As the Luxury Industry is bouncing back and recovering from the pandemic, the whole dynamics of this industry are changing. Many studies support that there’s a growth in high-net-worth individuals (HNWIs) across the world, especially in the Asian market. Thirty percent of affluent in Asia have a net worth of at least $1 million. To support this, Ms. Amrita Banta (Managing director at Agility Research and Strategy) during the Webinar “A peep into post-covid luxury”, described this group of younger luxury buyers as the “triple-A consumer: ambitious, affluent, and aspirational”. A study conducted by Agility research also showed a very optimistic outlook about the rebound and spending by Gen Z and their love towards traveling.
One thing is for sure, gen Z is entering adulthood during a global pandemic, which in turn is impacting their shopping and social behaviours. Generation Z likes to research before they shop. They analyse not only what they buy but also the very process of buying and consuming. For them, consumption means having access to products or services, but not necessarily owning them. As access becomes the new form of consumption, that is, unlimited access to goods and services (such as car-riding services, video streaming, and subscriptions) creates value. Products become services, and services connect consumers. The core of Gen Z is the idea of manifesting individual identity.
Consumption, therefore, becomes a means of self-expression—as opposed, for example, to buying or wearing brands to fit in with the norms of any group. Gen Z consumers across the globe are not only eager for more personalized products but also willing to pay a premium for products that highlight their individuality.
It is a perfect time for brands such as Cartier, Tiffany, and Co., etc to take a hold of the Indian luxury market by influencing these young affluent consumers. They are also the one who gets exposed to international brands first and then introduce them to their parents”. Although most Generation Z buying activity occurs online, the majority of these individuals still want to visit a store before making a purchase. Therefore, the Generation Z demographic will influence and change how luxury retail needs to shift in the coming years. In a way, they care less about brand loyalty, are more influenced by social media, are open to new concepts, and buy impulsively.
They want a quick and convenient shopping experience. If delivery times are too long or the content doesn’t interest them, these consumers will move on and look elsewhere. Not to miss, Brands that fail to attract Gen Z will not be here by 2030. In China, the world’s most important luxury market by far, Gen Zers already make up more than 25 percent of some brands’ customers. While the number in Europe and North America is significantly lower due to an older population on average, by 2030 even in these “mature” regions, Gen Z will be the largest customer group for luxury.
The best time to act for luxury brands is now. Lowering the prices or cheap promotions will only destroy the brands. It’s high time for brands to understand that – They desire experiences that other brands can’t provide. As long as brands continue to excite them, Gen Z will remain loyal. To support this Mr. Daniel Langer (CEO at Equite) quoted “Brands like Hermès, Chanel, Gucci, Louis Vuitton, and Dior are fully focused on Generation Z and they are doing well because they have a story which aligns with their customers. Having a history is not enough today, content differentiation is the key”. In our opinion, by 2030 Gen Z will lead a path for breakthrough moments in the luxury industry. Gen Z is the key to brands’ success in the present as well as the future. Those brands that pretend to be luxury without truly providing exceptional value are likely to fail. For brands that apply a wait-and-see approach and focus less on inspiring and exciting young audiences, their days are numbered in the industry.
About The Author: PGDLM Student Batch-10
About The Author: PGDLM Student Batch-11