Gen Z wants its own consumer culture, and this is what it’s going to look like

FastCompany: During a family vacation in Montana, Emi—a University of Georgia junior—was browsing silk pajama pants and leather shoes on her phone. She wasn’t searching for the hottest new brand to show the world what great taste she has. She was scrolling with a far more pragmatic goal: finding a great cost-per-wear. “When I’m looking for clothes, I’m thinking, ‘Will these clothes be able to transition into whatever job I get in the future?’” Emi explains. A decade ago, a 20-something like Emi would have been the target audience for startups like Outdoor Voices, Glossier, Everlane, and Allbirds.

These brands had perfected the art of aspirational branding , and aimed it squarely at millennials—a generation that emerged into adulthood during the DTC boom. But Gen Z consumers are shaping up to be very different from millennials. The aspirational branding that defined the 2010s is now falling flat with Emi and her peers. “It’s now less about the brand,” says Emi, who requested that her last name be withheld to avoid professional ramifications as she enters the job market. “We’re at the edge of a big inflection point for the consumer,” says Ben Lerer, founder and managing partner of the venture capital firm Lerer Hippeau.

“Brand builders need to be nimble in addressing continually changing consumer appetites.” Gen Z is projected to reach its peak market power by 2030, when its global spending is expected to top $12 trillion. Brands that want to succeed must be deeply attuned to Gen Z tastes. For founders building now, that means the entire playbook of the last decade—premium pricing, curated social media feeds, and brand-first strategy—is counterproductive.

In this Fast Company premium subscriber exclusive, read on to learn: Where venture capital investment is flowing to capture Gen Z Why Gen Z is changing what counts as a status symbol How brands are rethinking the ways they reach customers What Replaces Aspiration Few venture capitalists have a better front-row seat to this evolution than Lerer. In 2010, he launched Lerer Hippeau, an early stage investment fund, and quickly began writing checks to some of the hottest consumer brands of that era, including Warby Parker, Casper, Allbirds, Everlane, Glossier, and Birchbox.

“When we got started, we were entering a golden age of consumer brands,” Lerer says. “You had the rise of social media, the democratization of the supply chain, and a bunch of very sleepy incumbents.” Fifteen years later, the landscape has completely changed. Many of the venture-backed consumer brands of the 2010s struggled financially, and some met tragic ends. Allbirds has pivoted to become an AI company . Everlane’s sustainability chops went up in smoke when it was acquired by the ultrafast fashion brand Shein. Glossier has gone through many rounds of layoffs. Birchbox collapsed and was sold off in pieces.

These direct-to-consumer startups failed for many reasons. Fueled by VC money, many chased growth over profitability. The cost of advertising online went up, so they burned through cash to acquire new customers. Over time, many other startups flooded the market, making it harder for these brands to compete. And now, the majority of venture funding—upwards of $250 billion —is being sucked into artificial intelligence startups, leaving less money to keep these existing startups afloat. But another important reason these companies failed is that they failed to evolve to keep up with the next generation of consumers.

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The article addresses a significant shift in consumer behavior driven by Gen Z, which is crucial for brands to understand and adapt to, making it highly relevant and impactful for brand strategy professionals.