Gen Z and millennials

Claire’s unveiled a new influencer platform focused on Gen Z and Gen Alpha, or “Gen Zalpha,” brand ambassadors from diverse backgrounds, according to a press release.  

Dubbed The Collab, the group will guide creative strategy across content, communications and activations, including in-store experiences, with a launch timed to the release of the teen-friendly retailer’s spring collection. Claire’s will add new members throughout the year to share their perspectives and create an ongoing social dialog.  

In the announcement, Claire’s described Gen Zalpha as “the most diverse, savvy and empathetic generation yet,” emphasizing a focus on inclusivity and purpose. Claire’s has continued to evolve its marketing to stay on-trend with young consumer tastes. 

Claire’s continues to lean into messaging targeted at Gen Zalpha, a demographic covering the younger end of Gen Z and the emerging Gen Alpha cohort that hasn’t yet matured into independent purchasing power. Ambassadors featured in The Collab range from 7 to 17 years old and come from backgrounds spanning the worlds of music, sports, fashion and more. 

The mall-based retailer is promoting The Collab program, which will run throughout 2024, as richer than a traditional brand platform. Members will dictate Claire’s creative decision-making both in front of and behind the camera, along with participating in in-store experiences and events. The concept was inspired by the brand’s “Be the Most” anthem advertising. 

“Everything we do at Claire’s is in service to our consumers," said Kristin Patrick, CMO of Claire’s, in a press statement. “In an effort to turn the brand over to them and let their many talents shine, we created The Collab to serve as a platform for them to share their hopes, dreams, passions and accomplishments with our global audience. Claire’s empowers every generation to be the most expressions of themselves, and The Collab is a way to recognise them for all that they are and want to be.”

Initial members of The Collab are: Ayla Palmer and Ashlyn So, both fashion designers; Caro Hecks, a musician, ballerina and surfer; Maggie Sophie Brown, a documentary producer and co-founder of the Pad Project; Ariana Feygin, a chef being mentored by a Michelin star winner; Kaylee Foxhoven, a soccer player; and Junior Gutierrez, a skateboarder who has previously worked with Claire’s. 

Each ambassador will contribute their talents to Claire’s marketing efforts. A dress worn by So in a photoshoot is of her own design, for example, while Brown contributed to photography and filming for the campaign. A collaborative approach to influencer partners has been employed by other teen-targeted retailers like American Eagle. 

Ramping up influencer marketing to appeal to Gen Z and Gen Alpha aligns with Claire’s bigger bets on digital marketing tactics that are shown to resonate with those demographics. The retailer known for itws piercing services and accessories has recently been active in the metaverse through platforms like Roblox and has ported over ideas originally designed for virtual realms into the real world.

Claire’s last summer postponed a planned initial public offering amid a rocky macroeconomic environment, noting that it would resume its IPO preparations “when market conditions are more favorable.” Later in the year, the brand appointed Bath & Body Works veteran Chris Cramer as CFO and chief operating officer. 

Compared to consumers overall, NYX Professional Makeup, Clinique, Dollar General, Crocs and Victoria’s Secret are among the fastest growing brands for Gen Z shoppers, according to a Morning Consult report shared with Retail Dive. As for all consumers, Shein, Amazon Pharmacy, e.l.f. and Clinique are the top brands and retailers on the same list, according to the report.

Shein is ranked the second fastest growing brand for millennials. The proportion of parents interested in buying clothing from Shein has risen from 34% in July to 41% in October, according to the report. 

Nearly half (46%) of Gen Z shoppers have considered buying items from Dollar General. That share grew to 56% for Gen Z TikTok users and 60% of daily TikTok users, per the report.

Morning Consult’s report suggests that Gen Z’s interest in Dollar General stems in part from inflation concerns and social media use. TikTok has become the go-to platform for viewing shopping hauls and finding cheaper alternative products at retailers, including dollar stores. 

“Videos featuring products from discount retailers are racking up millions of views, like one of a beauty influencer finding an Ulta Beauty eyeshadow palette for a fraction of the price or even an entire account devoted to budget grocery shopping,” the report noted. 

Other research has tried to pinpoint which brands are popular among Gen Z shoppers. According to a Piper Sandler report released in April, Ulta, Sephora and Target were the top beauty retailers for Gen Z consumers. The survey also found that Nike was the leading clothing brand, followed by American Eagle and Lululemon. Legacy beauty brands like L’Oreal and Estée Lauder have been trying to keep up with emerging competitors like e.l.f. as they gain ground with Gen Z consumers. 

Gen Z consumers have been turning to other social media platforms to make purchasing decisions, research indicates. A report from the International Council of Shopping Centers released in June found that 45% of Gen Z consumers cited TikTok and Instagram as go-to social platforms for making purchasing decisions, coming ahead of YouTube, Facebook, Snapchat, Twitter and Reddit.

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Following forecasts of higher holiday retail sales, nearly three-fourths (74%) of shoppers expect their holiday gift budget to remain the same or increase compared to last year, according to a Shopify and Gallup survey of 1,761 U.S. consumers conducted last month. Thirty-seven percent of Gen Z shoppers expect to spend more on their holiday purchases than last year, the survey also found.

Less than half (41%) of shoppers plan to start their holiday shopping in October, followed by 39% who are doing so in November and 20% in December. Though nearly all (93%) of shoppers plan to buy at least some of their gifts online, almost half of shoppers (47%) anticipate purchasing all or most of their gifts online. 

Shopify found that nearly half (48%) of Gen Z consumers plan to buy at least some gifts through social media, a greater share than the third of all U.S. consumers that plan to do so. Forty-eight percent of Gen Z survey respondents also said they would buy their holiday gifts early if retailers began introducing their holiday deals and promotions sooner.

Shopify’s research builds upon other reports detailing Gen Z shopping habits this holiday season. Though Gen Z consumers are expected to buy some of their gifts on social media, the cohort also might return to malls this holiday season. A JLL survey released in September found that 49.6% of Gen Z shoppers expect to do their holiday shopping at malls, more than the 40.8% average. 

Shopify’s survey echoes other reports indicating that consumers plan to spend more over the holidays this year. A September report from Deloitte predicted that retail sales would rise between 3.5% and 4.6% year over year, driving holiday sales to between $1.54 trillion and $1.56 trillion between November 2023 and January 2024.

Despite planned increases in holiday budgets and retail sales, consumers are relying more on their credit cards, which could weigh down their budgets this holiday season. In the second quarter, U.S. consumer credit card balances rose 4.6% from the previous quarter to $1.03 trillion, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data. A LendingClub survey released in August found that 29% of Gen Z consumers are living paycheck to paycheck, which they attribute to nonessential spending.

Holiday shopping dominated social media over the Thanksgiving holiday weekend, with over 2.3 million posts from Friday through Sunday mentioning holiday shopping, Black Friday or Cyber Monday.

Half of postings during that time expressed a positive sentiment about the Black Friday and holiday shopping period, a Sprout Social analysis of X, YouTube, Reddit and Tumblr found. Eighteen percent of social media users expressed negative sentiments, while nearly a third (32%) were neutral.

Among the top items Black Friday shoppers discussed on social media were televisions, PS5s, Airpods, iPhones and Xbox. 

Sprout Social’s report builds upon previous research indicating that consumers are turning to social media for holiday shopping inspiration.

According to a Shopify and Gallup survey released in October, 48% of Gen Z shoppers plan to buy some of their gifts via social media, a greater share than the third of all U.S. consumers that plan to do the same. Similarly, a JLL report released that same month found that 35.8% of shoppers planned to use Facebook for gift inspiration, followed by Instagram (32.7%), YouTube (24.1%), TikTok (23.4%) and Pinterest (16.2%). 

JLL also found a generational divide between shoppers’ ideal social media platforms for holiday gift inspiration. For shoppers aged 18 to 29, 46.5% said they are turning to Instagram, and 38.5% are relying on TikTok. Millennials and Gen Xers, on the other hand, cited Facebook and Instagram as their go-to platforms for gift ideas.

Besides using social media to discuss their holiday shopping opinions and search for gifts, consumers are also using their mobile devices to shop this year. An Adobe Analytics report predicts that 51.2% of online shopping will occur via mobile devices, marking the first time mobile shopping will overtake desktop buying. The report also noted that smartphones comprised $5.3 billion worth of online Black Friday transactions, a 10.4% increase from last year.

Tapestry’s international revenue grew almost 20% for the third quarter, led by a sales increase of approximately 20% in Greater China, and over 20% in Japan and other Asian markets.

CEO Joanne Crevoiserat said, “Looking forward, we are well-positioned to deliver sustainable, profitable growth against a volatile backdrop. We’re harnessing the strength of our iconic brands, enhanced by our direct-to-consumer, globally diversified, and data-driven platform.”

The New York-based company, which owns Coach, Kate Spade and Stuart Weitzman, has been repositioning Coach — its biggest brand in terms of stores and sales —  to target younger customers as Tapestry aims to hit $8 billion in revenue by 2025.

Tapestry has navigated the luxury slump better than many of its competitors. The company delivered record second quarter earnings earlier this year, and a continuing partnership between musician Lil Nas X and Coach has helped keep the brand eye-level for Gen Z and millennial customers. The company said it picked up over 1.2 million new customers in North America, approximately half of whom were Gen Z and millennials.

Young consumers, specifically Gen Z and millennials, are key drivers of the luxury market right now, according to a report earlier this year by Bain and Company, which reported that millennials and Gen Z accounted for all of the luxury market’s growth in 2022. 

“The spending of Gen Z and the even younger Generation Alpha is set to grow three times faster than other generations’ through 2030, making up a third of the market,” said Bain. “This reflects a more precocious attitude toward luxury, with Gen Z consumers starting to buy luxury items some three to five years earlier than millennials did (at 15 vs. at 18–20); Gen Alpha is expected to behave in a similar way.”

The younger consumer, who is also largely driving direct-to-consumer sales, may also account for Tapestry’s 10% DTC growth. They’re also driving the push toward new technology such as NFTs, which may help explain the presence of new Tapestry board member Alan Lau, who joined the company in April.

Lau is CBO for Hong Kong-based gaming software company and venture capital firm Animoca Brands, which develops NFT and blockchain products.

Brands betting on social media to reach Gen Z may be on the right track. Eighty-five percent of respondents in the generation said social media influences their purchasing choices, according to a report by the International Council of Shopping Centers released Wednesday. Eighty-five percent of men and 86% of women said social media sways their buying decisions. 

Forty-five percent of Gen Z respondents named TikTok and Instagram as the top platforms influencing their purchasing decisions, followed by YouTube (38%), Facebook (24%), Snapchat (17%), Twitter (14%) and Reddit (7%). 

In terms of which retailers Gen Z shops, almost half (48%) said they most frequently shop at discount or off-price stores, followed by dollar stores (25%), specialty retailers (24%), fast-fashion retailers (22%) and department stores (21%). Only 13% of survey respondents said they shop secondhand most frequently, and just 9% said the same of luxury retailers.

ICSC’s new report also offers insights into Gen Z’s financial habits and concerns. Forty-one percent of Gen Z respondents said they save more money than they spend, but 36% said they spend more than they save. Eighty-four percent of older Gen Z consumers, between 23 and 26 years old, are concerned about the U.S. economy, a greater share than the 71% of 16- to 17-year-olds who said the same. 

The report builds upon other research indicating that Gen Z shoppers are worried about their finances. In a spring 2023 Piper Sandler survey, teens’ self-reported spending rose 2% from the year prior. However, a September 2022 Bank of America report found that 73% of Gen Z consumers said the economic environment was making it challenging to set aside money. And more than half (56%) said inflation had put more stress on them financially. 

The report also sheds some light on what elements of the shopping experience matter most to Gen Z shoppers. Nearly half (46%) of Gen Z respondents said a seamless checkout process is critical to their shopping experience, followed by fast shipping (45%) and immediate in-store availability (39%). Under a third of respondents (31%) also said free returns, and quick and helpful customer service (27%) are crucial for their shopping experience. 

“Gen Z is an increasingly important demographic as more of them graduate from school, transition to their first full-time job, and mature into more spending power,” ICSC President and CEO Tom McGee said in a statement. “Our study found that many of the stereotypes and preconceived notions attached to this cohort are unfounded, however, their habits will influence retail strategy, marketplace makeup and broader economic trends for years to come.”

With Gen Z’s reliance on TikTok and Instagram, some legacy brands have leaned more toward social media marketing to court Gen Z shoppers instead of spreading their spend across more traditional channels. But while social media holds sway over the demographic’s choices, ICSC’s report also found that more than half (56%) of respondents say family and friends have the most significant influence over their buying decisions, followed by product reviews (54%) and third-party review websites and forums (47%).

Gen Z loves individuality.

In fact, the one thing they might agree on is that they are all different and have niche interests that set them apart from each other, according to a report from Horizon Media in October.

Additionally, 60% of Gen Z agree that the brands they shop with are an expression of who they are and 77% don’t want to feel like they’re put in a box, according to 2020 survey data from Wunderman Thompson Intelligence shared with Retail Dive.

That sets up a conundrum for retailers hoping to reach them where they are, since “where they are” might be completely different depending on which Zoomer you speak with. The age group — defined by Pew Research Center as those born between 1997 and 2012 — has the industry in a chokehold, upending what traditional brands know about marketing and merchandising.

Retailers certainly care about what this generation wants. As this group gets older, their buying power gets bigger within the industry and so does their influence on how well brands perform.

Teens’ self-reported spending increased slightly by 3% year over year to $2,331 according to research firm Piper Sandler’s fall 2022 Taking Stock With Teens Survey of 14,500 U.S. teens. Female teens led that spending increase too, with that group's overall spend up 10% year over year and clothing being 30% of their wallet share — the highest it's been since 2012. 

Despite that, Gen Z is not immune to the throes of macroeconomic pressure. Inflation seems to be putting a dent in the group’s ability to save, according to Bank of America data from September that surveyed those ages 18 to 25. It found that 73% of Gen Z say it's hard to save money right now, and 56% say inflation has created more financial stress in their lives.

With Gen Z's spending power increasing and budgets potentially tightening, retailers might be wondering how they can earn the demographic’s loyalty. Taking a look at the brands Gen Z currently favors might shine a light on what actually motivates their purchase decisions.

‘A fantastic gardening shoe’

Despite loyalty looking different for this generation, many of their favorite brands are familiar faces (with a few exceptions).

Amazon, Walmart, Target, Dollar Tree and Nike were all ranked among the top 15 favorite brands by Gen Z, according to a survey conducted by research firm Morning Consult of about 2,031 Gen Z adults born between 1997 and 2004.

When compared to the favorite brands of millennials, though, several companies were much more favorable among Gen Z. These included Crocs, Fenty Beauty by Rihanna, Shein and E.l.f cosmetics.

Shein was a high-ranking apparel brand for Gen Z women according to Morning Consult’s data, and a similar pattern of results was found from Piper Sandler.

Nike, Lululemon and Shein were among the top brands to shop for clothing, according to Piper Sandler’s survey. Ulta, Sephora, Target, Walmart and Amazon were top retailers for beauty products, and 52% of all respondents said Amazon was their number one shopping website.

A brand winning with Gen Z in both studies is footwear company Crocs. Additional data from the Morning Consult Brand Intelligence platform, which tracks consumer attitudes, found that purchase intent for Crocs has been building up for years. In 2019, Morning Consult found that overall purchase intent was at 18% and by 2022 it reached 40%. 

Morning Consult attributes some of this growing interest to strategic and unique brand partnerships with Post Malone and Bad Bunny, as well as 7-Eleven and Hidden Valley Ranch.

“Crocs serve the purpose of a fantastic gardening shoe. They also serve as an extraordinary element of self-expression,” said Morning Consult Retail and E-commerce Analyst Claire Tassin. And through the use of Jibbitz (charms used to decorate Crocs), Tassin said they become “very visible. So wearing Crocs in and of itself out and about is sort of making a statement.”

That element of self-expression is a core part of the brand based on Crocs’ purpose webpage, which emphasizes creating a “welcoming environment for everyone.”

Diverse and inclusive self-expression is a value that somewhat sets this generation apart from others, according to Wunderman Thompson Intelligence Editor Emily Safian-Demers.

“I think this is a pretty universally acknowledged truth by now that among Gen Zers, they're really rewriting a lot of the traditional identity narratives,” said Safian-Demers. “Identity for them is much more nuanced and multifaceted than it has been historically for older generations.” 

The focus on individual decoration and strategic celebrity marketing seems to be working for the footwear company as well. Crocs has been doing well by the numbers, with its namesake brand’s third-quarter earnings showing revenue jumped 14.3% year over year to $715.7 million.

Gen Z’s healthy skepticism

Even though Gen Z might still favor some traditional retailers, that doesn’t mean their affection is easy to earn. 

The generation is harder to please overall, according to Morning Consult. Their average favorability rating for brands across the country is 27%, compared to 33% for all adults and a rating of 36% for millennials. 

“We can just see that Gen Z gives brands lower favorability ratings,” said Tassin. “One of the hallmark characteristics that I see with Gen Z is some really healthy skepticism that I think is born from being our first truly digital native generation, where you can verify all the information that brands are putting in front of you.”

Ultimately, this generation has access to more information and brands to choose from than perhaps ever before. Tassin says this is one reason brands just need to work harder to gain that favorability.

Beyond just having more access to various brands, Safian-Demers agrees that Gen Z is adept at finding more information about a company — and they are quick to share such information with friends. 

“It's maybe not just that they have more options available to them, but that they also have access to all of this information that people definitely wouldn't have had access to pre-social media and pre-internet. For that reason, they're able to see a little bit more deeply into brand behavior,” said Safian-Demers. “They're able to dissect how brands are behaving, and if they're actually putting their money where their mouth is when it comes to things like sustainability and diversity.”

Gen Z certainly cares about a variety of social causes that can impact their decision-making. The environment, abortion and racial equity were indicated as social causes teens expressed interest in for Piper Sandler’s survey.

This generation is also more passionate about inclusive branding, including more gender-free selections. A majority (61%) of Gen Z respondents in the Gen Z Fashion Report by student affinity network Unidays this March said they think brands should do more to prove that “style should not have a gender.” Just under half said they are more willing to buy from a brand that has better gender inclusivity through their marketing.

But exactly how much sway do these values have on purchase decisions?

With more sustainable products often costing more than other options, not everyone can pay for them despite their values. A study from last October by pricing consultancy Simon-Kucher & Partners showed that around a third of respondents were willing to pay more for sustainable products, but 60% of the participants said sustainability was an important factor in purchase decisions. 

At the end of the day, price is still a major determining factor, according to Tassin.

“I think that Gen Z, when they look at the drivers of environmental damage and what is causing our temperatures to get warmer, they are very much aware that these larger institutions have more influence than their own individual behaviors,” she said. “You also have to factor in the economics of it all, since Gen Z consumers are still starting out and they're not making huge salaries.”

But those values Gen Z is attracted to — self-expression, transparency and authenticity — don’t completely go down the drain, Safian-Demers said, even if pricing is still such a large consideration for the group. How a brand actually engages and demonstrates transparency with Gen Z is instrumental to its success among the age group.

“It’s not just the words that brands are using or the imagery that they're showing,” said Safian-Demers. “I think that the idea of inviting Gen Z into the process of the brand, into product development, product ideation and giving Gen Z a seat at the table is a really good way to engage this generation.” 

Gen Z consumers spend twice as much time socially interacting in the metaverse than they do in real life, according to new research conducted by Vice Media Group and Publicis Groupe's Razorfish agency. The study draws a link between playing video games and the metaverse, a broad buzzword encompassing blended digital and real-world experiences. 

The age group carries bigger aspirations tied to these online spaces, with over half (52%) of Gen Z gamers reporting they would like to make money in the metaverse and one-third desiring to build a career there. Twenty percent plan to direct their "fun" budgets allocated for entertainment and leisure to in-game purchases over the next five years, representing an average annual spend of about $50. 

In turn, one-third of Gen Zers would like to see brands develop virtual stores, and 30% were receptive to brands selling skins and apparel to outfit digital avatars. Marketers must be mindful of remaining unintrusive, as 63% of respondents stated they were concerned about data privacy in video games and the metaverse. Still, those figures are lower than for millennials (66%) and Gen X (70%), underpinning a budding acceptance of branded virtual experiences among younger cohorts. 

Razorfish and Vice Media Group's new study, titled "The Metaverse: A View from Inside," emphasizes that Gen Z not only spends more time in metaverse-adjacent spaces than older demographics, but also is developing more meaningful connections to their online identities. More than half (57%) of survey respondents said they feel freer to express themselves in games than they do in real life, while 45% reported their in-game identity is a truer expression of who they really are. The findings suggest brands have an opportunity to help enable those forms of self-expression and generate deeper loyalty and connections with Gen Z, including through the sale of custom skins and apparel for digital avatars that are common in many games. 

The study notes that the researchers were not focused on defining the metaverse, which can encompass a wide range of experiences, from true virtual reality — which has not seen widespread adoption — to multiplayer games like Fortnite and Roblox. Razorfish and Vice Media Group largely seem preoccupied with the latter category, tying many of Gen Z's metaverse preferences to casual online gaming. Some critics have resisted equating modern gaming with the realization of a true metaverse, pointing out that multiplayer titles like Second Life have technically been offering connected virtual experiences meeting these parameters since the early aughts.  

Still, Gen Z's attachment to games is noteworthy compared to other digitally-savvy groups like millennials, as is their receptivity to concepts like microtransactions. Major marketers have started to recognize this trend. Nike last fall created an interactive venue on Roblox called Nikeland, where visitors can participate in activities and try on virtual iterations of the company's gear. Nearly 7 million people had dropped in as of March.   

While gaming opens fresh avenues to engage otherwise aloof Gen Zers, brands should take note of how they prefer to be reached. In terms of what Gen Zers want to see from brands in games, 46% cited free products and experiences, 23% said "branded digital worlds" and just 18% said advertising. Nineteen percent of respondents stated they "don't believe brands belong in games/other metaverse experiences."

Razorfish and Vice Media also positioned their findings around empowerment. The research pointed out that Black, Indigenous and people of color under the Gen Z banner are more likely to "be" themselves in-game than white peers. One of the study's key insights is that "gaming is good for mental health," with 77% of respondents claiming they play to relieve stress and anxiety. 

The cognitive benefits of gaming have produced "mixed research" in broader academic studies, as noted on the Harvard Health Blog. Meanwhile, the pandemic has underpinned the deleterious effects prolonged isolation from real-world contact and connection can have on young people.