It won’t be long before Gen Z overtakes Millennials as the largest subset of the world’s population. Their values, beliefs, lifestyles, and habits are already changing the way companies do business. Last week we kicked off part one of our three-part series on how companies are changing to appeal to Gen Z. We started the series covering the financial services industry, and today we’ll be continuing the conversation with the fashion industry.
Just like with technology, the pace of change in fashion has been accelerating over time. Fashion in the 20th century changed by the decade, but prior to that it would change by the century or even longer. Now, it’s changing by the day. Millennials have had their time in the sun — Gen Z is now pushing the frontier of the fashion world. Let’s take a look at how the values, preferences, and expectations of Zoomers are forcing companies in the fashion industry to adapt.
The woke generation
Zoomers are the leaders of what has become known as “woke culture.” To be woke means to understand the history of various injustices in the world and how they continue to shape life today at a systemic level. While many associate “Wokeism” with an understanding of systemic issues around race, it also extends to having an awareness of systemic issues in the world of business, fashion included. That’s right, some of your favorite clothing brands have come under scrutiny in recent years for engaging in unethical and unsustainable business practices, such as polluting the environment and exploiting workers in underdeveloped nations (oh, say it ain’t so!).
Unlike generations before them, Zoomers choose not to turn a blind eye to unethical and unsustainable business practices in the fashion world, no matter how cute the resulting products may be. Young bloggers, influencers, and social media activists have used the power of the internet to shine a spotlight on these companies. For example, a report in 2018 titled “Labour Without Liberty” called out a number of fashion companies like Abercrombie & Fitch (ANF) for sourcing garments from factories that subject workers to less-than-ethical work conditions. Victoria’s Secret (VSCO) has been accused of a laundry list of unethical business practices over the years too. Sports apparel companies like Nike (NKE) and Adidas have also frequently been accused of the same.
The negative attention brought on these companies has led to changes and initiatives towards more sustainable and ethical behavior. In 2017, 36 of some of the world’s most iconic fashion names signed a pledge to use 100% sustainably sourced cotton by 2025. The pledge was made by companies like Burberry, Adidas, Kathmandu, and Timberland. However, many question the sincerity of these pledges and initiatives, calling them “greenwashing,” or making false or inaccurate claims about sustainability for PR purposes.
Making secondhand cool again
Gen Z has managed to turn what was once considered an embarrassment into a trend. Secondhand, or “vintage” clothing has become all the rage amongst the younger crowd. The allure of thrift shopping goes beyond just the obvious cost savings for Zoomers. Buying secondhand clothing is a way to lessen the demand for products from companies with records of unethical and unsustainable business practices. There’s also just something fun about finding hidden gems at local thrift and consignment stores (cue “Thrift Shop” by Macklemore and Ryan Lewis).
If we’ve learned anything about Gen Z, it’s that they know how to hustle. Finding the perfect bedazzled crop top or pair of ripped jeans isn’t enough. Zoomers' love for thrifting has actually spurred the growth of a digital secondhand clothing marketplace. Part social media platform, part vintage fashion exchange, Depop is a social shopping app that allows Zoomers to go thrifting without ever leaving the house.
Anyone can make an account (or shop) on Depop, but real success on the platform takes real work. Sellers are responsible for managing their inventory, coordinating shipping for their products, and offering great customer service. Shops on Depop are set up like an Instagram feed, so the best sellers usually work to curate a consistent aesthetic.
Where did Depop come from? The app was started in 2011 by European entrepreneurs and startup incubators. Depop headquarters moved to London in 2012 and has offices in other fashion hubs like Milan and New York City. In June of this year, Etsy (ETSY) announced its plans to purchase Depop for $1.6b. Etsy indicated the decision was motivated by its desire to capture more of the Gen Z market.
There’s only one speed Gen Z likes things to move at, and that’s fast. I mean “zoom” is in the name, after all, and Zoomers can’t afford to be behind the latest trends and styles. This has led to the birth of what’s known as fast fashion. In the past (boomer times), the fashion industry preferred to release new styles on a slower and orderly seasonal basis. But thanks to cheaper and faster manufacturing and shipping, the fashion world is moving quicker. This is only accelerated by the instantaneous exposure we all have to new trends on social media the moment they’re born.
One name that’s become synonymous with fast fashion is Shein. Shein is an online fashion retailer headquartered in Guangzhou, China. Since its founding in 2008, Shein has exploded in popularity among young fashionistas thanks to its low prices and savvy social media presence. Shein is famous for turning new designs into reality and getting them into the hands of consumers in a matter of days. By analyzing user trends and data in deciding what styles to produce next, Shein is able to stay one step ahead of everyone else in the fashion industry.
The last couple of years have been a defining moment of growth for Shein. In 2020, Shein sold nearly $10b worth of clothes, marking its eighth consecutive year of more than 100% revenue growth. The retailer has become one of the most talked-about brands on platforms like TikTok and YouTube and is one of the most visited fashion websites in the world. Shein was rumored to go public at some point in 2021, but that was before the Chinese government’s recent crackdown on big tech companies.