Generation Z and streetcreds
If you happen to have a member of the Generation Z in your family, you probably know very well what a “streetcred” is.
Unlike many forms of language created by the teenagers, which need a complex vocabulary to be understood by adults, this new one, once explained to me by my teenager nephew Giovanni, showed to be quite simple in its structure, but absolutely ingenious in its application, as it is strictly connected to fashion and luxury, subjects am particularly sensitive to.
Under the feeling of being a dinosaur who meets Steve Jobs, I invited for lunch my nephew and there I started my immersion in the fabulous world of the Generation Z.
First of all, it is important to clarify that a generation is a group of individuals, who, impacted in the same moment of their lives by all sort of revolution – social, cultural, technological or economic – have modified their set of values comparing to the previous generations: this therefore means that the best way to describe a generation is not through its age identity but through the way its individuals see their future and share their ideals.
Secondly, as i came across a lot of confusion and mistakes when fashion companies declare to be “millennials oriented”, it is important to clarify which is the exact breakdown of these generations.
7 are the definitions: the Lost Generation belongs to the end of 1800, then comes the Greatest Generation (born at the beginning of 1900), followed by the Silent Generation (born between 1920 and 1940) and the Baby Boomer (belonging to the years between 1950 and 1960). Those who were born between 1965 and 1980 form the Generation X, while the Millennials (or Generation Y) saw the light between 1980 and 1995. The teenager I invited for lunch belongs then to Generation Z, called also I-Gen or Post Millennials, in a time frame between 1995 and 2010, and is one of the most interesting group of people I have ever met.
Researches paid by big companies like Nike and Adidas, who evidently need to know everything of their main target of consumer, show that the today Generation Z counts about 2bln people on our planet, who, by 2020, will represent the 40% of the total luxury consumption. Already today in the US, they have an annual total pocket money of 44 bln and influence sales for more than 200 bln. In Italy, Generation Z counts more than 9 mln of individuals, out of which 80k are already working.
On the light of these figures that would make any head spinning, I had immediately the perception that, by interviewing my nephew, I was meeting a member of one of the most powerful portions of the modern society.
I learnt very soon that these guys, despite their immense spending power, are very selective and careful while purchasing: they grew up seeing the previous generation (the Millennials) spending more than what they were earning, thanks to the financial stability of the 90s, but then loosing jobs and careers; they have experienced already 2 global economic crisis, a violent war to terrorism (including 9/11) and therefore are more oriented to their future, have a strong entrepreneurial spirit and are less self-indulgent than the millenials and more pragmatic and disenchanted.
It is quite unusual listening all these mature explanations from the words of a teenager, but at the same time We have to take into consideration that having been exposed, since they were born, to a massive quantity of information, and having been able to low-budget-travel the planet, already in their early days to discover other cultures and religions, these individuals are way more mature than when Millennials had their same age and have learnt how to make in a very rapid way, a prior evaluation on the quality and utility of the information they need: they have a very low attention span as capable in just 8 seconds to understand if something is interesting for them or not. In the marketing dept of Nike is famous the sentence “ either you are able to catch them in 5 words, either you better change job”.
Generation Z daily uses 5 devices (smartphone, TV, tablet, laptop and desktop), they prefer videos to text or image, and only in 2017, more than 25% of them already left Facebook and even Instagram is no more corresponding to their needs, to the point that they use just the stories (which will disappear in 24 hours) instead of posting a permanent message or picture.
Comparing to the Millennials, they are incredibly obsessed with their privacy and therefore they tend to chat on apps like Secret or Whisper in order to protect their interactions with their friends. They do not drink, they do not smoke, but they adore shopping and, incredible to say, for them is very important to buy goods in physical stores instead of online, as they cherish experiences, seek for interaction, love emotional relationship and they want to be sure they possess all range of information before performing a purchase.
Even their form of payment becomes a surprise, as it leads more to off line than online, despite many retailers are still very unprepared on the subject: while for Gen X having cash in the pockets was very important, and for Gen Y the credit card was used even to pay Starbucks, the post Millennials adore digital wallets and this is another big component for those brands who want to target Gen Z, as retail sales will be strongly affected in the next five years by this new form of payment.
In actual facts, it is not so much that younger consumer have an easier time adapting to new tech and payment methods, but it is more that the phone is their portal to the world: statistics report that during the last 3 months of 2017 and the first 3 of 2018, wallet payment spend rose 114%, the number of transactions has increased 38% and the average ticket size is up 55%. By paying with digital wallet, the I-Gen can focus more on the retail experience, feels more comfortable, has a better check out dynamic and all of this will generate more engagement and repeat purchase.
So at this point, why the title of this article is this mysterious “street cred” and what does that have to do with all the above?
For such a generation, so sensitive to human relationship and to how to establish a dialogue with the other members of the same community, to the point that all messages are performed through emoji as they want to share first the emotion and then then the content, it does not come as a surprise that appearance and look is fundamental as it is a strong component for interaction.
In order to regulate what is acceptable or not to wear, despite these young guys are totally gender fluid and adore idols like Jaden (the eterosexual son of Will Smith) who attends school parties wearing a skirt, when it comes to shop clothes, things get extremely serious, as, more than in any other age period, personal affirmation in a social environment has to pass, without exceptions, through what one wears.
‘Streetcred’ therefore means street credibility or, simply, street credit. This crypto currency, has been created by the post Millennials, taking inspiration from the famous cars street credits in the US : if you are lucky enough to take a pic of an incredible car in the street, you can collect a specific score which can be increased by taking more pictures of more incredible cars, generating a consequent competition among the teenagers.
What in the old continent street credit (stc) measures instead is your level of coolness in building a look, summing up a specific number of points given to very precise items or brands.
The camu sweater of Off-White? 1200 stc! Blue Stone Island waterproof jacket? 800 stc! Versace underwear with logo elastic band? 1500 stc. Pharrell Williams sneakers for Chanel? 13.000 stc.
The everyday level of acceptance, interaction, credibility of these young individuals is dictated by a form of fashionable stock exchange market, which, on one side is dangerously capable to destroy the self confidence of a teen ager but, if looked from another angle, as dangerously can have the power of destroying a group of products or even a brand.
Adidas, is for example a good case to mention. As reported by Vikram Alexei Kansara in his article of Sept. 2017: ”2014 was a particularly tough year for Adidas: revenues linked to the World Cup should have increased sales, especially as the Adidas-sponsored German team won the tournament for the fourth time. Instead, two weeks after the final, the company issued a profit warning and walked back from its 2015 goal. The stock price plunged by 16 percent and by the end of the year, Adidas had dropped to third place in the US market, falling behind Under Armour”. At that time, for a teenager, wearing a pair of Adidas not only wasn’t generating any stc but could even revoke the points of other successful items worn in the same outfit.
One year later, Adidas presented a very ambitious and powerful relaunch plan called “ Open Source” : it refers to a new operating principle rooted in openness and collaboration. Adidas has applied “Open Source” both internally and with external suppliers, from manufacturing partners to advertising agencies. But the principle has been most visibly — and successfully — put into practice in the way the brand collaborates with creators like Kanye West.
Since then Adidas has opened up to an army of collaborators from Pharrell to American artist Daniel Arsham and artisanal Japanese sneaker label Hender Scheme. Then, there’s Raf Simons, Rick Owens, Alexander Wang, Gosha Rubchinskiy, not to mention the longstanding collaborations with Yohji Yamamoto and Stella McCartney.
The creation of such amazing partnerships did not pass un-noticed by the smart members of the Generation Z, who started re-promoting the brand to the point that now even a pair of Stan Smith can give you a reasonable score of 1000 stc if you wear them.
The existence of this incredible hidden social way of categorizing products, brands and fashion completely amazed me and knocked me out.
Imagine if one could really develop a method of monitoring and studying the stc rating and create a democratic official platform where the 2 bln of I-Gen members can share and officializzare their perception of any product on the market which has the Z as a target.
Imagine if whatever you wear, regardless its retail price or aspect, could immediately have a stc value which could make the item even more valuable than what the price suggests: it will probably last only a couple of years, as new generations will have in the meanwhile digested it and found new idols, but still this might be a very interesting information for those brands who are in the need of quickly cashing out from the young generations.
When Mr Arnauld hired Virgil Abloh as creative designer of Vuitton man, I immediately thought that, behind the scenes, LVMH had secretly developed a streetcred platform, aiming to increase the stc rating of its logo items, but then, after a quick check, I discovered that the web domain www.streetcred.com can be still purchased at 70usd and the “streetcred” logo in the apparel&accessories categories is still available to be registered in the EU for just around 1.100€.
If while finishing reading this article you already have your hand on the phone to put in place what I suggested you above, remember to act very rapidly as already a new generation is at the door: they were born after 2010, they are called Generation Alpha or screen-agers as, since their early days, they were carried around in a stroller with ipad holder. They are just 8 years old now, but are already governing the cartoons list on Netflix and are expert advisors in the Lego HQ in Denmark.
See now, but wear when?
Cruise, pre-collection, resort, buy-now-wear-now: these are just part of the increasingly complex vocabulary used by fashion industry insiders, united in a cause that is more and more becoming challenging and almost impossible: satisfy the modern consumer.
These are words that help to distinguish what’s available by delivery date, price point, purchasing power, habits and the need of an ever-more-complex public, which is on one hand, becoming extremely demanding, and on the other hand, capable of devouring any commercial fashion offer at the speed of light, making it obsolete and outdated in less than six months.
As we could see, this has also created a huge crisis at the top echelon of the best fashion houses for over two years now, turning over managers, changing creative directors, and making huge investments in the digital and line stretching, trying to increase the speed of response of fashion to a schizophrenic consumption. In addition, what we’re witnessing is also a wide-spread creative anarchy: a consumer model that has been around for 50 years is at its end and probably (and may be, finally?) crumbling, like the inevitable downfall of a once-stable government.
Absolute confusion is just a matter of time: brands are presenting their menswear collection on the same runway as womenswear while others are doing the exact opposite. Some ready-to-wear brands have opted to show during the Haute Couture Week (like Proenza Schouler and Rodarte, dangerously confusing intermediate customers with final consumers), while others make sure that runway products arrive in store the day after the show – with the also obsolete “see now, buy now” approach -, instead of the usual four or five months. Whatever a brand chooses to do, anything goes, and it’s just chaos.
In all this confusion, it’s not for sure the final consumer the victim of all this complicate fashion strategy, but insiders and retailers who have to quickly make sense of the current state of anarchy and adapt them selves, not without great difficulty, to a new era.
Meanwhile, the end customer sounds very content: in fact, he doesn’t care if a dress is from a resort or a runway collection; if it is from the spring or winter collection. He just wants to be able to mix Hermès with Zara without losing social prestige, but all the while making a culturally and stylistically conscious, independent choice: he wants to buy cashmere in the summer, swim trunks in the winter, and be able to buy all these goods as comfortably during a walk outdoor as seated in front of his tablet at home.
While this consumer behaviour is reducing sales at physical stores, the real trend has already revealed itself since a while: nowadays it seems that either you go for multichannel either you collapse under a prehistoric retail model. According in fact to what many brands have already experienced, multichannel does not mean only a coherent image and integrated services upon delivery, but above all the possibility of a constant recognition of the client’s privileged status of consumer, no matter where the purchase is performed.
We everyday read in the news about mono-brand retail experiencing a drop in traffic and sales, caused mostly by unsatisfactory shopping experiences and outdated assortments, but still, I am convinced it can remain the core of an increasingly dynamic purchasing process: if the statistics are correct about 61% of all luxury purchases being influenced by digital (peaking at 72% in the U.S), we have a light at the end of the tunnel if we are able to redirect to off line, a strong redemption of what invested online.
Ever since Fall/Winter 2014, Vetements’ debut collection on the Parisian catwalk, the world of fashion has been violently turned upside down by this brand, rich of explicit references to the underground culture, which offers an oversized and deconstructed silhouette, very close to the look and physicality of the new consumer who sees himself now as an individual and no more as a model. Over the course of just a few seasons, the label has become a religion: it has absorbed street style trends to create an image so strong that it has become a global cultural model.
On the other hand, and almost at the same time, also Off-White’s success starts its creative miracle through a match: Virgil Abloh, ex Kanye West’s designer for his clothing lines, meets Claudio Antonioli, renowned trend-hunter and godfather of hits like Marcelo Burlon or Palm Angels.
Since the first season of this lucky relationship, it has been clear for all fashion system that Off-White is one of those brands that is able to truly bridge streetwear and high fashion, with luxury collection prices, but with materials and silhouettes inspired by the street, all packaged in a very recognisable image, such as the diagonal white stripes that look like the pedestrian crossing. In this way, we can definitely state that Abloh has incredibly created what the studious and designer Raymond Loewy already in 1950 used to call “the Most Advanced Yet Acceptable”.
So why Gwasalia and Abloh are often mentioned to be such genius? Probably because they have been intelligent enough to anticipate the fashion world’s point of no return, in a dark moment of total loss of interest in a system where products do not reflect customers needs anymore, due also to the lack of creativity of many brands now on the market. Vetements and Off-White have come out winning not just for their own merit but also for the demerit of their competitors, creating a very rare and genuine magic: recalling the visions of the famous writer Derek Thompson, Demna and Virgil have created something that fills the void between our neophilia and neophobia, and therefore, between our desire for the new and our fear of the new.
But has this battle really been won both creatively and statistically, or was just a lucky shot in the dark, destined to be a bright but soon falling comet?
After just a few seasons all retailers are already giving clear signals about these two brands losing a bit of their brightness, as now only cobranded product like Off-White/Nike or Vetements/Rebook still seem to appeal the customers. On the contrary no retailers have already answered the most difficult question: is all of this just the brand’s fault or is the consumer to be bored by too much offer and product push?
Now the real question is: buy now, but wear when?
Oh yes, because with so much to choose from, that old saying from the 80s “create a desire in the consumer and then prepare to satisfy it” doesn’t work anymore. The desire for luxury and purchasing power are polarising, with numbers that remind us this effect every day: according to recent analyses by major watchdogs in luxury, 415 million high-end consumers spent 860 billion euro in 2017 alone. The total number of consumers is expected to increase to 490 million by the year 2023, spending 1.185 billion: 30% of total consumption directly attributable to the 4% of luxury consumers.
Strangely enough and despite all the analytics above, if we take a walk down the shopping streets, it still seem that luxury is for everyone: the swelling aspirational population of many emerging countries is asserting itself as new brand consumers, cancelling and diluting that exclusivity component, once essential for the traditional customers of luxury. According to a recent study among rich Chinese, Louis Vuitton seems now to be considered, in a very snobbish way, a “brand for secretaries” and Tiffany’s daily top seller category is the 120usd silver bracelet, instead of selling diamonds. Many brands, such as Dolce & Gabbana and Moschino, no longer have advertising campaigns or communication strategies targeting sophisticated interlocutors nor high spenders, but create dialogues with millennials and clients seeking a certain status or a way to display a newly acquired wellness.
So, what happens to a good part of those customers who can no longer find something exclusive or chic enough to reflect themselves? They started turning to haute couture and bespoke: all men’s brands, whether casual or formal, have a made-to-measure or bespoke section for their best clients, and many women’s luxury labels are complementing their ready-to-wear collection with a wide variety of “demi-couture” or “haute couture” so they can cater to the clients who have become orphans of real luxury products.
Those who went to the Paris Haute Couture week last January, clearly saw that not only Paris had become the only truly undisputed home of luxury fashion, but also that the front row of the shows is no longer occupied by the “Annas” (from Wintour to Dello Russo), but by actual customers – the sophisticated and elegant top spenders responsible for 27% of the total spending and 90% of the growth in luxury consumption.
They are now the ones who sit at the fashion shows, they are the ones – by buying or not buying the pieces seen at the runway – who decide the success or failure of a designer, they are the ones – having none other than a wealth of means – who can afford to be the unbiased judges of fashion, ridding off all middlemen in one fell swoop, from retailers to the press, who have until now been their eyes and ears, deciding what people should buy and should wear.
Probably, under this new light, there is a coming era for luxury democracy, for a meritocracy, and this “see now buy now” might take on a new and perhaps true meaning: I see and I buy. Now. Maybe. If it excites me.
Alessandro Maria Ferreri is the CEO of The Style Gate
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