to these changes, and the pandemic, thankfully, has not upturned everyone’s sustainability drives. Selfridges, for instance, launched its Project Earth initiative in August, which aims to help customers shop more sustainably in three ways: addressing materials used, introducing repair and resale, and working to shift people’s mindsets both inside and outside the business. Tommy Hilfiger also joined the conversation in September, launching ambitious new sustainability targets.

Some retailers are hopeful that, far from pushing sustainability to the back of people’s minds, the pandemic will actually help further the cause by forcing fashion to pause and take stock.

Chapter 6

SOCIAL INSPIRATION

 Social networks have become integral to the way the under-40s browse and buy fashion, but there are a few differences in the way the two groups – Gen Z (aged 18-25) and millennials (aged 26-40) – approach it.

Overall, Instagram is the most popular network for fashion inspiration by some margin: 52% of Gen Z and millennial respondents say they use it to browse for fashion. However, this grows to 64% for Gen Z, and falls to 40% for millennials.

Gen Z are also more likely to use TikTok (29% vs 11%), Snapchat (also 29% vs 11%), YouTube (40% vs 26%), Pinterest (23% vs 15%) and Tumblr (7% vs 3%) for inspiration.

The only network millennials are more likely to use than Gen Z is Facebook (42% vs 28%).

In addition, a third of millennials (33.5%) said they do not use social media at all for inspiration, compared with just 15% of Gen Z.

Greater use of social media in general leads to more purchasing via the channel. Gen Z are more likely to have purchased via social media: 58% say they have done so, compared with 45% of millennials.

The predilection towards life online is evident again in this data. Gen Z are more likely to respond positively to influencer content: 27% get inspiration from influencers compared with just 16% of millennials.

Millennials (aged 26-40) are more likely to seek inspiration from brands and retailers directly: 38% of them do this, compared with 24% of Gen Z consumers. This is potentially useful for brands: while it is difficult to generalise completely across age groups, those in their thirties are more likely to respond to in-house-generated content, while younger people are more responsive to influencers.

Chapter 7

FALL IN OWNERSHIP

New fashion business models are helping to shake up the industry, providing consumers with more environmentally friendly methods for updating their wardrobes.

As with the rise of Uber and Airbnb as part of the sharing economy, Gen Z (aged 18-25) and millennial (aged 26-40) consumers are also more comfortable than previous generations with a more temporary sense of ownership when it comes to fashion – either not owning the items they wear via rental platforms or passing them on via resale sites once they are finished with them.

Given that younger consumers do tend to wear more, buy more and have more quickly-evolving tastes, these options offer radical ways to help improve the sustainability of fashion and build a more circular economy into the industry.

Second-hand fashion options – including charity shops, vintage boutiques, Ebay and resale platforms such as Depop and Vestiaire Collective – are growing all the time.

Two-thirds (66%) of all Gen Z and millennial respondents said they have purchased second-hand-fashion, and both groups are almost equally happy to do so (67% of Gen Z and 65% of millennials).

These shoppers are not just buying second-hand items – they are joining the circular economy by reselling fashion, too: 58% of Gen Z and millennials say they had resold something. This is likely to grow as the reselling of fashion continues to become more of an entrenched part of buying fashion.

Renting fashion is a newer idea and there are fewer – albeit growing numbers of – options for consumers to do this, among them Girl Meets Dress, Hire Street, Hurr Collective, By Rotation and My Wardrobe HQ in the UK.

Over a third (34.5%) of Gen Z and millennial respondents said they would consider renting items – up from 30% last year.

A further fifth are undecided, with 20% saying they are “not sure” if they would rent clothes.

In addition to new businesses entering this space, established brands and retailers are also starting to embrace rental. In July 2020, Danish womenswear brand Ganni teamed up with denim giant Levi’s on Love Letter, a rental only collection. The collection consists of three styles made from upcycled Levi’s and repurposed denim. Each item carries an NFC (near-field communication) enabled sensor in the size label that consumers can tap to discover the history of the piece via their mobile phone, including who wore it before them.

As more businesses enter this space, and, as consumers warm to the idea and discover new options, fashion rental will continue to be an area to watch.

Chapter 8

PARTNER COMMENTS

New values, beliefs and desires impact shopping habits

Without doubt, Gen Z and millennials possess an entirely new set of values, beliefs and desires compared with preceding generations. This is particularly important to keep front of mind in retail, where businesses need to truly understand their customers, adapt and cater to new – and ever-evolving – shopping habits.

For example, younger generations have typically shunned the high-interest rates of credit cards. They view debt in a different way to say, the baby boomers, and want more flexible, smarter payment options that work better for them.

These consumers – perhaps more than any other generation – also prioritise values. Efficiency, quality of service and customer experience are always important, but they are not the only factors that younger generations want to see from brands they interact with. They are far more likely to choose – and remain loyal to – brands that match their world view.

If the last 12 months are anything to go by, they will become less likely to choose services and products if any perceived benefits come at the expense of society or the planet. From warehouse to wardrobe, those brands that strive to offer a sustainable shopping experience will enjoy more success among the younger generation than their counterparts who fail to do so.

Gary Rohloff, co-founder and MD, Laybuy

The future of retail is whatever Millennials and Gen Z-ers want it to be – can you deliver it to them?

As digital natives with a fervent adherence to identity and freedom of expression, the millennial and Gen Z generations have helped propel fashion to the forefront of retail innovation. And they expect seamless and personalised shopping experiences that follow suit – no matter the industry.

As highly connected and sophisticated shoppers, they have unfairly earned the reputation of being fickle consumers. But in actuality, they are just too often underserved by retailers and brands that have not done enough to cater to their ever-changing interests and palettes.

At Kibo Commerce, we arm our clients with the type of market-leading, end-to-end personalisation that sits at every customer touchpoint, ensuring that millennials and Gen Z-ers are met with the individualised experiences they have come to expect.

In turn, these personalised shopping experiences can earn brands the type of loyalty they have found fleeting from these two generations.

What is more, Kibo research has discovered that companies with a personalisation strategy that accounts for every customer touchpoint across marketing and ecommerce are significantly more likely to drive upwards of four times return on investment (ROI) compared to their competitors, who might only be pursuing a one-sided personalisation approach.

That is to say, that modern commerce does not just start and end on digital platforms. By enabling integrated and personalised experiences across data-driven commerce, personalisation, and modern order fulfilment – something Kibo can help with – they can deliver the future of retail today. And by doing so, millennials and Gen Z-ers will reward them in kind.

Meyar Sheik, president and chief commerce officer, Kibo Commerce 

Gen Z and Millennials 2020

Produced By Drapers Bespoke

Report editor Graeme Moran
Illustration by Bonnie Brown

Published in association with Laybuy and Kibo Commerce