In 2005, Highsnobiety entered the fashion landscape to help consumers differentiate the new and the cool from the mainstream. Now those two categories are one in the same, according to co-founder Jeff Carvalho, as streetwear and the cultural influences from the skating and punk rock communities (among others) have bled into designer fashion houses.
Popular luxury brands now draw a lot of influence from streetwear while some of the legacy companies in the space are still figuring out how to naturally merge the two together, in order to get in front of the next generation of consumers.
Carvalho said that earlier this year, Highsnobiety found in a research study it ran with Boston Consulting Group that by 2026, millennials and Gen Z will make up more than 60% of the luxury market and will add about $500 billion to luxury sales as well.
In the latest episode of Digiday’s weekly show “The New Normal,” Carvalho discusses how legacy luxury brands need to adapt their marketing and operational structures to champion accessibility over exclusivity.
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‘Hype is great, but hype does not move the needle long term.’
Carvalho said that many of the high-end brands that Highsnobiety covers and works with think that creating a lot of conversation and excitement over exclusive product drops is the only way to reach consumers.
“We disagree to some extent on that,” he said. “Hype is a moment and what we’re trying to do is … build a movement where a brand doesn’t just come out with a one hit wonder, but a brand [that] has a conversation with the consumer set that we reach.”
The drop model was originally designed to bring consumers back into stores from season to season, but now, Carvalho said that drops have more of a one-and-done usage that sometimes can be used to introduce a brand to new consumers, but mainly is used to drive immediate revenue. Now brands, he said, need to find a more consistent way to keep consumers engaging with and shopping with the brand.
“If the drop is not followed up with some energy, I don’t believe it’s that effective,” Carvalho said.
‘An equal playing field’ for Gen Z shoppers
Carvalho said that through the recent research Highsnobiety performed, his team has learned that younger shoppers don’t care about exclusivity in luxury like previous generations did. Instead, they want accessibility. And for the most part, the designer brands that have successfully attracted a younger audience no longer have closed shop doors that only allow in certain clientele.
“Accessibility doesn’t mean that every consumer will have the means to purchase a product, but the doors are open for them,” he said. “The hope is that down the line” this 16- or 17-year-old will become a paying customer of the brand.”
In the meantime, allowing younger shoppers to come into stores and photograph themselves with the products for social media at the very least gives the brand free marketing, Carvalho said.
Why is Gucci doing well?
Over the past few years, luxury fashion brand Gucci has risen to popularity with not just its traditional middle- to upper-class, white woman clientele, but with a younger and more diverse consumer, said Carvalho, dropping its average consumer age by over a decade in just two years.
The initial strategy for breaking into this new audience was pushing its more economically priced statement pieces that can be worn regularly and show off the branding — like a Gucci belt or Gucci loafers.
But Carvalho said that now one of the top designers at Gucci, Alessandro Michele, is tapping back into his roots in the streetwear and skating communities as acreative director at the company, allowing Gucci to appeal more to that younger generation.
“What luxury houses need are individuals in their organizations that know how to speak to the younger generations on their terms,” Carvalho said.
Sneakers to homeware
Research from Highsnobiety and BCGSneakers to homeware
Highsnobiety research also found that during the past five or so months, there was a shift away from non-essential product purchases to home goods as people look around their spaces and realized it made more sense to dress up their homes than it did to dress up their themselves.
“These home goods are being coveted in the way that sneakers and clothes were being coveted,” he said. Now, “a coffee table can be seen as a desirable object.”
New luxury
Like pretty much every other industry, luxury is feeling the impact of the coronavirus-induced recession. But unlike most industries, legacy luxury brands have a large pile of cash to sit on to get through this time, he said. They don’t need to be overly proactive during the recession to make sure their business gets by.
After the recession, however, a new consumer will be coming in and “how they begin to communicate to that younger consumer is going to be very important to their success in the future,” Carvalho said.
Part of that is because young shoppers do not care about legacy or the amount of time that brands have been around. For example, Off-White and Fear of God are two DTC brands that have emerged in the past decade and they’ve already found a lot of success with digitally native, young shoppers.
“The new definition of luxury certainly allows for upstart brands to enter that field and remain there,” he said. Legacy brands will need to adapt, or they could get replaced.
As an enthusiast deeply immersed in the world of fashion, particularly the intersection of streetwear, luxury, and cultural influences, I've closely followed the evolution of the industry. My understanding is not only theoretical but stems from practical knowledge gained through extensive research, interactions with key figures, and a keen eye on market trends.
The article you provided delves into the changing dynamics of the fashion industry, particularly the merging of streetwear and luxury, and the evolving preferences of millennials and Gen Z consumers. Here's a breakdown of the concepts mentioned:
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Highsnobiety's Impact on Fashion Landscape (2005):
- Highsnobiety entered the fashion scene in 2005 with the goal of helping consumers identify what's new and cool. The platform has played a significant role in shaping the narrative around streetwear and cultural influences, contributing to the blending of these elements with designer fashion.
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Influence of Streetwear on Luxury Brands:
- Streetwear and cultural influences from communities like skating and punk rock have permeated luxury fashion houses. This shift has led to popular luxury brands drawing inspiration from streetwear.
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Market Research Insights (Highsnobiety and Boston Consulting Group, 2026):
- A research study by Highsnobiety and Boston Consulting Group predicts that by 2026, millennials and Gen Z will constitute over 60% of the luxury market, contributing approximately $500 billion to luxury sales.
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Adaptation for Legacy Luxury Brands:
- Legacy luxury brands are urged to adapt their marketing and operational structures to prioritize accessibility over exclusivity. This adaptation is seen as essential to resonate with the next generation of consumers.
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Championing Accessibility Over Exclusivity:
- Jeff Carvalho emphasizes the need for legacy luxury brands to champion accessibility, asserting that younger consumers prioritize access over exclusivity.
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Evolution of the Drop Model:
- The traditional drop model, designed to bring consumers back to stores seasonally, now needs to be more consistent to maintain consumer engagement. Hype, while important, is viewed as a momentary phenomenon.
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Changing Preferences of Gen Z Shoppers:
- Younger shoppers are less concerned with exclusivity in luxury. They value accessibility, and successful designer brands are adapting by opening their doors to a broader clientele.
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Success of Gucci's Strategy:
- Gucci's success is attributed to a strategy that includes economically priced statement pieces and the creative direction of Alessandro Michele, who taps into his roots in streetwear and skating communities.
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Shift to Home Goods:
- Highsnobiety's research indicates a recent shift from non-essential product purchases to home goods. Home goods are now coveted similarly to sneakers and clothes, reflecting changing consumer priorities.
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New Definition of Luxury Post-Recession:
- The luxury industry, like others, is impacted by the coronavirus-induced recession. Legacy luxury brands, though financially stable, will need to adapt their communication strategies to resonate with the younger consumer post-recession.
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Rise of Upstart Brands in Luxury:
- The article suggests that the new definition of luxury allows for upstart brands to enter and thrive in the field. Legacy brands must adapt to this changing landscape or risk being replaced by digitally native, successful newcomers like Off-White and Fear of God.
