A(R) to (Gen) Z: Everything There Is to Know About the Everchanging World of Retail
After years of trying to grasp the attention of the avocado-on-toast-loving Millennials, the industry has found a new category to focus on Gen Z, those born between 1997 and 2006. This elusive group of people performs Tik Tok dances in front of the phone, lives off aesthetics, and is more tech-savvy than ever. And just like every other young generation, it completely rules the charts, the sales, and the market.
The fashion industry has tried to lure in Gen Z for a while, but with sustainability becoming increasingly important for the average consumer, second-hand shopping taking the centre stage, and a pandemic that’s forced today’s teenagers to make sweatpants cool, it’s not as easy as it might seem.
The fashion industry wants to capture Gen Z’s attention focusing on digitalization. AI and AR are buzzwords that have been thrown around a lot recently, but they are often misused and their impact beyond the novelty is still unclear.
What is AR?
Augmented Reality is an interactive experience in a real-world environment. Think of Instagram filters, Pokemon Go, and so on. In the fashion industry, it is used to make online shopping more realistic and interactive. It allows consumers to test new shoes from the comfort of their homes, or sample different eyebrow shapes like they are trying on clothes.
The AR appeal is evident especially during the pandemic, as consumers can’t leave their house but might still want to try some items before purchasing them. It can also be considered a better and greener alternative to the return epidemic. Only 6% of Gen Z reports having bought something after trying it on AR, a number that might seem small but on the rise.
The issue is that studies have shown that possessing something in the virtual world triggers the same serotonin release as actually owning the item. This could lead to impulsive buyers being content with the option to try on designer shoes on Snapchat whenever they want, and potentially lower sales. On the other hand, studies have also found that touching objects creates a sense of attachment that often ends in the purchase, as one feels like they can’t step away from the item. It is still unclear if the chance of trying things in AR would lead to the same feeling.
Finally, Gen Z influencers have not hesitated to jump on the AR trend. Some resorted to posting pictures in digital clothing (clothes that only exist in the digital space) or on Instagram. This started as a response to the influencer habit of buying outfits solely to post them, something that the Norwegian company Carlings saw as an opportunity to provide a cheaper and more sustainable alternative.
What is AI?
AI, or Artificial Intelligence, is a broad term that refers to computers and machines being able to imitate human brain processes, such as learning. Even if it sounds a little dystopian, AI is something we encounter in our daily lives. For example, pop-ups informing us that the item we were looking at is on sale or showing recommendations tailored to our search history and taste. It might be something we expect from a brand nowadays, but it is remarkably effective. Vue.ai co-founder and CEO Ashwini Asokan shares that just by implementing personalizing AI, their clients have seen an increase in revenue of 50%.
Gen Z does not feel the same sense of ownership over their privacy as the previous generations did. In fact, for these AI natives, personalization is not only expected but encouraged. The viral app TikTok is a perfect example: with an algorithm that has been compared to Crack for its addictive properties by Forbes, Gen Z can’t seem to get enough.
Gen Z Still Loves Instagram
Even though TikTok is on the rise, Instagram is still a Gen Z favorite. Feeling more formal and curated than TikTok, it is used for inspiration and self-branding. 17% of Gen Z report having bought something directly from Instagram. With 80% sharing that influencers affect their buying decisions, Gen Z keeps validating an industry that many deemed a shooting star. “Gen Z currency is attention,” shares Ashwini Asoka, and no one creates a more compelling story around products than influencers, who live their life to fit particular brands.
Even more interestingly, 93% of Gen Z states the influence of Instagram ads in their purchase behavior. That is an impressive number that indicates what the best return on investment is in the digital world. Using Instagram’s algorithm, brands can show Gen Z precisely what they were looking for, link directly to the website, and convert at high rates.
So, How Do We Get Gen Z?
Even though many have speculated on the elusive characteristics of Gen Z, the only way they seem to differ from Millennials is their openness to digitalization and personalization. Embracing AI and AR allows the fashion industry to offer a customized experience to the user and suggest what they want when they want it.
Creating a compelling narrative is another way to get the youth’s attention, as always eager to fit determined groups, whether that is the Year 2000 aesthetic or a young activist persona. At the end of the day, as per every other consumer group that has come up in recent years, the most effective way to cater to them is one and only one: ask them, and listen to the answer.