Gen Z redefining the luxury market—why TikTok and IRL experiences should be embraced by legacy brands

Gen Z Voices explores the Gen Z perspective on marketing, technology, social media and the future of the ad industry. Submit your essays here. Gen Z is predicted to be the No. 1 luxury client by 2030, which leaves only six years for brands to build a brand strategy that courts this demographic. Wary of change, most luxury brands reserve their efforts for an older, super-elite demographic. They stick to appointment-only gated retail, supplemented by a glossy ad in Vogue or an avant-garde TV spot, very little of which engages a wider audience, let alone speaks to Gen Z. Équité Research has highlighted that less than 10% of luxury brands are able to tell a compelling story, predicting that 50% of luxury brands risk extinction if they fail to adapt. An emotion-led cohort, Gen Zers value an authentic bond with the brands they choose to champion. This is where the importance of accessibility comes in. To build a solid relationship with Gen Z, it’s vital that luxury brands switch tactics: Community over exclusivity To survive, brands need to build a regular dialogue with Gen Z via an inclusive community. Brands need to create accessible touchpoints and create “new news” to win over Gen Z and future-proof themselves. Ad Age Gen Z Contributor Column We welcome Gen Zers to submit fresh takes exploring Gen Z within the ad industry Learn more here Recognizing the value of cultural currency over short-term sales figures is key and something that Italian high-fashion brand Moncler has wised up to. Its London fashion show earlier this year was a celebration of cross-disciplinary collaboration and co-creation, accessible to 10,000 members of the public who were able to sign up online. It shows luxury’s No. 1 survival tactic: understand and cater to luxury’s metamorphosis from an ultra-exclusive world to one that appreciates the value of a loyal community. Here are some key tactics brands can embrace: Retail and activation Physical activation can be a powerful tool when it comes to engaging Gen Z and nurturing a community. This demographic’s purchase journey is no longer linear; brands have a host of touchpoint opportunities to reach them, from social media to online retail to IRL experiences. To really woo a Gen Z audience, a luxury brand should engage across all of these opportunities. Using real-life experiences such as pop-ups and activations gives brands a chance to be brave and inject some playfulness into their brand story, conveying it in an exciting and fresh way. IRL activations are only temporary, so it’s an easy way for a hesitant luxury brand to dip its toes into the new culture-fueled luxury world. Physical experiences open a brand up to wider audiences, forging relationships and emotional connections. Those that do get it right bridge the gap between art and culture, inviting wider audiences to discover their brand story in an engaging and memorable way. Check out the latest Ad Age events and award programs Chanel’s Lucky Chance Diner in NYC’s Williamsburg does a great job of inviting a community to experience their brand in a super playful way. Burberry’s takeover of new-gen greasy spoon café Norman’s in North London celebrated the art of discovery and exploration in cities worldwide. And, not accidentally, it generated a lot of buzz from Norman’s fierce Gen-Z fanbase. Hennessy, meanwhile, celebrated its well-earned status within hip-hop by partnering with South London’s iconic cHIP sHOP, championing rising artists who keep the heartbeat of hip-hop alive. The authentic engagement with the hip-hop community earned cultural cache with Gen Z. Tackling TikTok Gen Z is very much under TikTok’s spell. So, it’s a no brainer to tap into the platform to reach them. Gucci cleverly using TikTok trainspotter Francis Bourgeois in a campaign was arguably the cornerstone for this approach. Since then, we’ve seen other big names follow. Valentino made waves by inviting Tube Girl to its fashion show, while Gucci had Chicken Shop Date superstar Amelia Dimz interviewing on its red carpet. Creating totally unexpected pairings will delight and surprise Gen Z audiences while showcasing a brand’s support of individuality and passion. Location, Location, Location When it comes to focusing on community, luxury brands also need to consider where they show up‚ focusing on young consumers by simply hanging out where they do. Savvy luxury brands are reappraising where they appear and spend their marketing money. They’re trading Bond Street, Fifth Avenue and Rodeo Drive for multicultural creative neighborhoods where high-net-worth Gen Zers are more likely to take notice, such as London’s Soho or New York’s Lower East Side. Chanel staging a fashion show in Manchester, U.K. is an unexpected first that illustrates this change in focus. Meanwhile, Gucci and Burberry are engaging the art-led community in London’s arty Shoreditch by commissioning huge street-art wall murals. Brands know that these are the places Gen Zers feel at home—so it’s important to meet them there. In today’s rapidly changing world, traditional markers of luxury are not sufficient to capture the attention and loyalty of consumers. While consumers might have been satisfied with this approach, Gen Zers hold different values and opinions that they demand luxury brands embrace. Those that want to not only survive but win need to embrace the new, accessible era of luxury with open arms, while never compromising their brand story. Building a close relationship with Gen Zers calls for relentless innovation and customer engagement. It’s the only way to expertly capture and respond to the ever-evolving tastes of Gen Z. 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Gen Z redefining the luxury market—why TikTok and IRL experiences should be embraced by legacy brands

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