It’s time for some straight talk about Gen Z and retail. This isn’t about their ethical, social justice, and climate issues.  It’s about a current of concern about our future leaders and what they are facing in their 20s. And their needs must be addressed by retailers if they want a healthy, productive workforce. There’s a lot more than meets the eye with Gen Z.

Digital Natives

It’s no secret that Gen Z is a unique demographic. Their wariness of convention and the fact that many of them came of age during a global pandemic has long set their consumer behavior apart from their predecessors. Perhaps, then, it will come as no surprise that Gen Z has trouble with some of the verbal and nonverbal skills that other generations took for granted.

In video calls, nonverbal communication can be as essential to getting a message across as what’s being said. That’s exactly where Gen Z can’t hang. Remember a decade ago when we said we had no idea how smartphones and social media would impact the next generation? Now that we do, the reality of the new digital world we’ve created is surreal and concerning.

With that said, let’s take a look at the reasons behind the communication crisis, and what it might mean for the retail industry.

The Reasons Behind the Communication Crisis

There are many reasons that Gen Z is struggling to express themselves through body language: coming of age during the pandemic lockdowns and around 7.5 hours of screen time a day, for starters. Rising rates of depression, anxiety, and autism diagnoses also make the cut. The result? Trusted firms such as Deloitte and PwC are releasing pretty basic nonverbal communication guidelines and courses to help next gens communicate effectively with their peers and managers. Here’s a snippet from Deloitte’s latest guidelines on video conferencing communication:

“…paying close attention to how teammates sound can provide greater insight into the way they are feeling and their reactions to a particular conversation. For example, if you are trying to gauge the reaction to an idea, silence can often signal you have lost the audience and/or they are deep in thought.”

While this type of guidance seems comically intuitive for most people born before 1990, the explanation of basic nonverbal cues is exactly what some next gens need to hear. No, it’s not an episode of “Black Mirror,” it’s just the reality of digital natives’ limitations. Nonverbal communication, both in the workplace and in day-to-day life, is a significant challenge for the next generation. And managers of Gen Z need to be empathetic mentors in teaching their younger employees how to up their game when communicating, on all levels.

Mental Health Awareness Means Gen Z Has Different Expectations

In addition to growing up juggling screens during a global pandemic, one out of every 36 children today is diagnosed with autism, although researchers have yet to home in on the exact cause. But it’s important to note that next-gen consumers are more aware and accepting of neurodiversity than any generation that came before. We’ve spoken before about Gen Z’s mental health crisis and members of Gen Z continue to report more mental health issues than any other demographic. This generational acceptance of what it’s like to be different needs to be embedded into any retail workforce culture. Gen Z expects compassion and support.

Alongside the rise in mental health diagnoses is also a rise in mental health prescriptions. Pharmacy Times reports that prescriptions for Adderall increased by more than 30 percent over the past five years, accelerating even more dramatically during the pandemic –– leading to a global shortage of commonly prescribed and abused drugs, including the ADHD medication, Adderall, as well as methylphenidate, which is a substitute.

In terms of brand awareness, Gen Z feels like mental health-oriented brand messaging is simply a part of the brand transparency that they require from modern retailers. A whopping 71 percent of Gen Z consumers like it when brands make mental health a part of their marketing. Struggles with mental health aren’t a political issue. They aren’t relegated to a certain economic sect, either. They’re a challenge that’s growing in scope and impacting the broad majority of next gens. And, frankly, they’re sick of brands and retailers pretending that nothing’s changed.

Call It Evolution or Devolution, It’s Still a Cry for Change

Who could have expected that crying on Instagram Live would generate more praise from next gens than posting edited photos? But it does. It’s a verifiable trend, as stated in LA Times even back in 2021.

The world has changed, and so have the young people that populate it. Their shorter attention spans, their need to be publicly vulnerable, their lack of social acumen, and their expectations that the brands they buy from address their issues are all indicative of this change.

Whether one feels that this is an evolution or devolution is irrelevant: it’s happening. Gen Z has never been known for being quiet or demure about the issues they face as individuals. The struggle to connect through nonverbal communication is no different. Google “mental health and social media” and you’ll see pages of studies linking social media use to depression, anxiety… even self-harm and suicidal thoughts.

What you won’t see is the proliferation of memes and social media groups dedicated to making light of highly specific mental health challenges. Social is where Gen Z goes to share their personal experiences, laugh, cry (publicly), and connect with others that feel also feel isolated in their struggles.

What Does This Mean for Retail?

In this environment, body language simply isn’t the be-all, end-all for next gens that it was for their predecessors. Raw and unfiltered self-assessment has come to replace the enhanced self-representation of older co-workers. This means that, when asked to present themselves in a professional forum, most Gen Zs aren’t quite sure what to do with their hands. Opportunity knocks. Gen Zs admittedly ask for coaching on how to present the best, authentic versions of themselves.

Also, many next gens are uncomfortable presenting the edited versions of themselves that the workforce still requires. They’d rather have open discussions about their challenges and successes. So, why are so many retailers still struggling to respond? Blue Sky thinking about the next-gen experience, is running modern retailers into the ground. Don’t assume anything. What the younger workforce needs is a safe space to share and learn from others.

Sure, it’s tempting to ignore Gen Z’s struggle to understand the basics of body language and to overlook their mental health issues. But, to do so means that a particular brand/retailer is placing itself directly at odds with the rawness and transparency that next-gen consumers so greatly respect. Training, coaching, and mentoring younger workers is critical. It’s also time for retailers to get honest and get raw. It’s time for retailers to show next gens that their company is also a bunch of people having a flawed human experience, and that’s okay.  Inclusiveness is a powerful, authentic way to bring a workforce together.

Employee retention has reached a new low. In the retail industry, frontline employee turnover has been at 60 percent for years, tying with hospitality as the vertical with the highest turnover. But today, 63 percent of frontline retail managers are thinking about quitting in the near future.

It is a whole new world now that boomers are retiring, and Gen Z has entered the skilled workforce. And Gen Z never differs from their millennial and Gen X predecessors in more ways than their career priorities. Case in point: Most Gen Z employees have a side hustle that they’re equally passionate about. Rather than the old school method of fighting for very last second of employee’s time and mental capacity, employers can help retain Gen Z talent by encouraging their side hustles and offering them resources to advance (and get more employee loyalty in the process).

When it comes to aspirational workplaces for Gen Z, Google takes the cake with 16 percent of Gen Z noting it as their #1 prospective employer. This is followed by the distant #2 with a fraction of respondents (6 percent) that want to work for the federal government and those (5 percent) that hope to work for Apple.

Sound counterintuitive? In today’s world, standing still is counterintuitive. So, let’s take a look at other factors Gen Z values in an employer, analyze where they prefer to work, and talk about how retailers can capitalize on the next gen’s unique career priorities.

What Does Gen Z Value in an Employer?

It should come as no surprise that “diversity and inclusion” are a priority for Gen Z employees. All you have to do to see how rarely companies reflect these priorities is to scroll through open job applications. How many companies offer more than two options for “Gender?” Only about a fourth take advantage of this opportunity to demonstrate inclusivity in the job application process. What about allowing job seekers to select more than one race/ethnicity in diversity questionnaires? (As a Black Irish Native American, I never appreciate being forced to choose between “White/Caucasian” or “Native American” in the dropdown menu, and “Two or more races” feels like further erasure.)

Gen Z also has more mainstream priorities. They seek opportunities for upward mobility in their careers. Financial stability is important to Gen Z because they bore firsthand witness to the financial struggles that an unforeseen pandemic can wreak upon the unprepared. Because of this, Gen Z also seeks stability from their careers and creative opportunities from their side hustles. Like millennials, it’s important to Gen Z that they work for companies that reflect their personal values. This means working for employers that are compassionate to their individual personal struggles, whether it’s a death in the family or a long-term mental health crisis.

To attract and retain Gen Z employees, retailers need to position themselves as empathetic to Gen Z’s values. For one, Gen Z is suffering from crisis fatigue, burnout from educational and social disruptions during the pandemic, and they’re becoming jaded about the climate change. According to a study by GWI, “Globally, they’re more likely than other generations to report having a mental health condition and almost 3 in 10 say they’re prone to anxiety, a higher proportion than any other age group.”

So, not surprisingly, everyone wants to work for a company that cares about them as individuals. They’re also ahead of other generations for saying they describe themselves as ambitious, money-driven, and career oriented. But Gen Z expects more from their employer in return, they’re more likely to leave a job which doesn’t meet their needs, and they feel more comfortable saying “no” in the workplace, according to the GWI study.

To demonstrate that they care about next-gen’s financial stability, retailers may consider offering small bonuses –– rather than trying to shirk them out of payment altogether –– at the onset of the next economic crisis. An inclusivity statement at the bottom of “Job Opening” pages also goes a long way. As will offering flexible work schedules for frontline employees through swappable scheduling apps that pay slightly more for less desirable shifts.

Where Does Gen Z Want to Work?

When it comes to aspirational workplaces for Gen Z, according to an Axios survey, Google takes the cake with 16 percent of Gen Z noting it as their #1 prospective employer. This is followed by the distant #2 with a fraction of respondents (6 percent) that want to work for the federal government and those (5 percent) that hope to work for Apple. “But wait,” I can hear you say, “I thought Gen Z was skeptical of ‘the man?’ How does this align with the federal government being second on this list?”

It’s true that Generation Z is highly critical of the government as it is today. But individual Gen Zers handle this skepticism in one of two ways:

1. The depressed sector throws up their hands and barely participates in politics.
2. Highly motivated members of Gen Z strive to create change from the inside.

The 6 percent that hope to work for the federal government fall into the latter category. What’s also interesting is that we’ve seen massive layoffs at technology companies in the past two years. These include: 27,000 Amazon workers, 21,000 Meta (aka Facebook) workers, 19,000 workers at Accenture, and 12,000 workers at the Gen Z favorite: Google, reported by Axios. This means Google may not be a top ranked employer for long. Since Gen Z came of age during a recession and global pandemic, it’s likely we will soon see their workplace priorities shift to reflect more reliable career paths than the always-in-flux technology sector.

Capitalizing on Gen Z’s Career Priorities

Inter-organizational mentorships are a proven strategy to keep next gen employees engaged and committed. The University of Massachusetts found that 91 percent of workers with a mentor reported being “satisfied” with their jobs. Retention rates were also 50 percent higher for workers with mentors than without. And the mentors themselves experienced a 69 percent retention rate, reporting “increased job satisfaction” and “overall career success.” Mentorships provide young talent a direct knowledge pipeline to experienced employees. The result? A visible upward trajectory for ambitious next gens, and the opportunity for seasoned employees to share their knowledge with the next generation prior to retirement.

Next gens are not impossible to please, nor are frontline employees. Frontline employees at the world’s leading retailers report being twice as motivated in their day-to-day jobs, and they leave their jobs half as often. But, for retailers to benefit from reduced turnover at every level of their organization, they first need to create an organization that inspires loyalty. The opportunity to fiscally make a living is but a small part of a larger puzzle.

What Doesn’t Work

Increased turnover is the direct result of organizations continuing to lean on archaic management styles that no longer resonate, such as: top-down management styles, inflexible schedules, a lack of systemic diversity within the organization, discouraging side hustles, indifference to employees’ professional and personal struggles, and requesting free work on a regular basis. To avoid these obstacles, companies of every size need a strong Human Resources and Diversity and Inclusion support in place.

Do you notice a common theme among the proposed initiatives in this article? They’re rooted in empathy and human compassion, which will never go out of style.

Oxford Languages (the dictionary people) defines nostalgia as “a sentimental longing or wistful affection for the past, typically for a period or place with happy personal associations.” But nostalgia isn’t relegated to time periods that we’ve personally experienced. Remember the late 60s resurgence in the early aughts? I remember scouring Woodstock DVDs for footage of my teen dream, Roger Daltrey from The Who. I also ransacked my mom’s boxes of high school mementos to resurrect a pair of vintage Levi’s cords and hot pink running shorts that she had worn her senior year.

Gen Z nostalgia is characterized by a deep longing for a simpler time. Overstimulation is the reason they want to dress and act like millennial’s did in the early aughts. But isolation is the other factor at play. Gen Z is faced with a billion choices for any given decision. There are no hard and fast rules for old questions like what to wear, what bands to listen to, or which celebrities to follow.

But there are a few key differences between millennials’ affinity for the hippie era and Gen Z’s nostalgia for millennial youth. Let’s take a look at the sobering factors contributing to Gen Z’s need for a millennial adolescence they never had and the trending retail categories emerging from it.

Why Is Gen Z So Obsessed with Millennial Childhoods?

Gen Z doesn’t have an innate affinity for avocado toast and frosty eyeshadow. Its obsession with millennial youth is the result of conditioning. But what kind of conditioning could lead an entire generation to fixate on a generation of people nearly old enough to be their parents? Millennials didn’t think Gen X was cool, with the exception of The Cranberries. Say what you want about geriatric millennials… at least we had the foresight to idealize Boomers’ hippie adolescence, rather than trying to emulate trends once worn by our parent’s work colleagues.

Gen Z nostalgia is characterized by a deep longing for a simpler time. Overstimulation is the reason they want to dress and act like we did in the early aughts. But isolation is the other factor at play. Gen Z is faced with a billion choices for any given decision. There are no hard and fast rules for old questions like what to wear, what bands to listen to, or which celebrities to follow. This phenomenon is described perfectly by mental health counselor Dr. Joanne Frederick, on the next gen publishing platform, Her Campus:

“Because there is so much information Gen Z can choose to consume, they lack the shared experiences previous generations had when everyone saw the same commercials, watched the same TV shows, or listened to the same music. Therefore, Gen Zers turn to early 00s shows, like Friends, Sex and the City, and That 70s Show, to experience life in a way that they never have, before ubiquitous social media and texting.”

Booming Categories and Those to Watch

The resurgence of digital cameras is just the beginning. While it’s true that, as Statista reports, the digital cameras market is expected to grow annually by 2.40 percent, to reach US $22.89bn this year, this wouldn’t be so fascinating if 97 percent of adults didn’t own a smartphone of some kind. Most of which are equipped with advanced photographic capabilities and filters the likes of which this millennial would’ve traded her Sublime CD for, back in the day. (To be fair, I didn’t even flinch when Urban Outfitters began selling Polaroid cameras. But digital cameras are very high investment purchases for nostalgic purposes alone.)

We’ve talked before about 90s fashion being back in full swing. The latest iteration? Shameless layering, such as t-shirts over long sleeves (à la Josh Hartnett in The Faculty), dresses over pants, and pants riding so low that you’ll pray your teen wears something else over them. Next gens aren’t just taking the fits and leaving the rest either. They’re also resurrecting old brands from a bygone era (mine, specifically) and breathing new life into once forgotten mall retailers.

Retailers Once Forgotten Are Coming for Your Market Share

Just take a look at Abercrombie & Fitch. The brand struggled to find its footing once millennials grew up to realize that the company’s whitewashed, old money aesthetic wasn’t helpful to all of the marginalized peoples who weren’t represented –– queer, differently abled, curvy, Native, Asian, Black, non-binary, non-cookie-cutter models were few and far between. Since then, however, the brand has made a 180-degree turn towards inclusive sizing and a strong digital strategy. And in 2021, Abercrombie reported its highest sales since 2014.

But Abercrombie and Hollister are far from the only early 2000s brands carving out a new life in 2023.

Juicy Couture, True Religion, and Ed Hardy have also benefitted from the 90s resurgence mixed with a strong digital-first strategy. By offering lower price points, reproducing high demand items (like Juicy Couture’s velour tracksuits, Gap’s eponymous “Gap” hoodie, and so on), and focusing on social media and AR, these legacy brands have managed to impress discerning next gen consumers.

As have the myriad kid and tween retailers of yesteryear that have now become brands: Toys R Us –– which is now a subsidiary of Macy’s, The Limited Too ­­–– which is now a brand owned by BR Brand Holding LLC, and dELiA*s ­­–– which has been sold by Dolls Kill Clothing for years. Unlike the other retailers on this list, Toys R Us is unique in that its resurgence is largely a physical store presence within Macy’s. Which wouldn’t be an issue, if Macy’s associates kept the Toys R Us section a fifth of as clean and well organized as the store that I remember from the early aughts.

Looking Forward (By Going Backward)

My suggestion for reviving brands of yesteryear? Fewer sub-par knockoffs of respected originals. Fewer dirty, Kleenex-ridden toys stuffed on brightly colored plastic in old Macy’s. (Need I remind you what happened at the “Woodstock ‘99?” Violence and vandalism, my friends.) We can’t relive the past. Our only hope is to bring that zeitgeist to new demographics in authentic ways. My suggestion? Lean in on full-fledged, nostalgia-based pop-ups where consumers from all demographics can reminisce and share experiences. More photo booths and selfie stations. More Nickelodeon characters and Play Doh. More excitement on social media.

The keyword is “fun.” Shameless, sustaining, hands-on, conversion driving fun. Gen Z wants retailers to remember how to play. So, let’s make the technicolor daydream that we call the present day worth the years of lockdown we endured.

Misinformation, vitriol, body dysmorphia…all proven results of prolonged social media use. Just because Gen Z grew up in an era of portable handheld technology doesn’t mean that they’re going to choose digital lives. While the effects of growing up inundated by social media and advertising are still largely unknown, based on the mental health issues we’re seeing with next gens so far, prospects for a utopic, technology-based future aren’t looking good.

Generation Z consumers have a long history of putting changes into action that their predecessors only dreamed of. While some next gens are heeding the call of the metaverse and moving towards digitally based living, another group is going towards the other extreme –– abandoning their cell phones and social media to reconnect with nature and themselves. A growing group of self-proclaimed Gen Z “luddites” and an international group of teen activists aren’t taking the digitization of human life lying down.

Is this a fleeting trend for next gens rooted in nostalgia for an era they’ve never experienced, or the first step in an entire generation’s return to reality? Let’s take a look.

Gen Z Is Nostalgic for a Youth They Never Had

A few years ago, millennial nostalgia was the topic du jour. The influence of the early aughts was visible everywhere, from leather jackets with Rugrats characters embellishments to Urban Outfitters peddling Caboodles and flash cameras. The retail industry had never before seen the level of Peter Pan-ism that my generation demonstrated with our wallet share. But there’s a reason they call Gen Z “millennials on steroids”–– these kids know how to take a trope and run with it.

Gen Z is also nostalgic for youth, albeit for a technologically minimalist millennial youth they never experienced. Don’t believe me? Refinery29 recently released an article titled “I’m 23 and Nostalgic for the Fictional Millennial Experience.” This goes a lot deeper than an affinity for low rise jeans and avocado toast. Gen Z sees millennial’s heyday as a “simpler time.” While at first, this may seem laughable, when you break down the reasons behind this perspective it’s actually a bit tragic.

Consider the next gen reality. The average Gen Z-er reportedly spends four or more hours on social media every day. The pandemic exacerbated this trend. Today, many Gen Z-ers are trying to become influencers on top of their daily schoolwork and extracurriculars. Hurricanes have been ravaging the nation and global warming will reach a “tipping point” in just a few years. Many members of Gen Z spent school years that were critical for their personal, intellectual, and social development in lockdown. Unlike millennials, who got to have our Dawson Creek, low rise jeans moment during our high school years. In light of this, it makes sense that Gen Z sees millennial childhoods as more wholesome and natural than what they’ve had to experience. But that doesn’t mean they don’t also have to worry about finances… quite the contrary. Student debt is at an all-time high. For this generation, the demands just don’t quit. But nobody asked Gen Z if a digital life was the world they wanted. For many, the answer is a resounding “no,” and they’re starting to take action.

Luddite Clubs Emerge in High Schools in New York

Groups of New York teenagers are surrendering their handheld devices and flocking to the parks. But they aren’t there to party, have romantic liaisons, or to do anything nefarious. Quite to the contrary: these teens’ motivations are about as innocent as you can get: They’re just there to decompress with their peers, without the constant demands of online life. The Luddite Club in Brooklyn was the first group of high schoolers, but similar clubs are being founded in other areas of New York as well.

The Luddite Club doesn’t keep in touch with one another outside of the confines of the group, so teens have to show up to stay in touch with their peers. Many attendees are avid fans of writers like Kurt Vonnegut, who tell stories condemning a technology-based future — like the one where currently living in. High school age Luddite Club members fall smack dab in the middle of Gen Z. Many fascinatingly use flip phones to communicate with their peers –– having minimized or entirely done away with their social media presences in favor of life in the present moment.

But teens aren’t the only ones concerned with how much time their generation spends on social apps that are detrimental for mental health. Students at college campuses are also taking notice and taking action, and lawmaking bodies are right behind them. It’s beginning to look the Wild West days of unregulated social media use are coming to an end.

KIDS ACT Takes it to the Courts

The Cambridge Analytica Scandal was the impetus for college students at Brown and other universities to get serious about regulating social media platforms. Both the LOG OFF Movement and Tech(nically) Politics are recently formed student groups that are amassing followings on college campuses. But, unlike high school Luddite Clubs, LOG OFF and Tech(nically) Politics are going a step further than just leaving their phones at home.

College student groups are actively rallying to change the laws regulating the liberties that social media platforms take. They’re backing legislation, such as the Kids Internet Design and Safety Act, or KIDS ACT. The KIDS ACT aims to “stop online practices such as manipulative marketing, amplification of harmful content, and damaging design features, which threaten young people online.” The bill was reintroduced by Florida senators to protect young people from being harmed by social media platforms.

Consider 2023 a period of reckoning. Gen Z will come to realize the role they play in their own indentured servitude to technology. Retailers can pivot to Gen Z nostalgia for a “simpler” millennial youth with phone free events, yoga, outdoor hikes, old fashioned photo booths, and more. What retailers need to realize is that social media is not necessarily going to be a viable future for marketing.

In 2023, many business owners will have to come to understand that it’s not social media, but what they do outside of it, that creates lasting connections with next gen consumers.

What does it take to create revolution? The answer, in part, is the willingness to buck against societal norms in ways that put one’s own comfort at risk. The generations that came before Gen Z weren’t willing to do this, largely because they were taught that conformity was king. To illustrate this, consider that 40 percent of the 1986 Yale graduating class applied to work at the same company — an investment-banking firm called “First Boston.”

But Generation Z is more interested in paving their own life path. Even if it means that, for a while, they will appear to be outliers. In fact, the entire generation seems to have come to the unanimous decision that, to make any lasting change, they’ll need to be villainized by their predecessors for a while.

Gen Z’s affinity for extreme transparency and creating change extends to their wardrobes. Just check out the surge in brands creating clothing with a mental health awareness bent. Luxury retailers are all about donating to mental health awareness in 2022. Even mid-tier brands like JanSport, Nike, Athleta and others are all aboard the mental health bandwagon.

The reason for this could be that they’re being asked to simply accept the violent extinction of the human race within their lifetime. To which their answer is a firm, resounding, “no thank you.”

Human Rights Violations of the Old Retail Guard

We’ve seen how Gen Z is willing to forego the coolness of their predecessors’ go-to brands. As a “geriatric millennial” myself, it’s been fascinating to see how the brands that the cool kids wore in high school –– Abercrombie, Pac Sun, Limited, Hollister –– have struggled to gain a foothold with discerning next-gen consumers. Yes, part of this is due to a lack of diversity in advertising. But retailers have also been bullish about clinging to suppliers using materials with severely nefarious global impacts.

Take Xinjiang Cotton. The Xinjiang region of China produces a fifth of the world’s cotton. The issue is that the Chinese government is allegedly requiring forced labor from Muslims and other minorities in the region.

Last year, the United Kingdom’s Sheffield Hallam University published a study that found that Walmart, H&M, Target, Lululemon, Uniqlo and many others were “in danger of” having cotton from Xinjiang in their finished products. In their defense, it can be hard to identify where exactly this cotton is used. But the U.S. and Canadian governments have taken extensive action to eradicate sourcing products from this region with the Canadian government going so far as to seize products from suppliers that source from Xinjiang.

Don’t Blame Gen Z for Being Discerning

Gen Z just want to be good people. And, the fact is, that the retail industry as a whole has done a lot to alienate their trust. The prior cotton sourcing example is just one of many published human rights violations still taking place in the present-day retail industry. Alongside an extensive list of humanitarian issues, many brands have also been accused of greenwashing –– or putting a spin on their operations to make their companies seem more sustainable than they are in actuality.

Nestle, Coca Cola, H&M, Uniqlo, Starbucks, Ikea, and many other brands that once seemed innocuous have recently been called out for making statements that intentionally give customers the wrong impression. Is it beginning to make sense why 22 percent of Gen Z report that a lack of transparency will reduce their opinion of brands and products?

At this point, Gen Z expects brands to try to get one over on them. That’s why brand transparency needs to start not just at the supply chain, but with manufacturing materials. They want to see every single phase of a retailer’s production process, from product idea inception to the delivery of the final sale, so that they can rest assured that no nefarious practices are being conveniently left out.

Viva la Revolution!

Reports of mental health issues have skyrocketed in recent years. Life expectancy, on the other hand, has significantly decreased. Not due to lack of access to medical coverage, but because of suicide, opioid overdose, and alcoholism. I’ve written about Gen Z’s mental health issues in the past. Here’s a quick update:

• Nearly half of Gen Z (42 percent) have experienced “depression or feelings of hopelessness.”
• Over the past 15 years, antidepressant use has increased in the United States by nearly 65 percent.
• 46 percent of Gen Z and 38 percent of millennials report being “stressed some most of the time.”
• More than 9 in 10 members of Gen Z have experienced physical health issues from stress.

Here’s the caveat –– and I promise you, it’s a good one. An increasing number of studies posit that current mental health issues may be the next generation’s response to late-stage capitalism. Now, nobody reading this article is probably socialism inclined and that’s not what I’m advocating. What I am suggesting, however, is that Gen Z is spearheading a change in the present-day consumerist ideology. Retailers ignore this at their own detriment.

I found this excerpt from a recent study on the negative impact of Neoliberal capitalism on mental health to be particularly pertinent to Gen Z purchasing behavior:

“…people driven more by extrinsic motives, meaning that they mostly do things in order to get something in return, are more likely to have shorter and less meaningful relationships than people who are driven by intrinsic motives, meaning that they do things because they enjoy them.”

Think about this quote within a capitalist framework. Next Gens aren’t purchasing items for status or to flex on their counterparts, they’re spending when they absolutely have to, when it’s enjoyable, and/or when they feel like they’re helping the world at large by doing so.

A Greater Level of Openness, for Good

Gen Z’s affinity for extreme transparency and creating change extends to their wardrobes. Just check out the surge in brands creating clothing with a mental health awareness bent. Luxury retailers are all about donating to mental health awareness in 2022. Even mid-tier brands like JanSport, Nike, Athleta and others are all aboard the mental health bandwagon.

Next-gen consumers are inarguably discerning, but they’re also forgiving and driven by the desire to create impact for the greater good. Through total transparency, quality goods production, and a willingness to speak to causes that matter to next gens, brands and retailers can continue connecting with next gen consumers… whatever may come next.

Want to see a brand that embodies every single facet of the next-gen purchasing ethos? Look no further than Collusion, the most successful brand in ASOS’ catalog. Collusion came onto the market with a bang in 2018, launching with six diverse, body and gender-positive collaborators. A new batch of creatives come on board each season to help design the clothing and promote Collusion as a whole.

The brand is currently sold exclusively on ASOS, joining ASOS’ own private label line, ASOS Design, and over 850 other brands on the fashion marketplace. Let’s take a look at how this revolutionary brand is breaking boundaries and how others are following suit.

Collusion’s success has shown us that Gen Z is putting its dollars behind its values. Until we find a way to offer sustainable goods at fast-fashion prices, Collusion still manages to get most of it right. But I maintain the hope that the brand will release an eco-conscious line that woke shoppers can shop with a clear conscience.

Saying “Yes” to Difficult Conversations

For years, I’ve been warning brands and retailers that, when it comes to social issues, the old “stay out of it” mentality does not resonate with next-gen consumers. In fact, it actively alienates them. This is hard for many legacy retailers to wrap their heads around. As is the fact is that 42 percent of millennial and Gen Z consumers said that “purpose” is the driving force when they change brands.

Millennial and Gen Z consumers are very interested in how brands address underserved communities. Collusion puts emphasis on the difficult conversations that many legacy brands still shy away from, including race, gender, ethnicity, and body positivity. The next-gen collaborators that come on each season stress the importance of having these conversations to create every single piece for the line.

Collusion has one of the strongest mission statements to appeal to next-gen consumers that I’ve ever seen, “We are driven by inclusivity, committed to collaboration, and passionate about experimentation. We champion unisex design; all our products are animal-free, and our sizing runs from 2X to 4XL. Above all, we make clothes that celebrate the people who wear them.”

With a mission statement like this, and by bringing on outspoken young advocates for the values the above statement embodies, Collusion creates the illusion of total transparency. Although ASOS’ website is still divided by gender, Collusion is not. Instead, the brand offers a bevy of affordable goods for men, women, and everyone in between. The brand is so groundbreaking in this regard that many consumers are willing to overlook the fact that Collusion has not really taken part in the ongoing sustainability dialogue.

Reconstructing the “Value” Conversation

When we say the word “value,” most retailers think about price. Collusion’s prices are definitely an asset, the brand rivals fast-fashion giants like SHEIN and Zara with prices starting at $4.03 and up to $110. This is a particularly big deal in menswear, where there are fewer fast-fashion giants to compete with on the scene. Collusion’s unisex designs are rarely figure-flattering, which is perfect for the vast majority of Gen Z-ers that care more about subverting social norms in a compelling way than showing off their pandemic bods.

Collusion hits on every almost single touchpoint that’s necessary to get next gens to convert:

• Boundary-breaking influencers
• Fashions that defy gender constructs
• Body positive/inclusive sizing
• Willingness to tackle topics that other brands shy away from
• Affordable price points
• Sustainable manufacturing
• Free of animal products
• Bright, Korean streetwear-inspired design

However, there’s one area where Collusion is falling short: ethical manufacturing. While Collusion competes with the fast-fashion bigwigs in terms of pricing, it doesn’t adequately compete when it comes to humanitarian production practices. The products are “animal-free,” which is certainly a draw for the vegan and vegetarian sector. It was even listed on a roundup by TheTrendSpotter on sustainable brands. But “animal-free materials and ethically sourced cotton” don’t give consumers any insights into the brand’s manufacturing practices.

The Bangladesh Factory collapse could just as easily have happened to workers manufacturing with sustainable materials, such as organic cotton and “animal-free” pleather. The humanitarian element, reflected in Collusion’s public face, also needs to be present for factory workers. And the company’s lack of transparency around its production processes is exactly why Good on You gives Collusion a sustainability rating of “Not Good Enough.”

To be clear: the brand is an incredible contender for the title of Next Fast-Fashion Giant but woke consumers also want to see their brands espouse living wages, tolerable working conditions, and equal opportunity employment in factories. It’s the singular arena in which Collusion has yet to step up to the plate, and it matters to consumers who want a 360-degree feel-good shopping experience. The sustainability modern consumers are seeking doesn’t end at renewable manufacturing materials –– it includes creating sustainable conditions for garment workers. Creating a production process that offers livable wages, safe working conditions, and a harassment-free environment. That’s the missing part of the Collusion equation.

A New Direction for the Retail Industry

Collusion is obviously foregoing transparent humanitarian production reports to keep prices low. But does a brand-new garment really justify a $4 price tag for young consumers to buy it? Taking this a step further, will naturally skeptical next-gen consumers become wary of price points so low that they point to anti-humanitarian manufacturing processes? These questions can’t be answered definitively with the data that is currently available. But the present-day ethos points to the fact that it’s just a matter of time before the answer to the latter to becomes a strong affirmative.

The recent surge in inclusive brands with slightly higher price points, but transparent manufacturing practices may not answer these questions, but they do point to a surge in alternative demand. Collusion’s success has shown us that Gen Z is putting its dollars behind its values. Until we find a way to offer sustainable goods at fast-fashion prices, Collusion still manages to get most of it right. But I maintain the hope that the brand will release an eco-conscious line with transparent manufacturing processes that woke shoppers can buy from with a clear conscience.

Sorry, mall-based retailers… Gen Z is just not that into you. Yet don’t take this to mean that they don’t visit your stores. Gen Z still prefers to browse online and purchase in store –– particularly when shopping for clothing. They’re also still willing to pay a premium for memorable, unique in-store experiences.

Notable variances in generational shopping behavior have emerged during the pandemic. Namely, the fact that Gen Z and millennials are more interested in connecting with brands than retailers. But brands can’t be passive in the connection process. New expectations for engagement, transparency and corporate social responsibility from brands are emerging in 2022.

With trust, transparency and sustainability at the forefront of their list of priorities, young shoppers are on trajectory to become the “millennials on steroids” they were once deemed to be. And in this environment, brands will need to reevaluate whether a top-down management style without open communication from the frontline to the C-suite is still tenable.

Does this mean that the superstar retailer –– like Macy’s in days of yore –– is soon to be a thing of the past? That depends on the brands with which they form alliances.

It’s Getting Harder for Brands to Gain Consumer Trust

Remember the call for retail transparency that came to be in the early aughts? Journalists and retail analysts alike were singing the praises of brands like Everlane, Away and Glossier. However, in the past three years, it’s emerged that the brands leading the charge on transparency aren’t all that transparent. Even companies with the most trackable supply chains have ethical disparities happening behind glass doors.

The transparency bubble burst with Everlane, a direct-to-consumer fashion business, when employees began to speak out about racism within the company. Away luggage company went through a similar reckoning, when news got out about internal bullying and a culture of overworking. And Glossier? Well, Glossier’s fortunes also turned when employees spoke out about racism and a toxic work environment. Do you see a pattern here?

Next-gen consumers are becoming disillusioned with many of the brands that paved the way with retail transparency. The truth of the matter is one can’t know how transparent a brand’s practices are until speaking to the employees themselves. Fortunately, in the age of social media, it isn’t hard for next-gen consumers to connect with a company’s employees/brand ambassadors. Particularly when they’re able to give their opinions anonymously.

Direct Connections with Brands

It’s no longer just about the retailers. It’s all about the brands. There are a few reasons for this, the first being that consumers are able to develop stronger trust in a brand’s supply chain, rather than a retailer that works with many brands. It’s too hard to verify the ethical sourcing strategy of a broad-brand catalogue. It’s also hard to emotionally connect with products from a retailer that stocks products from multiple vendors, unless we’re talking about hot ticket brands with pre-established emotional connections with consumers.

Speaking of consumers, a consumer survey by CM Group found that 23 percent of Gen Z say “authenticity” is the most important aspect of a brand. Even top-rated attributes like “design” or “social impact” can’t compete. It’s also worth noting that 22 percent of Gen Z consumers report that a lack of transparency will reduce their opinion of a brand or product.

When it comes to consumers’ perceptions of brands, the unsaid secret is “the smaller the better.” Consider that Etsy came in at number five on Gist’s list of top retailers during the 2022 holiday shopping season. This is because 75 percent of Gen Z use their smartphone to shop online. When they’re doing this, they Google each brand that interests them. Positive and negative brand press is now part of the purchasing decision. And small brands with accessible brand advocates reap the spoils.

Sustainability Means Different Things to Different Demographics

A 2022 survey by First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania found that four generations have different definitions of “sustainability.” About half of boomers (44 percent), Gen X (48 percent), and millennials (46 percent) think that “sustainability” means “products made from recycled, sustainable and natural harvested fibers and materials.”

But about half (48 percent) of the Gen Z respondents Wharton polled believe that sustainability means “sustainable manufacturing.” However, “sustainable manufacturing” could refer to a bevy of priorities, including product materials, the energy used in production, location of the manufacturer, worker treatment/pay, etc.

So, how does this add up when Gen Z favors fast fashion — which is historically the antithesis of ethical and sustainable — over department stores? The convenience of delivery isn’t something that this generation easily ignores. Yet 73 percent of Gen Z consumers are willing to pay 10 percent more for sustainable products. The key is that fast fashion retailers such as Zara and Uniqlo offer sustainable/eco conscious lines. Fast-fashion retailers also respond to trends so quickly that young consumers facing pressure to look good for social media can’t afford to ignore them.

There Is No “Back of House” Anymore

Gen Z consumers are more disillusioned than ever about the retailers that once set sustainability precedents. The fall of Everlane created a ripple effect that led Gen Z customers going even further down the research rabbit hole before hunkering down on a purchase. That is, when they take ethics into consideration with their purchasing decisions at all. They’re still young and, at times, they value looking good to their peers over shopping in a way that’s aligned with their values.

However, if their millennial predecessors are any indication, this behavior won’t last once Gen Z consumers hit college age. With trust, transparency and sustainability at the forefront of their list of priorities, young shoppers are on trajectory to become the “millennials on steroids” they were once deemed to be. And in this environment, brands will need to reevaluate whether a top-down management style without open communication from the frontline to the C-suite is still tenable.

For years we’ve talked about the 72-million strong millennial generation (born between 1981 and 1996) as the next-gen customers for luxury brands. But now there is an even younger generation on the horizon, Gen Z (born from 1997 to 2012), 67 million and counting. Note to self: immigration continues to add to their numbers.

Similar But Different

Like siblings born in the same family, millennials and Gen Z share similarities, but the greater the age difference, the greater the differences in the worlds they grew up in. Sixteen years separate the midpoints between these generations – 1988 for millennials and 2004 for Gen Z.

With the even younger Gen Z cohort on the horizon, we are tempted to carry over the aspirational consumer tag to describe them. But that would be a mistake. Intentional is a far more appropriate way to describe them.

Millennials are 26 through 41 years old this year, so they are, shockingly, beginning to reach middle age. Gen Zers are only 10 to 25 years old, some still children and the rest teens or young adults at best.

The age differences between millennials and Gen Z color their perceptions, values and consumer intent as they continue to mature in income and buying power. Gen Z is important for all consumer-facing marketers to understand, but none more so than luxury brands whose future is dependent upon attracting the spending power from the most affluent members of this cohort.

Today, Gen Z makes up about 20 percent of the luxury market, but they won’t hit their stride in the luxury market until they reach full adulthood and their incomes grow. By 2025 the millennials are projected to make up 50 percent of the luxury market – they’ll be 29 to 44 years by then. If Gen Z follows the same trajectory,it won’t be until about 2040 before they are the dominant generational cohort in luxury.

Gen Z Shapes Luxury

From my perspective as a longtime student of the luxury market, which I’ve studied for the last 20-some years, here are three observations about how Gen Z is going to shape and transform the luxury market in the years ahead — and some ideas to help luxury brands to get ready for this powerful consumer.

Think Intentional, Not Aspirational

Aspiration is programmed into our human DNA, but it expresses itself in different ways throughout our lives. For Gen Z, aspiration is about who they want to become as they grow up and what kind of world they want to live in. As people reach middle age like the millennials, their aspirational desires morph from becoming toward being. In other words, being the best they can be throughout the rest of their lives and for the future lives of their children and society.

Aspiration is a value the luxury market holds dear. Luxury brands leverage people’s embedded aspiration for the finer things in life. Sales and marketing are informed by tapping into customers’ aspirations, entitlement and “dream” fulfillment and aspiration is an important motivation for consumers no matter their level of wealth and privilege.

But in the recent past, the term “aspirational consumer” has been most closely associated with millennials. In this context, aspiration refers to the customer who has not yet reached a level of income that allows a full-on luxury lifestyle, but one high enough to permit an occasional luxury indulgence. From my perspective, that aspirational consumer label lacks specificity so I prefer a more precise term defined by their income and spending power, i.e. HENRY – high-earner-not-rich-yet. Incomes in the U.S. reach their peak between the ages of 35 and 55 years of age, where millennials are approaching and Gen Z will be in 20-odd years.

With the even younger Gen Z cohort on the horizon, we are tempted to carry over the aspirational consumer tag to describe them. But that would be a mistake. Intentional is a far more appropriate way to describe them. Intentional means “done with purpose; deliberate.”. They weigh every purchase and give careful consideration whether a particular brand is one that they want to do business with. Many more factors, besides features, benefits and price, influence their purchase decisions. Aspiration is part of it, but so are many others, like a brand’s purpose, mission and position on things that matter most to them.

And it is easy to see why Gen Z is the most intentional consumer generation. The number of choices in what to buy and how to buy them is exponentially greater for Gen Z than any generation that has come before. For example, several years ago a Harvard professor estimated that some 30,000 new consumer products are introduced each year. I’d venture to guess that number is exponentially greater now. Just count the number of new products on Etsy.

Then there has been an explosion of old products that are new to Gen Z in the resale, secondhand market. The RealReal reports it has sold 22+ million luxury items since its launch in 2010 – that’s some two million per year.

In its latest luxury study, Bain finds the secondhand luxury market reached $38 billion in 2021 making resale nearly half as large as each of the three largest categories in the personal luxury goods market – leather accessories ($71 billion), beauty ($69 billion) and apparel ($65 billion). And it grew five times faster than the firsthand market from 2017 to 2021, up 65 percent compared with 12 percent for the primary market.

Gen Z has taken to the emerging intentional consumer paradigm like a duck to water. They thoroughly enjoy the intentional purchase process: learning about products, brands, companies, what they stand for and what their friends think – all in order to find their best, most optimal choice.

For luxury brands, the most important takeaway is that for any product available, there are hundreds if not thousands of comparable products that consumers also can choose from — and most of those are less expensive. So luxury brands need to be as intentional in marketing to these new customers as they are in their purchase decision making. Luxury brands must, understand what Gen Z value most and deliver it to them. And given their young age and lifestage, their values are sure to evolve as they mature.

The Metaverse

We’ve all heard the term metaverse. Like “Alice Through the Looking Glass,” the metaverse is the fusion of the analog world and the digital; or the real world and the hyper-real virtual world. As Mark Zuckerberg said, “You can think about the metaverse as an embodied internet, where instead of just viewing content — you are in it.”

The metaverse is a strange, new world for many of us, but Gen Zers are already living in it. That shouldn’t be a surprise since this cohort has been weaned on social media, ecommerce, digital media, games and entertainment.

Gen Z has retained a childlike imagination and fused it with their own reality in the metaverse. Their experience in the real and virtual worlds is becoming seamless. Online shopping and in-store shopping are basically the same in the metaverse. In fact, Gen Z shops in virtual worlds and purchasing virtual merchandise. And with NFTs, you can buy a physical object, as well as its NFT twin.

Brands have tipped their toes in the metaverse. Balenciaga and Nike are now making real money in the metaverse. Oliver Wright, managing director for consumer goods and services at Accenture, says most CPG brands are now looking at ways to be engaged in the metaverse and trying to figure out what percentage of revenues will come from digitally-related products and services. While products for the metaverse have costs associated with design, the margins for selling digital products are much higher because they have lower associated manufacturing or distribution costs.

The metaverse is not just a marketing or branding opportunity, but something that will have real meaning to a company’s ROI and P&L statement and to Gen Z customers who live in the meta ecosystem.

Gen Z Caution: What Happens When They Grow Up?

That is a big question. Any of us who’ve reached a certain age know that the person we were at 20 is very different from the person we are at 40 or 50 or 60. The 20-something you is still there, but an older, more mature and grounded person has overtaken the impressionable, more impulsive younger you. With maturity comes a a longer-term perspective.

What was important at age 10 or 20 isn’t important at 40 as Marc and Angel Chernoff, authors of the best-selling book Getting Back to Happy, observe:

“It’s funny how we outgrow what we once thought we couldn’t live without, and then we fall in love with what we didn’t even know we wanted. Life keeps leading us on journeys we would never go on if it were up to us. Don’t be afraid. Have faith. Find the lessons. Trust the journey.”

Gen Z, like all of us, are on that happiness journey. And all the happiness psychological research proves our happiness comes not from our material possession but from the things we do and experience and through the people and relationships we experience those things with.

Material things might give us a momentary uplift and an emotional high, but that is not true, lasting happiness. This is why I say that at its core, luxury is in the happiness business.

Gen Z’s Search for Meaning

Luxury brands offer material goods that are meant to impart greater happiness through the cultural associations they impart. As such, luxury brands are infused with meaning. Symbolic values and associations make a luxury item more than the sum of its individual parts. But as luxury brands chase after more and more customers, their meaning becomes compromised.

Rejecting old ways of thinking about brands’ relationship with consumers and creating new more authentic, humanistic ways of relating is the challenge for appealing to the intentional Gen Z consumers. Founder of Meaning.Global and a leading authority on brand meaning, Dr. Martina Olbertbelieves that the implicit social contract between brands and their customers is undergoing a paradigm shift. “The consumer model as we know it is hitting its limits today as it is no longer socially and culturally aligned with what people value,” she explains.

In her new white paper ”Reimagining Consumerism as a Force For Good,” Olbert identifies a growing cultural awareness propagated by brands “to seduce consumers to fulfill their desires of material comfort and greater well-being” is leaving people unfulfilled, “trapped in a constant mode of becoming but never really getting there.” This especially relates to Gen Z who are still in the becoming stage of life. This gives luxury brands time to figure out how they can become a brand that Gen Z will truly value when they finally make it to the being lifestage. “There is a meaning gap in consumerism – a missing context of people’s lives, its effect on people and how it makes us feel,” she continues. “It goes against our own best interest, which makes the consumption model we still use today unsustainable and unfit for the future we are heading toward as humanity.”

Based on Dr. Olbert’s analysis, the traditional aspirational model used to drive more consumption – “the fear of being ‘less-than without this new something’”– must evolve to a conscious, conscientious and intentional consumption model.

The new consumer model she envisions is one where the value exchange between brands and people is measured in more than a commercial transaction. The brand must help consumers more fully realize their own human potential.

“For this, consumption needs to switch from the outcome [i.e. buy this product] to a vehicle toward an outcome,” she explains. “If we keep applying outdated ideas to new situations, we will only recreate the past. But we are not going back. We are going forward. As such, we need to look ahead and anticipate change.”

For example, many luxury brands talk about sustainability in a narrow context, using it as a badge of honor rather than what is expected for doing business in the 21st century.“Sustainability is not only a more responsible production cycle and ethically sourced materials,” she shares.

Rather, sustainability is the opposite of exploitation,“whether it’s people, natural resources, the environment, ideas, profits or rewards.” She continues, “This [exploitation] was the operating principle we inherited in business as a legacy mindset from the twentieth century.” The recent controversy surrounding alleged forced labor of Uyghurs in China’s Xinjiang province has implicated many brands, including adidas, Nike, Burberry, Puma, BMW, Apple and more.

Therefore, sustainability is “business done with consciousness and moral conscience. A sustainable business is a humanized business.” It’s about doing what is right morally and in the best interest of all brand stakeholders – consumers, employees, business partners – not just stockholders and senior executives.

“Brands have bombarded consumers with marketing messages that exploit our human aspirations and deepest desires to benefit their own revenue stream. But that value is illusory,” she reflects. “The real power for brands can be found in empowering customers to live their own authentic lives.”

Change Is Coming

The old model of aspirational luxury consumerism – I am a lesser person if I don’t have this brand – is giving way to a new consumerism model – I want this brand to become more of who I really am. It is a shift from aspiration to intention, becoming to being and Gen Z are on that journey.

The aspirational consumer model is about buying ready-made meanings imparted by the brand. The new consumption model is to help people create new meaning in and for themselves intentionally.

“The consumer narrative is shifting from brand aspiration to human well-being,” Dr. Olbert concludes. “As we enter the new era of conscious consumption, we need to create conscious commerce to satisfy our rapidly evolving human needs, values, preferences and lifestyles.”

This new more human, intentional consumerism model taking shape is still in its early stages, but it is advancing more rapidly due to the profound changes in people’s value systems brought on by the pandemic. And of all generations, Gen Z is at the forefront of this paradigm shift.