Gen Z Consumer Behaviour
Sep 02, 2022
Reading the sentiment of young generations today might be the best investment for your brand tomorrow
HOW TO HANDLE GEN Z GROWING FASHION SUSTAINABILITY DEMAND?
When we say that sustainability is the new standard for the fashion industry, why do we say that? Because it is the right thing to do, of course.Because it is the most ethical choice to make in order to reduce the impact of our jobs, definitely. But business is business, and there is a reason sustainable collections have found more and more space over time.
The concept of environment-friendly fashion became popular in the ‘90s, starting to pay more attention to the impact of their production, from the subsidiary lines to the choice of fibres. In the following decades, consumers' attention has been growing, demanding quality and sustainable development-oriented options from brands.
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This season used lots of recycled PET yarn made from plastic particles, as well as recycled down feather and eco-washed denim to reduce excessive water consumption.
A new generation of designers grew together with this wave of awareness, helping to integrate the values of sustainable development into mainstream fashion. But if more and more companies have at least a permanent collection designed with sustainability in mind, the true reason is: the market is always king.
Of course, sensitivity to sustainable issues is not homogeneous across the globe, but reading the sentiment of young generations today might be the best investment for your brand tomorrow, as they are going to be a more prominent consumer demographic. People between 18 and 40 years old are not that loyal to brands, and could easily switch if a less known one meets their expectations.
Used to define the youngsters born from the mid-90s to the late 2000s, Generation Z is associated with many specific behaviours that drive not only marketing and communication choices, but also substantial business development directions. They are digital natives massively using their smartphones, but they are also worried and creative about the future. They don’t seek ownership as much as previous generations did, and instead, they value collaborative consumption.
These elements combined mean that they are stormed with information, and they are likely to change their consumer behaviours as a result of that information. Such changes have been reported mostly in non-food products, such as cosmetics and clothing.
Surveys up to the pre-pandemic era highlighted that 9 out of 10 Gen Z consumers attach the responsibility to address environmental and social issues to fashion companies, which made them more likely to choose transparent and committed brands.
“The vast majority say they would be more loyal to companies that are aligned with those values”.
This sentiment is not changed, but during the pandemic younger generations were hit the hardest, and they showed to be likely to look at a cheaper price, first, when it comes to deciding to buy.
Does This Make the Argument Invalid?
No!
While their opinion is clear, their behaviour looks like going in the opposite direction. Different surveys suggest that youngsters buying most of their clothes from fast-fashion brands stay in a number between 50 and 65%. This might sound ambiguous but it has to be read considering the lack of spending power compared to older generations. A figure above 73% of them is willing to pay more for sustainable products, and we assessed that they are not loyal to brands.
They are already buying from sustainable or eco-friendly ranges within fast-fashion brands because they believe that these products are more ethical and they are likely to switch their behaviour as soon as their consumption power grows. And they already represent more than 40% of global consumers.
Gen Z cares about ethics and will reward brands that take a stand, but there is a need for consistency.The best way for you to make your products appealing is not just to invest in a social media-friendly strategy, in your video storytelling or in influencers (which would hit the spot, but it is going to be exposed as greenwashing if there is not a real effort behind).The best investment you can do is to invest in a proper consultancy to find out where and what you can improve in your company structure, and what stays within your reach. Brands have to work harder to hold onto Gen Zs as customers.
What Are The Achievable Sustainability Targets You Can Start From?
That, of course, depends on the nature of your activity. Once you have set your targets, embed them in a long-term strategy. If you are a design brand, for example, launching one sustainable collection will pay out less than building your reputation in the long run. Improve your efficiency, hire an expert in the field or invest in training to make your employees a committed team. With such a holistic approach, results will follow.
Generation or Geography?
Since our analysis is mostly based on surveys, doubting its validity across the globe sounds quite fair. Gen Zers in the Asia-Pacific region reveal slightly different attitudes compared with the ones growing up in Western countries. Still, on the other hand, they look way more alike than even Millenials did.
Across APAC, almost a third of Gen Zers spend six hours or longer a day on their phones, they like to research before they shop, especially to find deals, but they are not willing to sacrifice quality for price. This unfortunately does not apply to their environmental consciousness: APAC Gen Zers care about sustainable consumption but are less willing to pay for environmentally sustainable brands.
According to McKinsey’s survey, for instance, in China, 60% state that they are trying to minimize the negative effects their eating habits have on the environment. In Japan, 54 % of Gen Zers say they always look for clothes produced sustainably, and 46% prefer to wear used clothing. But only in Australia Gen Zers are noticeably more likely than their elders to say that they are willing to pay more for environmentally responsible products (39%).
Investment vs Cost
Unevenly, yet inevitably, the demand for transparency and sustainability coming from Gen Zers might be the market pushing all stakeholders in the industry to prioritise the issues of environmental and ethical sustainability.
Better materials, lower impact manufacturing, better conditions and salary for workers: all that comes with a cost. Even lower-cost retailers tend to position conscious products at a premium pricing, which consumers might be less willing to pay for in a struggling economy.
After these times of crisis, is also likely for circular business models to become more and more relevant and be embedded by big brands: not even luxury brands, in fact, can miss out on alternative retailing like resale and second-hand, a market expected to be worth $53.2 billion by 2023. This is only one of the ways to provide sustainable products at a price point achievable for mass reach.
Investing in communication is part of the process. Improving the ability that companies have to let consumers know where their clothes are made, in what conditions and using what materials: all of that is crucial. Making such knowledge easily accessible not only from the purchasing point, but also from a quick look on search engines, is what can makes a difference in Gen Zers minds.
Companies provide very limited information about how they are spending to achieve sustainability goals, which rarely include systemic solutions (i.e. financing suppliers) and ethical goals (i.e. living wages for manufacturers). On top of that, big groups such as Kering and H&M announce that they will increase revenues while halving emissions, which means they are looking for a way to extract more value from fewer products: hard to tell as long as environmental accounting is imprecise and not consistent across companies. But good signs are there and the spending is getting more and more serious by the hour.
The real challenge needs to be keeping the prices affordable. The prices of sustainable fabrics are, on average, two and a half to four times more expensive in comparison to more commonly used fabrics. We can see that most Fast Fashion companies still have a very short amount of sustainable choices in their offer. But the price positioning is variable.
As you can see from the graphs below, not all brands got the same response. In the first quarter of 2021, Mango increased the amount of sustainable items in its total offering to 9% from the 1% of the first quarter of 2020 and H&M increased its from 10% to 23%, while in the same period it significantly fell at Zara, from 30% to 6%, and at C&A, from 23% to 3%.
What’s more interesting, the average price is not directly proportional to the offering: eco friendly items are priced at €28.10 at H&M (average price €26.10) and €28.60 at Zara (average price €36.10).
The distinction would require a more in-depth case-by-case analysis, but the data show clearly that sustainability investment costs do not need to be absorbed by customers charging for the final product. Consumers will eventually need to learn the value of things: buy less, buy better. But right now such products can be immediately more appealing to Gen Z as there is no need to wait for their spending allowances to grow.
The brighter future is a conscious future and as with the words of Greta Thumberg: our house is on fire and the new generation has eyes wide open. Let’s not disappoint them.
“Let’s make a difference. Together.”
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