Most of Gen Z Can’t Afford Gucci—Here’s How the Brand is Reaching Them Anyway

Gucci has embraced the metaverse, gaming, and digital currency to win next gen consumers…

TL;DR:

YPulse research shows that Gucci is the top luxury brand that young consumers want to own
The brand has embraced the social platforms and digital spaces where Gen Z is spending time, cultivating affinity among the generation early
In 2022 alone, Gucci has been setting up space in virtual worlds, embracing esports, and experimenting with crypto payments

Cultivating affinity with next generation consumers is essential for any brand that wants to stand the test of time. One day, these young consumers will be your target demographic, and the ones with the spending power. But as Gen Z and Millennials redefine luxury, it can be difficult for traditional high-end brands to win them over—especially because the majority are on a budget. In fact, 57% of Gen Z reports that they have never purchased a luxury product, and not being able to afford it is the top reason. So, how are higher priced, conventionally exclusive brands supposed to win young fans? Gucci might be writing the playbook.

YPulse told you that Gucci is the top luxury brand that Gen Z wants to own by a landslide—and they’ve certainly been doing a lot to generate hype among Gen Z and keep them engaged. More luxury brands have joined TikTok in recent years to connect with younger users, and Gucci is perhaps “the most popular luxury brand for Gen Z” on the app with 1.6 million followers, thanks to hashtag challenges including the #GucciModelChallenge and #GucciAbsoluteBeginners, which have built their presence on the app. They’ve leaned into gaming and the metaverse with the Campaign Sneaker Garage and Gucci Garden—and have organically tapped online creators for their campaigns.

And of course, there was last year’s release of House of Gucci (starring Adam Driver and Gen Z and Millennial-favorite popstar Lady Gaga), which further pushed the brand’s popularity into the resale market. According to ShopStyle, searches for Gucci were up 31% on the digital shopping platform, with the double-G belt style leading searches at 71% while bags and loafers were up 60% and 50%, respectively. Lyst notes searches for Gucci jumped 68% within 48 hours of the film’s release, although that doesn’t beat the 173% increase Lyst experienced after the trailer dropped last August. Searches for “vintage Gucci” increased a whopping 270% according to Wethrift.

Kering reported that Gucci sales reached a whopping $11 billion last year—an all-time-high performance for the brand. Putting self-expression and individuality at the forefront of their campaigns, while celebrating their customers is certainly something that’s winning them over with younger consumers who prefer authenticity from brands. After all, Gucci was one of the first brands to embrace gender fluidity. Our luxury research shows that young consumers are redefining what luxury means, and having a strong brand story like Gucci’s while experimenting with brand collabs and digital activations are ways to reach the next gen. So far in 2022, Gucci has continued to go strong with campaigns and initiatives that lean into digital spaces where Gen Z is spending their time, proving that they are a luxury brand to watch when it comes to winning over this younger consumer. Here’s what they’ve recently launched and are planning in coming months:

Gucci Gaming Academy
From its Campaign Sneaker Garage to Gucci Garden, Gucci is no stranger to the world of gaming. At the end of May, the luxury house announced it was partnering with Feceit, the largest competitive gaming platform in the world, to support amateur gaming talent in their rise to esports fame. This sponsorship opportunity will be based on players’ performance on and off screen; their gaming abilities and soft skills. Gucci is looking for the total package, since the program will be offered for one year or until a participant has been signed to a pro-league team. The Gucci Gaming Academy will offer a ton of perks to help navigate their lives as pro esports players, including stress management techniques and overall mental health support in collaboration with the World Health Organization and Mindworks, and of course Gucci will be adding their “stylistic flair” to the academy. Esports players and streamers are extremely influential among Gen Z and young consumers are often swayed by their sponsorships.

Gucci Town
We’ve told you that Gucci tested the marketing waters in Roblox with its Campaign Sneaker Garage and Gucci Garden, and now the brand is expanding its footprint in the digital gaming platform even more. At the end of May, Gucci announced it was launching a more “persistent space” in the game called Gucci Town, which features “a central garden that links together various areas, including a space for mini-games, a cafe, and a virtual store where players can, of course, purchase virtual Gucci gear for their Roblox avatar.” The plaza, which will be in the shape of the luxe logo, will be surrounded by Mini Game Heights, an arena with Gucci themed competitions; Creative Corner, a place for players to be artistic; and Power-Up Place, a cafe where players can interact with their friends and others in the community. Of course, the town will also include a Gucci Shop where they can buy special edition Gucci clothes and accessories for their avatars. As visitors interact with the experiences in Gucci Town, they’ll earn GG Gems, an in-game currency they can use to purchase more products and power-ups. Ultimately, their intention is for every player to experience and have access to the luxury brand, regardless of socioeconomic status. According to the company, the virtual outfits on the platform will make use of Roblox’s new “layered clothing” technology. Gucci reports that more than 20 million players visited its Gucci Garden last year in the two weeks that it was live, and they expect this new space to “steadily evolve over time.”

Gucci Vault’s Interactive Fashion Experience on The Sandbox
Roblox isn’t the only digital platform Gucci is investing in. Last fall, Gucci launched Gucci Vault, which they describes as a retail experience that functions as “a time machine, an archive, a library, a laboratory, and a meeting place”—and it sells vintage Gucci (including archival pieces customized by Alessandro Michele) as well as pieces from up-and-coming designers. Earlier this year, Gucci Vault announced that it was launching a virtual world on The Sandbox—a web3 virtual world that YPulse research shows is a leader when it comes to future metaverses. While use of the platform is currently far lower than other virtual worlds (8% of 13-39-year-olds say they play in The Sandbox versus 29% who play Roblox) Gucci is clearly willing to experiment in new technologies and digital platforms that might have future potential. According to The Sandbox, the virtual Gucci Vault space “will be inspired by childhood memories of the search for beauty, which brings you to Gucci Maze” and fostering conversations about fashion and the metaverse. Fashion products created by Gucci designers will also be part of Gucci Vault for users to virtually buy, own, and wear. The Sandbox and Decentraland have become a new focus of fashion brands and designers alike as they deepen their investment in virtual worlds , and the Gucci Vault in The Sandbox is the next natural step in the virtual world for Gucci.

Accepting Crypto as Payment
At the beginning of May, the luxury house announced that it would begin accepting crypto as payment in some of its U.S. outlet stores, located in LA, Miami, Las Vegas, and New York. Customers who choose to pay with crypto will receive a link via email containing a QR code that will let them pay using their respective crypto wallets. Ten currencies will be accepted, five “stablecoins pegged to the U.S. dollar,” along with Bitcoin, Bitcoin Cash, Ethereum, Wrapped Bitcoin, Litecoin, Shiba Inu, and Dogecoin. YPulse’s Buying Into Crypto and NFTs trend research found that 56% of Gen Z and Millennials think brands should start accepting payment in cryptocurrencies. And despite recent headlines about the crypto market crashing, our research found that 22% of Gen Z and Millennials say they are interested in investing in cryptocurrencies to have extra money for fun things—and getting into the type of digital investments that next gen shoppers are into is certainly a way to keep customers engaged.