Gen Z, Influencers, and the Luxury Fashion Industry

The goal of this research study is to examine the nature and effects of social media marketing and the role it has played towards driving Gen Z into the luxury fashion industry. In addition, qualitative exploration focused on uncovering the reason behind why this market chooses to purchase luxury products and investigated the relationship between social media influencers, luxury brands, and their consumers. Through 12 qualitative research interviews, five key insights were suggested from the results of the study: people buy luxury to fit in or stand out in social groups, social media marketing portrays a false reality, social media has contributed to the rise of Gen Z consumers in luxury fashion, social media has normalized owning luxury products, and social media has caused lowered self esteem and social pressure amongst Gen Z. These insights can be explained through a triangular framework, making up a marketing ecosystem involving the brand, the social media influencer, and the consumer. These three roles work together to buy and sell goods from one another. If one of the players fails to do their role, the relationships fall apart. Given phones and apps are highly personal items often only used by one individual, understanding and comparing the ads and images one user is exposed to versus another can be very tricky. Recently, the Federal Trade Commission has increased regulations over native advertisements when viewers became unable to decipher ad from reality. Gen Z’s may inadvertently compare themselves to influencers, ultimately causing lowered self esteem when they cannot possess or achieve the lifestyle of these individuals. These insights are important to help understand how to negate the negative effects of social media marketing and propel companies to be more transparent in their marketing initiatives to reduce social pressure and poor mental health amongst Gen Z. Luxury brands could utilize more explicit differentiators on paid advertisements compared to editorial material to make audiences more knowledgeable of the type of content they are viewing. In addition, society should change the way people perceive online content and have more open discussions surrounding the ethics of native advertising and decipection social media posts may cause. The way young users interact and process social media posts is very complex. Investigating this topic is important to prevent the possible underlying repercussions of social media and help marketers best cater toward this market in an open, ethical fashion. This study concludes with managerial applications and directions for further research. Businesses should prepare to face increasing guidelines regarding native advertising. These guidelines may include requirements to have explicit markings on branded content and binding contracts with social media influencers. To work around these restrictions, the future of luxury fashion indicates that direct to consumer strategies are on the rise. Video livestream retail and social commerce are already taking the Chinese market by storm and it's only a matter of time before American brands will be forced to adapt to keep up with changing trends in the marketplace. DTC brands benefit from having a direct channel to the consumer without interpretation or the need for intermediaries. Given this research primarily focuses on the links between the brand to influencer and influencer to consumer, future exploration could focus on the channel between the brand and consumer through direct selling. Going forward, brands may prefer to interact with their customers directly, without the use of an influencer, to help establish a close relationship with their audience through a seamless customer journey.