- Speaker #0
Picture this. You are walking through the streets of Le Marais in Paris, or maybe you're in Antwerp, Milan, or East London, and you just stop and pay attention to the people in their early 20s walking by.
- Speaker #1
You're going to notice a very specific, almost contradictory aesthetic.
- Speaker #0
Exactly. Like you'll see a 22-year-old pairing a highly coveted, beautifully tailored vintage Prada jacket with a pair of totally beat-up secondhand Adidas sneakers.
- Speaker #1
Right, right.
- Speaker #0
And they're carrying a pristine, instantly recognizable Jacquemus bag, but they're just sitting on a public bench drinking a four euro coffee.
- Speaker #1
Such a specific vibe.
- Speaker #0
It really is. And it tells a massive story about where our culture is actually heading. The old playbook of luxury, you know, this idea of total exclusivity, hyper polished aspiration, untouchable scarcity and just pure financial status. It's starting to crack under the weight of this exact scene.
- Speaker #1
Oh, absolutely. It's a fundamental shift.
- Speaker #0
So welcome to another deep dive. Today, we are exploring a massive cultural identity crisis happening right now in the luxury industry. And to make sense of all this, we are looking at the foundational research behind the Gen Z Shift.
- Speaker #1
Right. And the Gen Z Shift is this incredible initiative. It's a podcast for leaders, marketers, and really anyone trying to understand the new generation that's shaping culture, business, and society.
- Speaker #0
Yeah, it was created by Benoit van Kallenberg, the co-founder of 20-something.
- Speaker #1
And he is widely recognized as one of Europe's leading strategists on Generation Z and Generation Alpha. His whole mission is essentially to build bridges between today's boardroom leaders and tomorrow's generation.
- Speaker #0
Because honestly, right now, sitting in those boardrooms, there is a profound disconnect regarding what actually makes a product desirable.
- Speaker #1
A massive disconnect. And I think it is crucial to establish right away what is actually happening with that 22-year-old on the bench in Paris. Yeah. Generation Z and Generation Alpha are not rejecting luxury entirely.
- Speaker #0
Right. They still care deeply about it.
- Speaker #1
Exactly. In fact, they will debate the hiring and firing of creative directors at major fashion houses with the exact same intensity and analytical rigor that older generations used to reserve for tracking their stock portfolios or, you know, agonizing over sports teams.
- Speaker #0
It's wild. They know the specific quarterly sales stats of these brands. They know which creative director from 1998 inspired the hemline of a jacket released yesterday.
- Speaker #1
Yeah, so they clearly love the space. What they're rejecting is a very specific, outdated version of luxury.
- Speaker #0
They're walking away from a luxury that feels emotionally cold, culturally disconnected, or just heavily corporate.
- Speaker #1
And for century-old heritage houses, that shift in consumer psychology changes absolutely everything about how they need to operate to survive.
- Speaker #0
Well, the old luxury model was incredibly simple and, frankly, a bit blunt.
- Speaker #1
It was a totally binary system. The brand put up a heavy velvet rope, stationed an intimidating security guard at the door, and placed a single handbag in a pristine glass display case illuminated by a spotlight.
- Speaker #0
You paid a massive premium, you got to carry the bag with the interlocking logo, and suddenly everyone on the street knew you had made it.
- Speaker #1
Right. It was visible, undeniable proof of your bank account.
- Speaker #0
Okay, let's unpack this. Because this transition from the old model to the new model fundamentally alters how a brand builds value. It used to be a transactional relationship.
- Speaker #1
I give you thousands of dollars. You give me a recognizable logo that does the talking for me.
- Speaker #0
Exactly. I don't need to know anything about art or culture. I just need the money. But the research from the Gen Z shift shows this relationship is moving from an economic transaction to an emotional one.
- Speaker #1
It really is.
- Speaker #0
It's like luxury used to be an exclusive VIP club where money was the only cover charge. If you had the cash, you were in. But now it's functioning much more like a secret society.
- Speaker #1
Oh, that's a great way to put it.
- Speaker #0
The money doesn't matter if you don't know the history, the aesthetic, and the secret handshake.
- Speaker #1
And what's fascinating here is how the very definition of value has transformed into something much more complex. For younger consumers, luxury increasingly operates as a form of cultural capital.
- Speaker #0
Cultural capital.
- Speaker #1
Yeah, the value doesn't just come from owning the physical product anymore. The value comes from demonstrating that you understand what that product represents culturally.
- Speaker #0
So wearing a luxury brand today is often less important than understanding its entire universe.
- Speaker #1
Precisely.
- Speaker #0
It's a meritocracy of taste rather than just a hierarchy of wealth.
- Speaker #1
That is a brilliant way to frame it. These younger consumers are fluent in the archives. They decode obscure references from collections that came out before they were even born.
- Speaker #0
Wait, really? Before they were even born?
- Speaker #1
Oh, absolutely. They understand complex collaborations, specific silhouettes, and how those tie into incredibly niche Internet subcultures. And this explains why certain brands are absolutely dominating the cultural conversation right now, while others are just fading into the background.
- Speaker #0
Like brands capturing disproportionate attention right now, Miu Miu, Lowy, Hermes, and Jacquemus. They understand that desirability is emotional first.
- Speaker #1
Yeah, take Lowe, for example. Under Jonathan Anderson, they aren't just making pretty bags. They are making surrealist art pieces.
- Speaker #0
Oh, yeah. They make shoes that look like deflated balloons or sweaters that look like they're made of pixelated video game blocks.
- Speaker #1
Exactly. It's highly crafted, but it's also inherently memeable. It requires the wearer to be in on the joke.
- Speaker #0
Which means the desirability is emotional. It feels alive. It has a sense of humor. And it sparks a conversation.
- Speaker #1
And a standard flat logo on its own. It's completely dead to them. A young creative would much rather buy one highly meaningful, carefully selected piece from a brand whose universe they respect, and then mix it with fast fashion or vintage thrift store finds.
- Speaker #0
Because that styling shows curation.
- Speaker #1
Right. It shows they have an actual perspective. If a brand cannot create that emotional or cultural resonance, they're just slowly becoming invisible to this demographic, regardless of how much heritage they have.
- Speaker #0
Here's where it gets really interesting, though. Because if desirability isn't built by plastering a logo on a massive billboard anymore or relying on a famous fashion magazine editor to dictate what is cool, where is it actually being built?
- Speaker #1
That's the million dollar question. How do these secret societies form?
- Speaker #0
Yeah. Benoit points out that the entire purchase journey, the way a person goes from never hearing of a brand to buying a piece, has completely fragmented.
- Speaker #1
It is essentially shattered. The old luxury funnel used to be a very predictable straight line. Step one, a massive multi-million dollar advertising campaign creates aspiration. Step two, an intimidating retail store creates a sense of distance and scarcity.
- Speaker #0
Step three, purchase. Step four, status.
- Speaker #1
Exactly. But today, that journey is algorithmic, it's nonlinear, and most importantly, it is entirely driven by community. Discovery doesn't start in a glossy magazine. It starts online.
- Speaker #0
Right. It happens on TikTok, on Pinterest mood boards, deep inside highly specific Reddit threads. Or on private Discord servers.
- Speaker #1
Yeah, I mean, you have 19-year-olds on TikTok creating 20-minute video essays, breaking down the specific stitching techniques of a 1999 runway show.
- Speaker #0
It's incredible. Before a young consumer even steps foot onto the pavement outside a boutique, they already know everything. They know the references, they know the controversies, they know the specific products, and they know the entire cultural conversation surrounding your brand.
- Speaker #1
And this raises an important question about power dynamics in the modern retail landscape. Brands are no longer the sole gatekeepers of what is desirable.
- Speaker #0
The community co-creates relevance now.
- Speaker #1
Right. A viral moment orchestrated by a clever creator online can elevate a forgotten archive bag overnight. But cultural irrelevance can spread through those exact same networks just as fast.
- Speaker #0
So the new map is discovery through social media, validation through peer culture. obsessive research through mood board, maybe a physical experience, and finally purchase.
- Speaker #1
Yes. But frequently that purchase happens through e-commerce or resale platforms.
- Speaker #0
And I really want to pause on that last point about resale. Yeah. Because if you are a luxury executive looking at this behavior, I imagine you'd be terrified.
- Speaker #1
Oh, a lot of them are.
- Speaker #0
I'm going to push back on this model for a second because isn't there a massive contradiction going on here? This demographic obsesses over luxury. They study the creative directors. They build intricate mood boards. But then they vastly prefer buying these items used on platforms like Vestiaire Collective or Depop.
- Speaker #1
They do, yeah.
- Speaker #0
Doesn't that actively cannibalize the brand's actual revenue? If everyone is hunting for vintage Miu Miu online, Miu Miu isn't seeing a single dime from those secondary market transactions today. Is this just about being frugal? Or is there a strategic reason brands should care?
- Speaker #1
It is entirely strategic, and it goes far beyond just a search for a discount. For this generation, the resale economy is a fundamental tool for identity construction. When a young consumer hunts down a specific piece of vintage luxury on Best Year Collective, it feels significantly more authentic to them than walking in and buying from a hyper-commercial, mass-produced new collection. It proves you did the work.
- Speaker #0
Ah. So you didn't just casually swipe a credit card because you had a bonus. You hunted through digital archives to create a piece of fashion history.
- Speaker #1
Precisely. Authenticity has become one of the rarest, most valuable currencies in modern luxury. A vintage piece has a story, a patina of real life, which makes it feel infinitely more culturally relevant than something shiny and fresh off the factory floor.
- Speaker #0
Okay, that makes a lot of sense.
- Speaker #1
And to address your point about cannibalizing revenue, The smartest brands understand the halo effect.
- Speaker #0
The halo effect.
- Speaker #1
Yeah. The intense cultural heat generated on the secondary market creates the broader brand equity that ultimately drives primary sales. When a brand's archives are highly sought after by tastemakers, it signals to the broader market that the brand has enduring value. And that justifies the premium price of their new collections.
- Speaker #0
So the secondary market acts as the ultimate engine for relevance.
- Speaker #1
Yes, exactly.
- Speaker #0
But that brings up a massive logistical problem. If the entire discovery process, the validation, the historical research, and even the purchasing is happening online and through resale, what on earth is the point of a physical brick-and-mortar luxury store today?
- Speaker #1
That is the existential crisis facing luxury retail right now.
- Speaker #0
Right. Because if I already know exactly what I want and I've validated it with my Discord community before I even leave my house, why go in?
- Speaker #1
Because of this digital pre-validation, the physical boutique has to completely change its fundamental reason for existing. We talked about the velvet rope and the glass cases. Benoit refers to these old boutiques as temples.
- Speaker #0
Temples? Wow, yeah.
- Speaker #1
They were specifically designed to be quiet, intimidating, and emotionally distant.
- Speaker #0
You'd walk in, your footsteps would be muffled by ultra-plush carpeting. A security guard would track your every move, and a sales associate would look at you like you were lost unless you were dripping in diamonds.
- Speaker #1
Right. The architecture itself was designed to make you feel small.
- Speaker #0
Because historically, making you feel small was how the brand made itself feel big.
- Speaker #1
Spot on. That atmosphere reinforced the aspiration. But today, that exact same atmosphere just creates immediate visceral disconnection. Gen Z isn't looking to be intimidated by a sales associate.
- Speaker #0
They're looking for immersion. They want storytelling.
- Speaker #1
Exactly. If we connect this to the bigger picture, the most forward-thinking leaders in the industry realize that physical retail isn't just about maximizing sales per square meter anymore. The store itself has to function as media.
- Speaker #0
So how are they actually doing that? How do you turn a sterile temple into a media space?
- Speaker #1
You design it to be a cultural hangout. Look at what is happening in cities like Seoul, Paris, Copenhagen, and London. Brands are integrating full-service cafes. Interactive art galleries and exclusive archive exhibitions right at the front door.
- Speaker #0
They are creating non-intimidating entry points.
- Speaker #1
Yes. The best luxury stores are designed to be photographed, shared, and genuinely experienced as social environments. They aren't just places you visit to pick up a cardboard box. They are becoming the human heartbeat of the brand.
- Speaker #0
Because while algorithms are incredibly efficient at distributing your products to the right demographics, they cannot create genuine emotional memory.
- Speaker #1
Exactly. Exactly.
- Speaker #0
That makes perfect sense.
- Speaker #1
Yeah.
- Speaker #0
An algorithm can put a leather jacket on my TikTok feed 50 times a day until I finally break down and buy it. But it cannot replicate the feeling of walking into a beautifully curated, immersive space.
- Speaker #1
Right. Having a conversation with someone who understands the craft and discovering the story behind the stitching, that requires physical space. That requires a human connection.
- Speaker #0
And creating that physical, memorable, emotional connection is the new primary role of retail. The brands that understand this are using their physical footprint to build actual communities, rather than just using them as glorified distribution centers to hand over bags.
- Speaker #1
But building that community is a delicate tightrope.
- Speaker #0
Oh, for sure. You can't just throw a coffee machine in the corner of a store, hire a DJ, and claim you've built a culture.
- Speaker #1
No, absolutely not. Gen Z has a flawless, highly calibrated radar for when brands are faking it. If a brand tries to force that emotional memory without doing the actual work, they fall into a trap. And that brings us to what Benoit calls empty luxury.
- Speaker #0
Empty luxury.
- Speaker #1
It is one of the biggest, most expensive mistakes being made in corporate boardrooms today. There is this lazy assumption that younger consumers are superficial just because they are heavily engaged with fast-paced digital media.
- Speaker #0
But the reality is quite the opposite.
- Speaker #1
Because they have grown up completely saturated by marketing. They have developed an incredibly strong, almost impenetrable filter for performative branding.
- Speaker #0
We've all seen it. It's the heritage brand that suddenly tries to use gamer slang on TikTok, and it just feels like a dad crashing a high school party.
- Speaker #1
Yes. It's deeply uncomfortable for everyone involved.
- Speaker #0
Totally.
- Speaker #1
They can smell that artificiality instantly. They notice when a marketing campaign feels opportunistic rather than earned. They notice when a brand... pushes heavy sustainability messaging that, upon closer inspection, is really just artificial corporate jargon masking massive overproduction.
- Speaker #0
And most importantly, they notice when a luxury house loses its creative soul, when it becomes too polished, too corporate, and emotionally flat.
- Speaker #1
That is the exact definition of empty luxury. And they're running away from it as fast as they can. They don't reject exclusivity. They reject... emptiness.
- Speaker #0
They want brands that have a real perspective, emotional coherence, and true creative conviction.
- Speaker #1
Exactly.
- Speaker #0
So what does this all mean for the business of fashion? If a brand fails at building this genuine community and instead just tries to fake it with empty luxury, what is the actual financial fallout? Because up until now, a lot of these massive heritage groups have just been slapping higher price tags on their items to hide the fact that they are losing cultural relevance, right?
- Speaker #1
That is exactly what has been happening. And it brings us to a massive... Structural business risk that Benoit highlights, relying on crucial data from Bain and Company.
- Speaker #0
OK, what does the data say?
- Speaker #1
If you look at the period between 2019 and 2023, many luxury houses relied heavily on aggressive price increases to sustain their growth numbers. Following the pandemic, as revenge spending started to cool down, brands needed to maintain their profit margins for their quarterly earnings reports.
- Speaker #0
Sure, that makes sense from a corporate perspective.
- Speaker #1
Right. So a massive chunk of the overall market growth during that time came simply from raising the prices on existing items, not from actually expanding the customer base or selling a higher volume of goods.
- Speaker #0
Wow. So what does this all mean? You can't just endlessly hike up the price of a bag to make it seem more desirable. It's like trying to inflate a balloon that has a hole in it.
- Speaker #1
That's a perfect analogy.
- Speaker #0
You can keep blowing hot air into it, raising the prices to make the balloon look bigger for a moment, and your shareholders might be happy for a quarter or two. But eventually, the cultural equation breaks, the hole gets too big, and the aspiration just deflates entirely.
- Speaker #1
Yeah, that strategy of relentless price hikes creates the illusion of power, but in reality, it creates deep, long-term fragility. Because eventually the consumer wakes up.
- Speaker #0
Right. They look at a bag that used to cost $2,000 and now costs $4,000. And they start to aggressively question the emotional value behind it.
- Speaker #1
Is this brand actually doing anything culturally relevant or are they just squeezing me to hit a revenue target?
- Speaker #0
And Gen Z is perfectly positioned to ask that question. Because contrary to the stereotype of frivolous youth, they are incredibly financially realistic.
- Speaker #1
They absolutely have to be. This is a generation that grew up during severe global economic instability. They are dealing with unprecedented housing crises in major cities. They understand the compounding effects of inflation.
- Speaker #0
And they live in a state of constant digital overstimulation.
- Speaker #1
Exactly. Because of all those compounding factors, they are highly selective. They are deeply intentional with where they put their money. And they are becoming increasingly resistant to paying astronomical premium prices. for products that no longer feel culturally meaningful to them.
- Speaker #0
You cannot endlessly increase your prices while simultaneously decreasing your emotional relevance. The math just doesn't work.
- Speaker #1
No, it doesn't.
- Speaker #0
If you are running a brand right now, whether you are selling high fashion in Paris or B2B software in Silicon Valley, you really have to ask yourself a hard question. Are you just raising prices to hit a quarterly goal or are you... actually actively increasing your cultural relevance.
- Speaker #1
Surviving the next decade won't simply be about being the most expensive brand on the street or relying on a century of history. It will be about being the most emotionally intelligent brand.
- Speaker #0
That is a phenomenal takeaway. The future doesn't belong to the brands with the biggest archives locked away in a vault or the highest price tags on their items. It belongs to the brands that build worlds.
- Speaker #1
Yes, worlds and cultural ecosystems.
- Speaker #0
Right. Ecosystems that weave together digital culture. physical experiences, and deep emotional meaning seamlessly.
- Speaker #1
Because in a world that is totally saturated by algorithms, endless feeds of content, and infinite choices, mere visibility is no longer enough.
- Speaker #0
You can buy visibility.
- Speaker #1
Exactly. The crucial metric for a brand isn't, are people seeing us? The real existential metric is, do younger generations still feel something when they see us?
- Speaker #0
It all comes back to that feeling. It is an incredible shift from the purely transactional, to the deeply personal. And it leaves you, listening to this right now, with a pretty provocative question to ponder. If cultural capital and emotional resonance are the new driving forces of the entire industry, what happens to those massive century-old heritage brands that simply refuse to adapt?
- Speaker #1
Right, the ones that insist on keeping the heavy velvet rope up and the glass cases locked.
- Speaker #0
Exactly. Will we soon see a world where a relatively unknown, community-driven upstart Hold significantly more prestige and desire for the next generation than a classic luxury giant. Something to think about the next time you see a 22-year-old on a bench in Paris wearing a vintage Prada jacket with secondhand sneakers, drinking a four-year-old coffee.
- Speaker #1
They aren't just getting dressed. They are writing the new rules of cultural capital.
- Speaker #0
Thank you for joining us on this deep dive. We'll catch you on the next one.
