Imagine a world where fashion isn't just about what you wear, but a statement of values, technology and identity. This is the future that Gen Z is crafting – a generation poised to redefine the European fashion landscape. With their strong emphasis on sustainability, inclusivity and digital innovation, Gen Z is not just influencing trends; they are setting the agenda for the entire industry. As we look to the future, it's clear that understanding the priorities and behaviours of this dynamic group will be key for any brand hoping to succeed in the rapidly evolving fashion market.
Gen Z: The new shopping power
Gen Z’s influence on the fashion industry is profound and growing. As the largest and most diverse cohort ever known with 2 billion members globally, Gen Z is a formidable force in shaping the future of consumerism. By 2028, Millennials and Gen Z will make up nearly half of the European consumer base, marking a significant shift in market dynamics. Their combined income is projected to reach $33 trillion by 2031, highlighting their economic power and the urgency for brands to understand their values and preferences.
This digital-first generation, born between the late 1990s and early 2010s, is not only tech-savvy but also deeply values authenticity, sustainability and individuality. TikTok – a platform that overtook Google as the most-visited web domain in 2021 – and Instagram are revolutionising how Gen Z discovers and interacts with fashion. While Zalando's research indicates that Pinterest and Instagram are more frequently used as starting points of inspiration than TikTok, the platform’s influence cannot be understated, especially as it has become the preferred search engine for 40% of Gen Z. This shift towards what can be termed ’TikTokification’ reflects a broader trend towards the ’trendaissance’, where micro-trends rapidly gain and lose traction, driving the need for brands to stay agile and responsive.
Gen-Z shoppers prioritise mobile-first experiences, often using their smartphones to discover, explore and purchase products.
TikTok's algorithm-driven content creates a dynamic environment where micro-trends can quickly gain traction, influencing purchasing decisions almost instantaneously.
This generation seeks more than just products – consumer insights show us that they crave experiences and stories that resonate with their values. For them, fashion is a form of self-expression, and they are keen on exploring unique styles that reflect their individuality.
Gen Z's preference for quick, engaging content has boosted short-form videos and influencer collaborations. Brands leveraging these trends can capture the attention and loyalty of this influential demographic.
It's not just about being trendy for this generation: authenticity and transparency are key. Gen Z can quickly spot inauthentic efforts, making it crucial for brands to genuinely engage with them on their terms.
As we move forward, staying attuned to these fashion and retail trends will be key to thriving in the dynamic European fashion market. For more insights and detailed strategies, watch our episode of "Business Casual" with Padmaja Bommareddy, SVP of Corporate Development at Zalando.
Social commerce and micro-trends
Social commerce is no longer just a buzzword – it has become a cornerstone of Gen Z's shopping journey, with platforms like TikTok, Instagram and Pinterest playing a pivotal role. These platforms aren't just for browsing; they are integral to the entire shopping experience, from discovery to purchase. TikTok, in particular, has emerged as a significant e-commerce player, with its TikTok Shop rapidly gaining traction globally.
In 2023, TikTok reached an estimated $20 billion in Gross Merchandise Value (GMV) worldwide, underscoring its influence in the social commerce landscape. In the US alone, TikTok's GMV was approximately $1.75 billion, while in the UK – the only live European market for TikTok Shop currently – it hit around $600 million. Notably, more than 70% of these sales were driven by beauty, fashion and lifestyle products.
This explosive growth is exemplified by beauty brand P. Louise, who recently broke the UK record for the most revenue generated on TikTok Shop, earning £1.5 million in just 12 hours. This milestone illustrates how quickly brands can capitalise on viral content and micro-trends to drive sales on social platforms.
As social commerce continues to expand, BCG predicts it will represent $45 billion of the European market by 2027, growing 14% annually. This growth will outpace overall e-commerce. Brands that quickly adapt and integrate strong social commerce strategies will be better positioned to meet the evolving needs of Gen-Z shoppers. This involves not only closely monitoring trends but also engaging with consumers in real-time to create a seamless and interactive shopping experience that resonates with this digital-native generation.
The sustainability paradox in Gen Z’s consumer preferences
While Gen Z is renowned for their commitment to sustainability and environmental responsibility, there exists a paradox fuelled by the very platforms that shape their fashion choices. WGSN has highlighted a concerning trend:
The TikTok algorithm is fuelling consumerism, which will have long-term environmental effects. While Gen Z is known to be a generation that deeply cares about the planet, their appetite for newness and clout paired with the cost of living crisis is surfacing a counter-trend, in which they're leaning into cheaper, more fleeting fashion in the pursuit of URL participation.
Upcoming sustainability regulations across Europe are set to further enforce Gen Z’s sustainability values. These regulations aim to lower the environmental impact of the fashion industry by promoting sustainable practices and reducing waste. Brands that proactively adopt these measures will not only comply with legal requirements but also gain favour with environmentally-conscious consumers. For fashion brands, embracing sustainability involves more than just green marketing. It requires a comprehensive approach to supply chain management, including the use of sustainable materials, reducing carbon emissions and ensuring ethical labour practices. Transparent communication about these efforts can build trust and loyalty among Gen Z consumers.
The rise of AI in fashion
Artificial Intelligence (AI) is transforming the fashion industry, offering innovative solutions that cater to the unique preferences and expectations of Gen Z. As generative AI continues to advance, its impact on fashion retail becomes more profound, particularly in how brands interact with consumers and manage their operations. Gen Z, known for their desire for personalised experiences and instant gratification, is driving the adoption of AI in fashion, pushing brands to innovate in ways that resonate with this tech-savvy generation. Examples of this are the following:
1. Personalised Recommendations
AI-powered recommendation systems are increasingly effective in predicting Gen Z's preferences, providing highly tailored product suggestions. By analysing purchasing history, browsing behaviour and individual preferences, AI ensures that the shopping experience is not only more relevant but also more engaging for Gen Z consumers. This level of personalisation enhances customer satisfaction and increases the likelihood of conversions.
2. Virtual Fitting Rooms
Virtual fitting rooms are revolutionising the shopping experience for Gen Z, offering a convenient and realistic way to try on clothes without visiting a physical store. These AI-driven size & fit tools allow customers to visualise how items will look and fit, reducing the uncertainty often associated with online shopping. By ensuring better-fitting purchases, virtual fitting rooms help decrease return rates and boost overall customer satisfaction.
3. Predictive Analytics and Trend Forecasting
Predictive analytics powered by AI plays a crucial role in helping Gen Z stay ahead of fashion trends. By anticipating which products will become popular, AI enables consumers to discover the latest trends and secure must-have items before they sell out. In the fast-paced world of fashion, this capability is vital for Gen Z, who value staying on top of the latest styles and keeping their wardrobes up-to-date.
4. AI-Driven Conversational Interfaces
Gen Z expects quick, efficient customer service, and AI-driven tools like chatbots and virtual assistants are perfectly suited to meet this demand. These tools offer instant support, answering queries and guiding customers through their shopping journey. By providing 24/7 assistance, chatbots ensure that Gen Z consumers feel valued and supported, creating a seamless and interactive shopping experience.
5. Visual Search Platforms
Visual search is gaining popularity among Gen Z, who prefer quick and intuitive ways to find products. AI-powered platforms like Pinterest and Google Lens allow users to search for items using images rather than text, enhancing the shopping experience by making it more visually driven. This technology aligns with Gen Z's preference for fast, efficient search methods and plays a significant role in how they discover and purchase products.
AI-driven personalisation: meeting Gen Z’s expectations
AI’s ability to offer personalised experiences at scale is particularly relevant to Gen Z, who expect brands to understand their individual tastes and preferences. With AI tools like Zalando's Fashion Assistant, brands can engage in meaningful, personalised interactions with millions of consumers simultaneously. This level of customisation not only meets Gen Z's expectations but also strengthens their connection to the brand, leading to increased loyalty and long-term customer relationships. AI is not just revolutionising the fashion industry – it's reshaping it to meet the specific needs and desires of Gen Z. By offering personalised recommendations, efficient customer service and innovative shopping tools like virtual fitting rooms and visual search, AI is helping fashion brands create more engaging, relevant and satisfying experiences for this influential generation.
Future-proofing your fashion business
In today's e-commerce landscape, where convenience is a given, quality and personalisation have become key differentiators for fashion brands. Consumers increasingly seek high-quality products and personalised shopping experiences that reflect their unique tastes and values, and this is especially true for Gen Z.
The emphasis on quality is evident in consumer spending habits. Around 60% of customers are willing to pay more for products that offer superior quality. This trend underscores the importance of providing well-crafted, durable items that meet high standards. Brands that focus on quality can build stronger customer loyalty and distinguish themselves from competitors offering mass-produced goods.
The European fashion industry is navigating a period of significant transformation driven by several factors, including the fragmented market, the rising influence of Gen Z, the importance of sustainability and advancements in AI technology. Understanding and adapting to these dynamics will help fashion brands succeed in this complex landscape.
