Generation Z and its influences on the Fashion Industry. The Zalando SE Case Study.

Abstract

The purpose of this thesis is to investigate the influence of the new generation, Generation Z, on the fashion industry. With the shift towards a new generation, new variables need to be taken into consideration by businesses, since newbies represent the future customers base. Moreover, the fashion industry has intrinsic characteristics that make it an excellent environment to be analysed. Indeed, the fashion industry combines the creative and the business world. Fashion is part of the cultural and creative institution, CCI. In addition, an analysis of the influences of the past generations will show the relevancy of the research on the impact of Generation Z on today’s Fashion industry. To see how companies are practically facing and coping with the new generation, the case study of Zalando is presented. Zalando represents an excellent example within the fashion industry. Not only it represents a company that shares similar values and fashion taste with Generation Z, but also it has been proactive in adapting towards past generational shifts and has already moved towards the adjustment to Generation Z. The thesis starts with an analysis of Generation Z. Generation z include all the individual born after 1990 till today, identified by a technological variable. Indeed, social media networks (SMNs)’ takeover is a vital factor for the GenZers, who needs a continuous connection to the online community. They are responsible and have high expectation for the future; therefore, they want companies to treat them preciously with on-demand content and deliveries. Following, the fashion industry is introduced. Two are the main influences of Generation Z on the fashion industry: the gender-neutrality concept and the importance of an online existence. Gender-neutrality is not new with Generation Z, but they represent a new approach. Labels are not relevant anymore. Gender-neutrality impacts the fashion industry in two ways: by affecting the way the industry wants to show itself and also the way the inside of the industry needs to change. Indeed, the customer purchase journey has changed towards an a-gender circular journey which impacts on all the 4Ps. Products and places are agender; the promotion peruses an a-gender customer across all channels; and prices have no reasons to be different by genders. In terms of organisational consequences, few new practices have been introduced like gender-inclusive spaces; inclusive languages, the controversial gender-less bathrooms and the antidiscrimination policies. Concluding, Zalando case study is presented. The case study covers five main strategies that Zalando is carrying over. Firstly, zTypes, a new targeting method based on behavioural targeting methods and fashion. Secondly, Collabary, a tool that exploits the influencer marketing, connecting content creators to the customers’ community, reducing the gap between customers and companies. Thirdly, the beauty market extinction to the men’s market, which represents a failure because it is still gender-unbalanced. The last two points regard managerial matters. Zalando has collaborated with IDEO in order to redefine its innovation system and co-creating an innovation-driven centre in Berlin, and the welcoming of the first tweens employees. From what Zalando has achieved, it can be said that the fashion industry has listened to the new generation needs, and it has started to move towards adjustments strategy. Generation Z requires quicker responses in order to keep up with their developments, therefore the adaptation process is more complex. This is compounded by the lack of research on Generation Z.