Generation Z's Addiction to Luxury and How Hermes is Taking Advantage

GENERATION Z AND THEIR ADDICTION TO LUXURY: HOW HERMES IS TAKING ADVANTAGE
4162425-1905The world's largest and most powerful luxury companies are in a happy mood. Hermès just released their first-quarter statistics, which surpassed expectations with sales increase of 33% compared to the same quarter of 2019; the timeframe when the pandemic pushed several nations into shutdown. The brand even outperformed LVMH's 8% growth and Kering's 5 % annual growth, both of which are home to prominent brands such as Louis Vuitton and Gucci. Surprisingly, Hermès said that China and North America were the primary growth drivers for the company.00The world's largest and most powerful luxury companies are in a happy mood. Hermès just released their first-quarter statistics, which surpassed expectations with sales increase of 33% compared to the same quarter of 2019; the timeframe when the pandemic pushed several nations into shutdown. The brand even outperformed LVMH's 8% growth and Kering's 5 % annual growth, both of which are home to prominent brands such as Louis Vuitton and Gucci. Surprisingly, Hermès said that China and North America were the primary growth drivers for the company.
FOCUS ON GENERATION Z
As luxury businesses move their attention away from older, more fiscally established clients and toward those under 25, several are looking to streetwear legends for legitimacy with their new generation of fans. The market for Generation Z is fast becoming too large to ignore. According to a Bain & Company report, consumers aged 5 to 25 would more than quadruple their percentage of overall market share from 2019 to 2025, rising from 8% to 20%. And, according to Syama Meagher, owner of Scaling Retail, these customers are not like previous generations. "They may have a million dollars in crypto, but just $50 in their bank account," she explained. "How do you gain access to the new wealth?" That is the question that luxury businesses should be asking themselves right now."
According to professor Romero, it is critical that "who the [partnership] celebrity symbolizes and what they stand in reflects what the premium brand also believes in" in order to target Gen Z. She claims that as the public has paid greater attention to these issues of diversity, equality, and inclusion, luxury firms' ideals have transformed. For a generation that has grown up knowing about political correctness, streetwear's emphasis on authentic style makes the most influential figures in the industry the ideal ambassadors for showcasing legacy companies. While this may be valid for certain organizations today, underestimating Gen Z's relevance is risky and can jeopardize a brand's future. This is due to the fact that this era is, in many ways, the most discriminating bunch of customers. They are the most digitally savvy, the most well-informed, have the highest standards, and the least loyal. If a company does not recognize them as a legitimate customer group, it is most likely because they already consider the brand to be irrelevant. And, because consumer preferences are formed early in life, a Gen Zer would never opt in to a brand if it is not relevant.
How Hermes is targeting Generation Z and the Pandemic
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