Retailers need to pay attention to younger shoppers and where they’re spending money, because those destinations are constantly changing.
Millennial and Gen Z shoppers in 2018 are flocking to the likes of Victoria’s Secret, Sephora, Nike and Nordstrom to shop, according to the 2018 Love List Brand Affinity Index compiled by Goldman Sachs and Conde Nast.
Millennials are defined as those people born between 1981 and 1996, according to the Pew Research Center. Gen Z shoppers are typically referred to as those consumers born thereafter. As time passes, these generations are expected to make up an even larger share of the U.S. population.
Luxury brands led by Gucci joined the list this year as millennials and Gen Z turn away from low-quality fast fashion. Nordstrom also benefited from the shift in consumer tastes, jumping five spots from last year.
“The idea of fast fashion has really taken a big dip, so they’re willing to pay more for something that will last,” said Pamela Drucker Mann, Conde Nast’s chief revenue and marketing officer. A strong consumer environment also explains the increased popularity of luxury brands.
The Love List asks millennial and Gen Z shoppers about their favorite brand, store or website based on category. Victoria’s Secret again topped the annual list, a surprising result given the retailer’s struggles to boost sales growth. Shares of L Brands, parent of Victoria’s Secret, are down nearly 29 percent since the start of the year.
Another surprise was Target, making the list this year for hair care. Last year, it ranked 17 for selling athletic apparel.
After ranking in the top 10 across all fashion categories last year, Amazon dropped off this year. While conventional thinking says that consumers make decisions based primarily on their wallets, millennials and Gen Z want more than just the low price tags of private labels.
Conde Nast and Goldman Sachs created the lists based on a survey of nearly 1,500 U.S. consumers ages 13 to 34, along with another survey of 1,174 Conde Nast “It Girls,” which the company defined as people who engage frequently with one or more Conde Nast brands and are known for being first to try new products and brands.