I interned as a brand consultant over the summer and for one of the projects I conducted market research on which brands appeal to Gen Z and younger Millennials (aged 18-34) and which brands are most trusted by them. What appealed to me the most was how luxury brands are going out of their way to appeal to this demographic, rather than the older generations despite them having very little buying power.
That’s because Gen Z tend to have a big influence on their parents’ buying decisions! For the sake of this blog, I’m going to refer to this demographic as Gen Z rather then specify “Gen Z and younger Millennials” each time…
A few observations on Gen Z behavior that are relevant for this blog post:
Gucci, an Italian luxury house, is trying to appeal to this consumer base through the uber-trendy space of virtual reality. Such means have not been taken fully into account by other luxury brands and Gucci has managed to reinvent itself by creating digital marketing tools and adopting emerging technologies such as augmented reality, virtual reality, AI chatbots and applications. They have also created virtual versions of their collection and products that are being sold on platforms such as Roblox, Drest (a virtual styling app), Tennis Clash (which is used for Esports), Sims 4 and for VR chat apps where individuals can express themselves through their style.
I went onto the Gucci website to check out the collection (https://www.gucci.com/us/en/st/stories/article/sneaker-garage?gclid=CjwKCAjw4qCKBhAVEiwAkTYsPA0RXeN_H9XHuE2MC2D0YxQ0e7jLMhSNOSeGzdqG36OSpdXuBPxo8RoCvloQAvD_BwE). The virtual sneaker collection is different from their in-store range and is super customizable! Both work as a plus point for Gen Z since they like to express individual style through unique items. These sneakers come in florescent colors, funky patterns and have the interlocking double G logo all over them. There are no costs to the supply chain, no packaging cost, no sales associate involved, zero waste, and in a way it offers “free” marketing since Gen Z are influencing the retail market right now. The virtual sneakers only require the initial R&D costs that allow limitless customization thus making these items “trendy” for more than a season.
As a result, the virtual sneakers cost $11.99 in the Gucci app; considering the cheapest Gucci sneaker available on their website is $680 this is most certainly a bargain to someone who wants Gucci accessories but is not interested in their exorbitant price tag. This product is a non-tangible item which will be representative of one’s “wealth” and style on a virtual platform. The CEO of Wanna, the technology company that developed these virtual sneakers for Gucci, stated that they are projecting big chunks of revenue for fashion brands will come from digital products in the next five to ten years!?!
Workplaces and schools have adopted a hybrid approach given the current circumstance and if they continue to do so in the near future, leading to virtual interface gaining more popularity, these brands will have a lot more opportunities to monetize these virtual accessories. Kids in grade school for example, who may already be at a disadvantage socio-economically, are now put in a position where their classmates are buying branded virtual sneakers like Gucci. As this snowballs, more and more accessories will be available in Zoom classrooms where kids will feel the pressure to keep up with peers especially if the majority of their classmates are buying these accessories. While $10 per accessory may not seem like much, it’s not a cost many parents will be willing to bear (especially for kids that are on food stamps, get free breakfast, etc.). Differences in clothing obviously exist already in the real world, but it’s not like middle schoolers are wearing Gucci shoes to class at the moment.
Capitalism has turned luxury into necessity (at least in the minds of many) and in this era of growing inequity unhealthy consumer behavior is thriving. With Gucci entering into the virtual space, it has opened up more avenues for these luxury retailers to make money and give the consumer a false sense of fulfillment.
How do you guys feel about luxury retailers making their mark in virtual space? Since most of us in the class fit the demographic that’s being targeted, would you guys buy the virtual Gucci sneakers?