Gen Z, the generation after Millennials, values status in retail, but in a vastly different way than their predecessors. While a Tiffany & Co. bracelet was once a status symbol for young people, it seems as if today’s young consumers are shirking the high-end jewelry brand for more practical purchases.
According to a recent article in Business Insider, Tiffany announced that its global comparable sales declined 5%, on a constant exchange-rate basis, for the fourth quarter of fiscal year 2015, which included the holiday season — usually a busy time for jewelry sales.
“Our interviews with teens as well as Millennials shows that they prefer to spend money on experiences rather than stuff,” said Jason Dorsey, Gen Z and Millennial expert and President at The Center for Generational Kientics. “Besides experiences, Gen Z and Millennials both like to spend money on technology, what we would consider a small but utilitarian luxury. In fact, Gen Z, more than any other generation, said young people should get their first smartphone at age 13!”
It seems like no surprise then that Tiffany’s more classic style isn’t sticking with young consumers, who are quickly becoming accustomed to the speed, price, and trend-focused fast fashion.
Jason added, “The combination of wanting to buy experiences and technology does not bode well for expensive luxury items as they’re not very practical and once you’ve had your new piece of jewelry on a few Instagram pics and Snapchats, you can’t wear it for a long time or else it makes it look like you have nothing else to wear.”
It remains to be seen, however, if the future for Tiffany and other traditional luxury brands is truly over. As Millennials and Gen Z’ers reach different life stages, such as getting engaged, registering for a wedding, and actually accumulating enough wealth to purchase higher-end items, the tide may turn back. However, it will be up to these luxury brands to determine the best way to reach and maintain Millennial and Gen Z customers, whether that means a strong social media outreach campaign or offering a more diverse line of products.