A proposed segmentation of Gen Z consumers
The fashion industry is among those with the highest impact on the environment and social context. The call for sustainability has led to the rise of alternative modes of consumption, such as second-hand shopping and rental commerce, through which the actors of the industry try to integrate sustainability into their business models. Consumers enthusiastically welcomed these innovations, and most of all those belonging to the Generation Z that is also known as the green generation for their interest and commitment with sustainable initiatives. Yet, sustainable consciousness is not the only purchasing driver that leads these consumers towards sustainable fashion, rather several drivers have been identified. The purpose of the research is to explore the Generation Z segment and delve into their motivations, proposing a segmentation that is based on their approach. A cluster analysis has been performed on 202 consumers, leading to the identification of four main segments: the eco-drivers, the explorers, the trendy-lovers and the unique.
Research objective. In recent decades, the fashion industry has seen an exponential increase in production quantities, coupled with a reduction in the life cycle of clothing. According to EU (2019), the amount of clothes bought per person has increased by 40 % in just a few decades, with clothing accounting for between 2 % and 10 % of the environmental impact consumption. Consumers now buy more clothes than ever before, about 60 pieces per year, of which 40% are never or rarely worn. The fashion industry, like many others, is increasingly called upon to face the issue of sustainability, taking responsibility for its often-incorrect behavior towards climate change and excessive consumption of natural resources due to its production and marketing strategies.
The call for sustainability has led to the rise of alternative modes of consumption in the fashion industry, born out of the efforts of companies in the sector to integrate sustainability into their business models. This innovation brings significant benefits to businesses, as technological advancements, infrastructure improvements, emerging startups, changes in consumer preferences, new circular design practices, along with increasing regulatory pressure, are creating a favorable environment for established retailers to confidently pursue circular economy initiatives.
Positive feedback also comes from consumers. In recent years, sectors such as second-hand and vintage have seen a significant increase in annual revenue from clothing and accessory purchases. According to ThredUp, in 2019 the second-hand luxury market was worth $25 billion, with a prediction of high growth in 2022. Such expectations have been greatly exceeded, as these sectors have had significant growth, especially with regard to emerging target groups such as younger generations. The circular economy is spreading because customers are more incline to choose sustainable practices and are more aware of new business models.
A very promising segment is represented by the so-called Generation Z, which today is considered one of the targets with the most potential along with that of Millennials. According to the US Census Bureau and the Pew Research Center, the members of this generational cohort are the individuals born between 1997-2012, and they have been defined as more inclined to environmental issues and sustainable practices.
The outlined scenario led the authors to develop a research that arose from the connection of several elements. Alternative modes of fashion consumption are emerging to meet the requirements of sustainability that consumers are increasingly demanding. This is particularly true for Generation Z, which has been largely defined as greener compared to older generations. Yet, sustainable consciousness is not the only purchasing driver that leads these young consumers towards sustainable fashion. The purpose of the research, therefore, is to explore the Generation Z segment and delve into their motivations for turning to rental commerce, second-hand, and vintage products, proposing a segmentation that is based on their approach.
In this way, the research goes a step further compared to studies where the main goal is to identify the key purchasing drivers. The focus is on the way these drivers actually coexist and can determine the emergence of specific subgroups of consumers.
A web-based questionnaire was developed using Google Forms and sent through social media platforms to Gen Zers born between 1997 and 2004, to ensure that respondents were over 18 years old. The questionnaire was divided into four main sections. The first three sections presented the same set of questions, applied respectively to rental commerce, second-hand, and vintage items. In this way, the drivers were investigated in relation to each form of consumption separately. Each section began with a definition of the consumption form under investigation to facilitate the respondents understanding of the questions. Following this, there were some questions on frequency and usage mode, useful to better frame the purchasing trends. The questionnaire items were identified in the literature (see Table 1) and measured using a Likert scale ranging from 1 to 5 (1= completely disagree, 5= completely agree).
Table 1. Questionnaire items
[SF] helps to save natural resources (S1)
[SF] is a sustainable consumption mode (S2)
[SF] is eco-friendly (S3)
Hamari et al., 2016
I can afford more clothes because I pay less when [SF] (Ec1)
With [SF], I feel like I'm paying a fair price for clothes (Ec2)
I don't want to pay more for a piece of clothing just because it's new (Ec3)
Guiot et al., 2010
[SF] allows me to express my individuality (U1)
[SF] items allow me to create a distinctive personal image (U2)
I hope to come across items that no one else has (U3)
Padmavathya et al., 2019
[SF] allows me to belong to a group of people with similar interests (Ex1)
Using the products makes me feel part of a community (Ex2)
[SF] is a good way to meet new people (Ex3)
Minami et al., 2021
[SF] are reliable in their performance (Q1)
I like the design of [SF]products (Q2)
[SF] have high quality standards (Q3)
Gokhale et al., 2020
[SF] increases the ease of use in my purchasing ability (A1)
[SF] helps me buy what I want from a wide range of available products (A2)
[SF] increases the ease of use in my purchasing ability (A3)
Padmavathya et al., 2019
Source: Authors’ elaboration
The last section concerns the socio-demographic data of the respondent, including age, gender, education level, occupation, and geographic origin.
Collected data have been processed using a hierarchical cluster analysis. Since the research aims to propose a segmentation of Generation Z consumers, this methodology has been selected because it allows for the construction of distinct groups of subjects grouped together through certain characteristics (Blashfield et al., 1978). The analysis was performed using SPSS software. Due to the high number of variables and the output of the bivariate correlation analysis, a principal component analysis was carried out, resulting in 12 main variables (instead of 67) that could explain the overall variability across the cases. The k-means clustering technique was then applied, showing a 4-cluster solution as the best option. This choice was further confirmed by the analysis of the iteration history, the ANOVA test, and the numerical distribution of cases across the clusters.
The presented results refer to the analysis carried out on the data collected so far. However, the survey is still ongoing to increase the number of questionnaire respondents. To date, the research has been conducted on 202 people, of which the majority are women (87.6%). 83.7% is between the ages of 22 and 25, while the remaining part belongs to the 18-21 age group. 47.5% of respondents has a bachelor’s degree, while 30.2% has a high school diploma and 22.3% has a Master's degree.
Questions about shopping habits revealed that more than half of respondents goes to second-hand markets or shops more than once per month, or more than once per year. Vintage markets emerged as being less attended, with a notable percentage of respondents stating they have never attended any. The lowest levels of usage were those concerning rental commerce, with 96% saying they have never used it.
Regarding the identified clusters, what emerges is that the 202 respondents can be classified into 4 groups, which have been named based on their characteristics: eco-savers, explorers, trend lovers, and unique. Their main features will be outlined in the next paragraphs.
Eco-savers. This cluster is composed of 28 cases (14%) and it is the cluster with the highest number of men. What characterizes this cluster the most is its orientation towards sustainability and economic savings. Eco-savers mainly purchase in physical stores and show the least use of e-commerce apps and sites compared to the other clusters. In their approach to the three forms of sustainable fashion proposed, attention to the environment is confirmed to be the most important driver. Alongside, the desire to achieve economic savings emerges, translating into a low purchase of vintage products, where the price level is sometimes higher than the other forms of consumption. The search for a distinct identity from the group or the desire to belong to a specific social class appear to be irrelevant as motivations for purchasing. Eco-savers are educated individuals who are aware of the changes that have occurred in contemporary times, and for this reason, their attitude is proactive, activist, and evidently rational during purchases.
Explorers. This is the largest cluster, consisting of 71 cases (35%) with the highest level of education among the groups (26.8% holding a master's degree). Explorers are oriented towards innovation and exploration of new worlds through purchasing practices that can also have experiential value. The data shows a clear preference for online purchases (38%) and the use of second-hand platforms on a weekly basis (20%). From this point of view, the cluster stands out as being more technologically advanced than the others. Explorers agree that buying online allows for better purchasing productivity and the ability to choose from a wider range of products. Another characteristic element is the experiential factor, as members of the cluster use these forms of purchasing to connect with communities of people who share a common passion. The act of purchasing becomes a means to explore new territories, grasp rapidly developing trends, and experiment new perspectives.
Trend lovers. This cluster is also quite populous, with 70 respondents (34%). Individuals included express a preference for physical stores, in some cases preceded by online research, and have a lower rate of use of e-commerce sites and apps compared to other clusters. The elements that characterize trend lovers refer to uniqueness and attention to brand attributes such as quality and design. The predominantly female subjects belonging to this group have an attitude towards trends, are attracted to the brand, and prefer signed objects that can testify to a certain status. They seek objects with high standards alongside a trendy aspect in line with emerging fashions. One aspect that emerges is the desire to use sustainable fashion to fit in with social groups.
Unique. This cluster, consisting of 33 cases (17%), is the youngest among the identified groups, with most respondents between 18 and 21 years old, and, consistently, the lowest level of education. In this cluster as well, the preferred mode of purchase is physical stores and it is characterized by the highest attendance at vintage and second-hand markets and shops which are visited several times per month. The unique express their desire to feel unique using these forms of purchase, to cater to their desire for sophistication and to find a style that expresses their identity.
In the preceding paragraphs, the distinctive characteristics of the four identified clusters were exposed, distinguishing attitudes, preferences, and approaches to certain buying models. The emerged clusters allow a market segmentation of sustainable fashion related to Generation Z. The first cluster represents an emblematic profile of today's society, made up of activists who dominate a significant portion of the younger population. Attention to waste, economic and environmental resources are all determining factors that enhance the behavioral habits of this emerging target. In this cluster, the role of sustainability as a predictor for the formation of attitudes and behavioral intentions towards collaborative consumption is confirmed, leading the young consumer to distance themselves from the consumption system (Hamari et al., 2016; Ek Styven et al., 2020). It is surprising to see how environmental sensitivity accompanies a propensity for savings in this cluster, as these elements are often identified as opposing. Most of Generation Z does not have the necessary means to lead a completely autonomous lifestyle, and for this reason, pre-loved shopping is identified as an ideal alternative (Guiot and Roux, 2010).
The second cluster represents the figure of a young person in search of new stimuli, guided by an instinct for curiosity and innovation. The focus on the approach to technology characterizes Generation Z, also defined as a generation of digital natives, constantly connected and tied to technological tools. Companies in the second-hand and rental sector are often entirely online, and for this reason, they perfectly respond to the Gen Z shopping idea. Furthermore, the online environment has allowed the construction of an increasingly global network of users on such platforms, a mode that is impossible to replicate in an exclusively physical context. The technological element reinforces the perceived usefulness for consumers, allowing the purchase of products at any time (Kollmann et al., 2012; Padmavathya et al., 2019).
The third cluster reflects a profile that is constantly imitating new trends, widely encouraged by social media. Intrinsic social and community motivations are central to new exchange methods (Botsman & Rogers, 2010), reflecting the social value of consumers (Gassenheimer et al., 1998), that is, the perceived potential for creating and developing social connections with others. There is a renewed belief in the importance of the community, where markets are more community-based, and interactions between individuals are appreciated (Minami et al., 2021). Belonging to the community or aspiring to be part of it, is a determining factor for practicing sharing or collaborative consumption activities (Mohlmann, 2015), and this is in line with the principles of Gen Z, defined as particularly oriented towards creating communities and groups. The weight given to the role of the brand also combines with attention to quality, important for Gen Z, as it allows to extend the life of a product and to benefit from it for a longer period (Machado et al., 2019).
The last group depicts a reality of younger individuals who declare themselves detached from conventional concepts and building their identity as a reflection of inner well-being (Tian et al., 2001). Uniqueness is one of the aspects that has been extensively studied in the vintage and second-hand sector, on the one hand because consumption allows individuals to express their individuality (Paul et al., 2016), and on the other hand because of the rare and scarce products that can be found in non-traditional second-hand platform to integrate self-uniqueness (Padmavathya et al., 2019). The purchase of vintage or luxury goods can indeed be positively influenced by the need for uniqueness, as they are rare, distinctive, and aligned with the purchasing choices of non-traditional consumers (Keim et al., 2019). The Generation Z strongly perceives the need to seek diversity as a means to express themselves. As highlighted in the Depop X Bain & Company report, this search is often expressed using vintage and second-hand clothing where brand plays a secondary role to the potential for distinction.
The originality of this research, compared to existing literature, is twofold and concerns both the purchasing drivers and the sustainable fashion business models. Regarding the former, the aim of this research is to investigate the purchase motivations that drive Generation Z towards sustainable fashion, not focusing on individual drivers, which have already been extensively covered in literature, but studying their multifaceted nature and how they coexist in the construction of profiles. Concerning the latter, the research takes on a broader scope, focusing on three different forms of sustainable fashion, rental commerce, second-hand, and vintage markets, while at the same time focusing on a narrower target audience. These elements make the research academically relevant as they add to the existing body of knowledge. The managerial implications are also evident in the research output, where the identified clusters can be adopted as market segments to better tailor strategies to reach the desired market.
sustainable fashion, generation Z, cluster analysis, behavior analysis, collaborative consumption
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