The A to Z of Gen Z and millennials: understand the next generation of consumers

Click here to download the full report.

When we started produc­ing Drapers' annual Gen Z and Millennials report in 2019, it was clear that these were two fascinating and influential groups of consumers – widely seen as technologically savvy, aware of climate change and fashion’s environmental impact, and yet, at the same time, engaged in a unique form of social media-driven consumption of fashion trends.

After living through several tumultuous years, from the Covid-19 pandemic to the cost of living crisis, this year’s full report reveals that these shoppers are more interesting and complex than ever. These two generations, which for the pur­poses of the report comprise 18-to-43-year-olds, (Gen Z, aged 18-27 and millennials aged 28-43, officially Generation Y, but so called because they became adults at the start of the new mil­lennium in 2000), are still a mix of contradictions. Perhaps understandably, given the complexity of the world they live in.

This year’s data, from our survey of 2,000 consumers, contains mixed messages on sustain­ability: different questions elicit different responses, but also that they are buying more sustainably than ever: 68% purchase pre-loved or second-hand fashion items. Both groups say they are planning to spend less on fashion in response to the cost of living crisis (41% plan to reduce fashion spend, up from 24% in 2022), but seemingly paradoxically, they continue to contribute to retailers’ soaring sales. In June 2023, for instance, Inditex Group, owner of high street giant Zara, reported a 13% rise in sales to £6.5bn in the three months to 30 April 2023.

And after years of preferring online channels, stores were ranked number one this year, as 53% of Gen Z and millennials chose them as their preferred shopping channel – despite the fact that 92% also now report shopping on mobile apps, demonstrating their truly omnichannel approach to shopping for fashion now. Read our analysis of this in the full report.

The data also suggests both groups are a large demographic in flux, which is probably true for most consum­ers – and businesses – still finding their way in a post-pandemic environment. But there are some clear messages for fashion business lead­ers to take from our data, too.

First, with consumers channel hopping so often, it is clearer than ever that Gen Z and mil­lennials use every shopping channel interchangeably – online, in store, apps, social media – and will switch on a whim. The journey to purchase is not linear and omnicommerce is here to stay. Fashion retailers and brands need to ensure that their proposition is seamless, and equally strong across all channels. Whether you achieve this via a full omnichannel operation or via partnerships and pop-ups, if you are not strat­egising in an omnichannel way, you will lose out.

Second, there are multiple sources of change for Gen Z and millennials that brands and retailers are – and will need to – keep track of and respond to. As already mentioned, the growth of recommerce via resale and rental continues, which we explore in depth in the full report. Customers now see buying pre-loved fashion and reselling their own items as normal, and, as we discuss, there are a variety of ways brands and retailers can access this opportunity without having to build an entire second-hand or rental logistics operation.

The customer experience on mobile phones is, as our data suggests, a channel ripe for con­tinued improvement. Customers are particularly keen to see more sizing and fit-related technology and other services to help them envisage what fashion items will look like, and better images, video and virtual avatars would also be well received to help bring prod­ucts to life across all digital channels.

The fast development of artificial intelli­gence (AI) technology is shining a spotlight on the use of data, forcing brands and retailers to ensure customers are comfortable with the pace of change in this space. The received wisdom around data sharing is that customers are comfortable with it when they feel they are getting something in return.

However, what our analysis shows is actually more important for Gen Z and millennials is that they broadly trust the company they are interacting with, which can include all ways a business operates, from service delivery to sustainability messaging. As data breaches becoming more common, fash­ion businesses will need to work hard to build and retain that trust.

With another rollercoaster of a year under their belts, Gen Z and millennial shoppers con­tinue to be shaped by a unique set of circumstances and conditions. Our analysis of this year’s full data shows that fashion brands and retailers marketing and selling to them will need to remain alive to how they are evolving, and ensure they are right alongside them, align­ing with their values and expectations.

Click here to download the full Gen Z and Millennials 2023 report.