Vogue Business x Archrival (2024)

This generation is growing up with radically different priorities, influences, and technology than previous ones, causing their path to purchase toblur.

They’re grappling with the fact that their primary marketplace — social media — is also their entertainment centre, social hub, learning platform, and news source, making shopping a medley of influences andmindsets.

To better understand the shift, US-based youth culture agency Archrival conducted a qualitative and quantitative research study with Gen Zs (13-25) and their millennial (26-40) counterparts in the US. They surveyed a nationally-representative sample of 750 Gen Zs and 250 millennials, and conducted qualitative focus groups with dozens ofGenZs.

For young consumers, social media remains the main source of inspiration for fashion and beauty purchases. Globally, three in 10 Gen Zs use social media to source inspiration for things, and they’re 11 per cent more likely to do this than any other generation. Per Archrival’s data, 77 per cent of Gen Zs and 79 per cent of millennials in the US are actively seeking style inspiration at least monthly, with almost half of those looking for style inspiration on social media. When asked where they learn about new brands, products and experiences, video reigns supreme: YouTube is the most popular platform with Gen Zs, followed by TikTok, thenInstagram.

As young people consume more content than ever, it’s getting more difficult for brands to cut through the noise. 80 per cent of Gen Zs agree that they are exposed to more brands and advertising than any other generation (compared to 73 per cent of millennials), per Archrival. And short form video — including TikTok, one of the most powerful inspiration channels for Gen Z according to Archrival’s research — is veryunpredictable.

Instead of becoming overwhelmed and tapping out completely, Gen Zs want to find the gold among theclutter.

“Because Gen Zs came of age in an era where they’re constantly bombarded with content and information via social media, they consider inspiration and discovery foundational to their experience and even core to who they are,” said Ben Harms, chief growth officer at Archrival. “The challenge for brands is delivering that inspiration to them in the right ways at the right moments.” 71 per cent of Gen Zs say, “I’m always open to discovering new brands.” So how can brands reach young people and inspire them tobuy?

As a result, retailers are behaving more like media companies and media companies are behaving more like retailers, says Alex Hawkins, strategic foresight editor at agency The Future Laboratory. One example is Half Magic, a makeup line and joint venture between film and TV production studio A24 and makeup artist Doniella Davy, who created the beauty looks on A24 show Euphoria. Most recently, the brand has released a makeup kit inspired by the new Sofia Coppola filmPriscilla.

Despite their reputation as digital natives, Gen Z shoppers still value in-person experiences. Bricks-and-mortar stores are an important component in their fashion and beauty consumption. 74 per cent of Gen Zs think IRL experiences are more important than digital ones (compared to 66 per cent of millennials). 73 per cent of Gen Zs prefer making a purchase in store while shopping, versus the 27 per cent of Gen Zs who prefer to make a purchase on social media. And while online rules for inspiration, 68 per cent of Gen Zs prefer to try before they buy (versus 61 per cent of millennials). Just 32 per cent prefer to buy without trying. However, typically, they conduct in-depth online research before making the purchase instore.

During and after lockdown, brands from Balenciaga to Vans have invested heavily in the metaverse. Even though some labels have found success in platforms like Roblox, for many of Gen Z, the metaverse just isn’t thatexciting.

While around half of Gen Z respondents had created a virtual avatar (52 per cent), used an app filter (49 per cent) or made friends in a virtual game (44 per cent), when asked what would make brands seem “cool”, just 32 per cent of Gen Zs said presence in a virtual world like Roblox or Decentraland (versus 28 per cent of millennials). Also, only 16 per cent of Gen Zs believe that branded NFTs would make a brand seem more cool, compared with 28 per cent of millennials. When interviewed by Vogue Business, many of Archrival’s Gen Z community didn’t know much about the metaverse at all. And those who did wereambivalent.

“I’ve heard about the metaverse, the virtual world thing, on Facebook. It feels as if they’re pushing it on us,” says 22-year-old Amaria Vail, who took part in Archrival’s qualitative research. “But for now I’m notinterested.”

As social media became more important to the inspiration phase, platforms and marketers believed young consumers would be keen to impulse buy on social channels, with a convenient “swipe to buy” mentality. Many social platforms felt they could monetise this linear journey by creating in-app shopping, so users could purchase instantly when spotting a product they like. Platforms such as TikTok and Instagram, under this assumption, launched social commerce features like Instagram Shop and TikTok Shop, for seamless in-app shopping. While social commerce is popular in the APAC region, it remains to be seen whether TikTok’s Shop endeavours will pay off. Instagram removed the Shop tab from the app at the start of this year, signalling mixedresults.

In reality, many Gen Z consumers aren’t buying products impulsively at the point of inspiration. In fact, young people are increasingly using social media as a search engine, to research products they’ve seen online or IRL and hear from others about the item’s fit, quality, packaging andmore.

TikTok search volume has increased “dramatically” over the last two years, says Kristina Karassoulis, head of luxury and auto brand partnerships for global business solutions at TikTok. “We’re seeing brands now come to us and ask what their search numbers look like, because it’s such an important factor.” Often after a brand releases a campaign, TikTok will see a spike in searches for the brand, as users research further following the point ofinspiration.

And 56 per cent of Gen Zs said “brands often lie about their products/services”, compared with 47 per cent of millennials. Comments sections are also a key area of the researchphase.

This method for buying is influencing how brands approach sales and marketing, says Hawkins. “For brands, there’s an opportunity to become educators during the research-to-buy process, offering informative content about the product and engaging with reviews, unboxing videos and online communities. It’s also crucial to create a seamless online and offline experience as Gen Z so often switches between the two. Their desire for information has also given them a real awareness ofvalue.”

Meezab Murad, a 21-year-old student in Dallas who was part of Archrival’s focus groups, says she only makes impulse purchases if she’s read some reviews first. “I think it depends completely on where I see the product, if it is a social media influencer or a content creator with similar skin tone, body type and height, I’d be more inclined towards an impulse purchase based on their review.” She’s never used a TikTok or Instagram shop, “I wasn’t aware it was athing.”

To tap into that, youth-focused DTC fashion and beauty brands like Djerf Avenue, Refy and Rhode use user-generated content (UGC) of customers wearing or showing how they apply products to inform young consumers about their brand. Luxury labels are less inclined to share UGC because they fear branddilution.

Almost half of Gen Zs (48 per cent) also use Amazon as a tool to hunt down dupes (lower-priced products that look or function like the original). 48 per cent of Gen Zs and millennials compare prices on Amazon if they know they need to buy something, perArchrival.

During the research phase, Gen Zs often collage images of products they want, either in wishlists online, Pinterest mood boards or even folders of screenshots in their phones, to save for later. “When I see [fashion or beauty] I like, I normally take a screenshot that has the influencer’s username in it so that I can go back to it if I need it,” says Emma Wolan, a 20-year-old student at the University of South Virginia, who regularly shops for fashion and gains inspiration mainly from TikTok. “I have a folder in my camera roll that’s just things that Iwant.”

What’s often overlooked is that Gen Z is also still very much driven by price, Hawkins says. “Because they’re price-conscious and value-driven, tangible rewards, discounts and exclusive access via loyalty programmes are all pretty effective.” That’s why in the research phase, before purchasing a product, popular actions among Gen Zs surveyed by Archrival include comparing prices on Amazon and looking for sales or specialoffers.

Gen Z is the loneliest generation, according to the Cigna US Loneliness Index. Insights platform GWI also found that almost a third (29 per cent) of Gen Zs say they are prone to anxiety. In spite of this, the connection brands provide can help young consumers feel a sense ofbelonging.

LA-based brand Madhappy is both a clothing brand and a wellness community providing mental health support and resources, as well as community events alongside selling hoodies andT-shirts.

“Our hope has always been to create a brand that goes deeper than something transactional. We believe that the beauty of Madhappy is the ideology, the embrace of a shared perspective and a way of looking at the world,” says founder Peiman Raf. “Tactically, we’ve accomplished this through our physical retail spaces and events — creating programming and ways to engage with the brand. Since the beginning of our retail presence up to now at our first flagship, we’ve always found it important to dedicate space to the ethos of thebrand.”

At Madhappy West Hollywood, for example, the brand introduced a “Local Optimist Space” — named after its bi-annual periodical Local Optimist — as a multimedia room featuring work from a rotation of artists who would design an ethereal, audiovisual experience for individual viewers. “It’s a great example of the value we see in creating a world, rather than solely creating products,” Rafsays.

Represent is a 12-year-old brand launched by Manchester brothers George and Michael Heaton. The brand turned over £50 million last year and is now building a presence in the US. A large portion of Represent’s customers are below25.

“Creating a brand isn’t just the product for us, it’s about the story, the lifestyle and the way we show up with everything we do,” says George, writing from his new home in LA over email, where he’s building the US business. Alongside its online communities like the Rep Talks Facebook groups (which has 14,700 members), Represent holds a mixture of physical community activities that go way beyond product drops, to make its community feel part of the brand journey. This chimes with young consumers’ needs today: when asked which retail experiences would make them excited to shop in a physical store, over a third of Gen Zs and millennials said unique in-store events (e.g. live music, influencer meet-and-greets, pop-upshops).

Represent also hosted a Rep Talk day in Manchester last year, bringing more than 50 of its most-engaged customers to a Q&A session with George, Michael, James Gullick (chief product officer), and Stefan Lewis (chief digital officer). “We wanted to give them further insight into the brand’s future, and understand their feedback on product areas. It was very insightful to both sides,” says George. Represent’s activewear line 247 aligns itself with the functional fitness community, with the founders, employees and fans of the brand participating in events such as Hyrox and ultra marathons, inviting the community to take part with them. 247 even has its own app, where the community can access co-founder George’s daily workoutroutines.

Gen Z may be one of the most-informed generations, but they’re also one of the least committal, according to Harms atArchrival.

The Frankie Shop is an affordable luxury label that’s played into UGC via celebrating customers post-purchase. The brand’s Instagram and TikTok accounts feature regular customers styling and wearing its cult tailoring and separates. While The Frankie Shop’s consumer base is predominantly millennial, the brand is building Gen Z users via UGC onTikTok.

“We dress people with real lives, real jobs and real problems, so sharing how our consumers wear our pieces is the best possible way to inspire others to try these outfit formulas,” says the Frankie Shop founder, Gaëlle Drevet. “Seeing Frankie Shop pieces on real-life people helps our customers envision themselves in these designs, knowing that they are not just for the runway but practical and elevated choices for every day.” Similarly, influencer label Djerf Avenue also reshares customers wearing its tailoring and separates, naming them the #djerfavenueangels.

Beauty brand Refy was launched by influencer Jess Hunt three years ago. Unlike makeup-artist-led beauty brands or megabrands, Refy prioritised nano and micro-influencers on its social feeds, resharing all different types of women using theirproducts.

“Our products are all high-performance and they have very innovative formulas and applicators, so educating with tutorial style content is essential to make sure the audience knows how to use the product properly to get the best results,” says CEO JennaMeek.

To respond to the growing importance of UGC, TikTok launched “Branded Mission” last year, meaning that brands can approach users with over 1,000 followers to participate in a challenge, and on the back end it can access all the UGC in one place to easily reshare. Asos used this technology during Halloween 2023 on a spooky outfit challenge. “The user benefits because they go viral on the platform via the brand’s page and the brand wins because they’ve got an amazing creator or something that feels so authentic building that content,” shesays.

Because there's no start or end point to the purchasing path today, Gen Zs can inspire others whether they’re at the beginning of the journey, in the research phase or whether they’re at the review [post-purchase] phase, says Kristina Karassoulis, head of luxury and auto brand partnerships for global business solutions at TikTok.“It's about entertainment. It's about participation. And most importantly, it's aboutconnection.”

Brands that get it right in 2024 will win with GenZconsumers.

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