Fashion to study Generation Alpha

«It does not matter who has an income now. We do not look at it that way. We look at who will define the future». This is how John Donahoe, ceo of Nike, spoke to the company's employees at a recent meeting. «No Millennials (born between 1980 and 1995). No Gen Z (1995-2010)». Generation Alpha will be the one laying down the law and driving future industry sales, he pointed out. It is the first generation of people all born in the 21st century, that is, between 2010 and 2024. This was confirmed by experts in this MFF study on the growing liaison between fashion and Generation Alpha.

Mark McCrindle, the demographer who coined its name, estimated that, by the middle of the decade, there will be more than 2 billion young Alpha consumers. A figure that the market, especially the fashion & luxury one, is coping with by planning targeted initiatives and strategies. "It should be the largest generation ever, in a world that is experiencing the structural rise of Asia (which is also the area where most of them are located, ed.), particularly China and India," Swetha Ramachandran, investment manager and Head of Gam's Luxury Brands Equity fund, stated.

«In addition to being the largest generation so far, Alpha will also be the one with the greater purchasing power». A study by Deloitte last year showed that children begin to recognize brands and express preferences as early as age three. It is not surprising, then, that brands and labels are looking for ways to engage future consumers, to retain them through the channels in which they are most active. One of them is video games, a sector that by 2021 already represented about 66% of the size of the personal luxury goods industry on a global scale. Games offer interesting opportunities for brands to interact with younger consumers and launch trends through initiatives that are difficult to replicate in real life.

And Gucci, Balenciaga, Moncler with Fortnite, Adidas, Louis Vuitton, Valentino and many others have done it. Gen Alpha, in addition to being a digital native generation, is also the most environmentally conscious of all. «These are the reasons why fashion brands have taken action to intercept the needs and purchase choices of this consumer group. Attention to ESG issues and emissions offsets certainly represent an area of investment, as well as videogaming and NFTs» Elena Varese, Partner and co-head sector consumer Goods Food and Retail at Dla Piper, pointed out. Marco Ruffa, Head of Fashion at Luxochain, is of the same opinion, referring to an analysis presented by Salesforce on the prospects of tomorrow's consumer engagement.

«There is to consider that Gen Alpha is the most multiracial and intercultural one ever. So, they are very attentive to an overall wellbeing issue that relates to resource utilization but also to the respect for workers in the supply chain. They are also very sensitive to issues such as gender equality and racial inclusion». Maria Luigia Franceschelli, senior associate in the IP department of Hogan Lovells in Italy, continued that fashion is always looking for new targets and new business niches to explore. Until now, fashion did not seem to be interested in Gen Alpha. «Yet, in the sectors that have exploded since the pandemic, such as gaming and social media, teenagers and fashion are both undisputed players» she explained.

After all, this match was to be expected, considering that fashion brands have turned out to be trendsetters in all the fields that young people love. One example for all, the Metaverse: a new dimension in which many fashion companies have launched innovative projects, determining their success, while young people have become experts in it by experimenting with what the brands have created. «That is where perhaps Gen Alpha first came into contact with the fashion universe» Franceschelli clarified. 

This co-presence caught the attention of some brands, such as Nike, who sensed that, for a successful future, one must focus on probable future customers and that these worlds have enormous potential. They are fertile ground that brands can cultivate to get young people excited about fashion from the very beginning, investing today in engaging the customers of the future. It is the natural evolution of the fashion world's projects in modern technologies.

There is also another benefit, as the Hogan Lovells expert pointed out. Staying in touch with the future helps brands to play ahead, anticipating and capturing from the beginning the trends and needs to come. And, in the meantime, it also creates new business opportunities in an industry, such as children's fashion, that so far has seen few specialized brands. (All rights reserved)