- Robyn Turk |
The luxury market is an area of growth within fashion; in the 12 months that ended June 30, 2018, the top 100 luxury companies generated 247 billion dollars in revenue and BrandZ’s report of the 100 most valuable global brands in 2019 noted luxury as the fastest growing category.
There are several trends affecting the success of the luxury market, and the executives at Need Supply Co. can attest to the fact that the young, luxury shopper is an important factor. Need Supply Co. carries both well-known brands and emerging, independent designers, most of which with luxury price tags, in its Richmond. VA store and international e-commerce site.
Despite the fact that the average household income of people aged between 22 and 37 is 69 thousand dollars according to an analysis of census data conducted by Pew Research Center, Millennials and Gen-Zers are shopping luxury fashion.
FashionUnited sat down with Fanny Damiette, VP of brand and marketing, and Chris Bossola, founder of Need Supply Co. to learn more about young luxury shoppers.
FashionUnited: Need Supply Co. mainly caters to the millennial and Gen Z consumer. Have you found that the two generations shop similarly to each other?
Fanny Damiette: They are influencing each other. Millennials were a disruptor in the whole consumption chain. Everything that comes afterwards is going to be influenced by Millennials because they set a different tone. First of all, they're digital-first and they're the first generation to decide that. They influence Gen Z in that way. They also care about the future of the planet, about sustainability, social well-being and healthcare, which is also very influencing. Right now, what you see in the media and in creative industries is a product of that millennial influence, whether they are producing that content or ideas, or whether they are consuming and therefore influencing the production.
Gen-Z is influenced by Millennials, but I would say that Gen-Z is not just following, they also have their own thing. They have a mindset, that gives them a higher level of scrutiny over every classic marketing tactic. They see through it in in two seconds. So we never play "marketing games." We watch how they behave, especially with our competitors, and we find, even on social media, they're reacting. Nothing escapes them or their scrutiny, and that's been stronger here than with millennials.
FU: What marketing strategies have found work best for this consumer?
FD: We try to root everything we do in authenticity. We don't use influencers because it's not authentic. We try to speak one-to-one with our consumer instead of trying to reach as one-to-many. With brick-and-mortar, that's very easy. The way we translate that online, is by remaining very attentive to what's happening on our social media, what kind of answers we get. We always try to have a conversation with our consumer, and the conversation happens on that
level, but also on the more intellectual level where we're trying to show them the kind of things that we think they are interested in or curious about. For example, in our content we always show up-and-comers. The authenticity we try to convey works, because we're building trust. And maybe we don't see a result immediately, but we know that we're building loyalty with our consumer.
FU: Are there a lot of millennials and Gen Z shoppers who are buying luxury? Who are these shoppers? Which markets are they in?
FD: They do spend a sizable amount of their revenue, but that doesn't mean that they're super wealthy. They don't compare to the Gen X or the baby boomer luxury consumer. They can be students and buy Margiela of Raf Simmons. We see that happens. These luxury labels have a strong appeal because from a cultural standpoint, they mean something to this target. This customer that everybody's trying to define, it's a mistake to assume that he or she is different from the customer who shops at Zara or Uniqlo. They're the same person, they're just very savvy in the way they consume. They buy high and low, that is a real trend we see them following. They will buy denim from Uniqlo, and then they put you know a Raf Simmons jacket sweater over it.
It goes along with the idea of the educated customer. They know what they're buying and what it's worth. They consider items based on the emotional value attached to it. For this young customer, it's not about price point. It's about emotions. That is where they're very different from the older luxury consumer, because for them, wealth was about status. For the Millennial and Gen X consumer, it's not a question of status or a display of wealth. It's a question of taste and a display of mindset. If this consumer wears Margiela, it says something about them and their mindset. They are saying, "This is what I care about, this is the kind I person am, this is how cultured I am. This type of customer is smart in the way they spend their money, and they will save on certain things to be able to splurge on that one thing that they want and that is a strong signifier for them.
Chris Bossola: The new currency is cultural relevancy. That's what determines the worth of an item now, rather than the material it's made from or showing everyone that you buy expensive things. It's about signaling a certain level of cultural fluency.
FU: You describe that the shopper as "educated." Do you find that they come to you already knowing what they want to buy?
FD: Need Supply is still a place of discovery, for sure. That's what we're known for. But there is an aspect of it where our customers do have an idea of what they want. A lot of our competitors are prescriptive in the way they introduce the customer into their journey. They might say "wear this skirt with those shoes," or "how to wear the fall trends," whereas we don't do that. Our customers already have a strong sense of self. They already know exactly what suits them or what doesn't suit them, they're willing to experiment, they don't care about conventions.
They still come for an element of discovery because they know that we have interesting, emerging designers or a small Korean brand that we can show them. But they come to us knowing exactly their style, their personality idea. We're in that sweet spot where we give them what they expect and sprinkle in enough surprise to be sure they come back.
FU: How has consumer behavior changed in recent years?
FD: The customer having access to everything has been a major disruption. Consumers now have access to everything, giving them choice fatigue, and they need a trusted curator.
Our answer is basically to double down on the product view. Because shoppers know they can find anything anywhere, we need to set ourselves apart. A lot of our competition, brick and mortar and online, is actually going in the exact opposite direction from where we're going in that they're trying to be enough for everybody. The problem with that is that when you try to please everybody, you don't really please anyone.
We're trying to remain narrow in our curation, always thinking about the latest trend that will actually cater to our customer. Instead of carrying the whole collection from a designer, we try to find the 5, 10, maybe 20 pieces from the collection that make sense for our customer.