{"id":1616924,"date":"2022-08-19T18:08:33","date_gmt":"2022-08-19T22:08:33","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1616924"},"modified":"2022-08-19T18:08:52","modified_gmt":"2022-08-19T22:08:52","slug":"luxury-sneakers-may-be-a-step-too-far-for-cash-strapped-gen-z","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/luxury-sneakers-may-be-a-step-too-far-for-cash-strapped-gen-z\/","title":{"rendered":"Luxury sneakers may be a step too far for cash-strapped Gen Z"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">24<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fluxury-sneakers-may-be-a-step-too-far-for-cash-strapped-gen-z%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1616924&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>By Casey Hall and Mimosa Spencer<\/p>\n<p>SHANGHAI\/PARIS (Reuters) \u2013     From $300 bucket hats to $900 sneakers and $700 t-shirts, the high-flying luxury sector is fretting over the appetite among financially stretched Gen Z consumers for such \u201caspirational\u201d purchases.<\/p>\n<p>Executives are troubled in particular by a hit to young Chinese shoppers, not only because mainland China has been a major driver of the industry\u2019s growth in recent years, but also because high end consumers in the world\u2019s second-largest economy are a decade younger than the global average of 38.<\/p>\n<p>Young adults around the world have been \u201ca very strong factor of luxury growth over the past decade,\u201d said Gregory Boutte, chief client and digital officer at Gucci-owner Kering.<\/p>\n<p>Data this week showed China\u2019s economy slowed unexpectedly, prompting a central bank rate cut, while macroeconomic trends are disproportionately impacting the extra funds that those born between 1996 and 2012 might use to enter the world of luxury.<\/p>\n<p>Whereas in North America and Europe, inflation and a rising cost-of-living are hitting discretionary incomes of young consumers especially hard, China\u2019s problem is different.<\/p>\n<p>\u201cIn the U.S., inflation is a huge issue, the major focus of a lot of luxury companies \u2026 In China, it\u2019s the youth unemployment rate that\u2019s alarming right now,\u201d Kenneth Chow, principal at consultancy Oliver Wyman said.<\/p>\n<p>Government data for July registers the unemployment rate of China\u2019s urban population aged 16 to 24 at a record 19.9%, exacerbated by the impact of COVID-19 lockdowns and a crackdown on big tech firms that traditionally hired droves of graduates.<\/p>\n<p>\u201cThis might be the first time that a lot of young adults (in China) are facing (such an) economic impact, so it will be a testing ground on how these consumers are going to spend on luxury items going forward,\u201d Chow said.<\/p>\n<p>\u201cIf a recession happens, then I will 100% buy less or maybe even stop buying altogether,\u201d said U.S.-based luxury lifestyle and travel TikToker Jeffrey Huang, 28, who shares his Louis Vuitton shopping trips and hauls with his 150,000 followers.<\/p>\n<p>A recent Oliver Wyman study showed that some luxury brands are significantly lowering their sales expectations for the Chinese market in response to current conditions, with 80% of executives questioned not expecting a \u201cv-shaped\u201d recovery this year. Oliver Wyman declined to name the brands it surveyed. <\/p>\n<p>Nevertheless, earnings last month from firms including LVMH and Kering painted a picture of resilience in the face of economic headwinds, with luxury players riding a wave of post-COVID spending by their wealthiest clients.<\/p>\n<p>And big brands have signaled their intention to grow top end sales of $10,000 handbags and $5,000 coats rather than focus on attracting new entrants onto the bottom rung of the ladder.<\/p>\n<p>Chanel, Louis Vuitton and Dior have raised prices on high-margin leather goods several times over the past year, with Chanel planning stores dedicated to VIP consumers.<\/p>\n<p>\u201cAs the prices are rising, I\u2019m becoming more and more cautious because I feel like I did do a good amount of spending in the last year,\u201d said Sara Yogi, a 26-year-old San Francisco, California resident, adding that she may hold off buying a $2,900 Prada bag and one costing $3,200 from Bottega Veneta which are both on her wish list.<\/p>\n<p>This shift to focus on core luxury consumers also encompasses a cohort of wealthy Gen Z consumers less likely to be impacted by inflation or unemployment. <\/p>\n<p>But the concern is over would-be buyers who were meant to help Gen Z account for a fifth of all spending in the luxury goods sector globally by 2025.<\/p>\n<p>And brands such as Burberry have already noted weakness in sales of sneakers and slides, products Gen Z and millennial consumers have traditionally used as their entr\u00e9e into the world of luxury brands.<\/p>\n<p>PLAN B FOR GEN Z?<\/p>\n<p>One way for luxury players to continue to attract Gen Z consumers may be to offer aspirational options at entry-level price points that can be worn often, said Yi Kejie, a 26-year-old marketing content manager. <\/p>\n<p>Luxury branded mobile phone cases, earrings, hair clips and perfumes are all popular among her Gen Z peers in China, Yi said, adding: \u201cThese are items with the lowest threshold for (them) to have that logo, that icon\u201d.<\/p>\n<p>Some luxury labels, including Balenciaga and Dior, are embracing the metaverse to seed interest with teens and young adults, offering affordable ways for them to kit out their virtual identities on gaming platforms such as Roblox. <\/p>\n<p>\u00a0\u00a0\u00a0\u00a0Virtual sneakers from brands like Gucci have already proved wildly popular, with a price point of $17.99.<\/p>\n<p>Whether in the real or virtual world, entry-level products call for high levels of creative investment. <\/p>\n<p>\u201cThere is this young crowd of consumers that are entering into the market that requires a lot of creativity at more affordable price points,\u201d said Bain partner Claudia D\u2019Arpizio, adding that not all brands are equipped for this.<\/p>\n<p>There is good news for brands, however.<\/p>\n<p>If they do find the right offering of entry-level products, or if the economic situation of Gen Z consumers improves, the desire for luxury products remains undimmed. <\/p>\n<p>\u201cYoung people in China are enthusiastic about luxury products,\u201d Yi said. \u201cLockdowns, or the temporary unemployment rate won\u2019t change their long-term preferences.\u201d<\/p>\n<p> (Reporting by Casey Hall, Doyinsola Oladipo and Mimosa Spencer; Editing by Alexander Smith)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/?attachment_id=2739662\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/08\/tagreuters.com2022binary_LYNXMPEI7H0FA-VIEWIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI7H0FA-VIEWIMAGE\" \/><\/a><\/p>\n<p><a href=\"https:\/\/www.oann.com\/?attachment_id=2739665\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/08\/tagreuters.com2022binary_LYNXMPEI7H0F5-VIEWIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI7H0F5-VIEWIMAGE\" \/><\/a><\/p>\n<p><a href=\"https:\/\/www.oann.com\/?attachment_id=2739667\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/08\/tagreuters.com2022binary_LYNXMPEI7H0FD-VIEWIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI7H0FD-VIEWIMAGE\" \/><\/a><\/p>\n<p><a href=\"https:\/\/www.oann.com\/?attachment_id=2739668\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/08\/tagreuters.com2022binary_LYNXMPEI7H0F0-VIEWIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI7H0F0-VIEWIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Casey Hall and Mimosa Spencer SHANGHAI\/PARIS (Reuters) \u2013 From $300 bucket hats to $900 sneakers and $700 t-shirts, the high-flying luxury sector is fretting over the appetite among financially<\/p>\n","protected":false},"author":66,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1616924","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1616924","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1616924"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1616924\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1616924"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1616924"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1616924"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}