KEY INSIGHTS:
Generational Split: Consumers in post communist countries, including Poland and CEE, are divided into Pre 90s generation (35-60) and Post 90s generation (15-35) groups with distinct behaviours and needs.
Pre 90s Generation: Values status and success, preferring international products and brands that showcase this.
Post 90s Generation: Seeks personalization and originality, proud of local products and brands.
Market Misalignment: Local companies struggle to align strategies with post 90s generations’ needs.
China Case Study: Western European luxury brands struggle in China due to not adapting to the Post 90s generation, similar to challenges in Poland and CEE.
Navigating the New Consumer Landscape
In the fast developing fashion and retail markets of Poland and Central and Eastern Europe (CEE), understanding the macro shifts in consumer behaviour is paramount for brands aiming to connect and resonate with their target audiences. Since 2020, the region has witnessed significant changes in consumer behaviour, spurred by a combination of the global pandemic and geopolitical events, such as the war in Ukraine and its subsequent economic impacts, including inflation. These factors have accelerated pre-existing trends and created a stark generational divide in consumer preferences and behaviours in post communist countries.
Generational Divide: Two Distinct Consumer Groups
The main consumer base of the fashion and lifestyle industry in post communist countries, aged 15 to 60, can be distinctly categorised into two groups with differing needs and mindsets:
Group 1 (Aged 35-60, Born in the 1970s and 1980s): This generation was shaped during a time of modernization and growing mass consumption. Their values are rooted in status, success, and rationality. They admire a singular role model epitomising success and are driven by aspirations of upward social mobility. Products that signify status, such as luxury cars and branded goods, appeal to them. However, they often perceive local brands as inferior in quality, favouring established international brands (or local brands which imitate them) that align with their aspirations.
Group 2 (Aged 15-35, Born in the 1990s and 2000s): The younger generation, now a growing majority in the market, exhibits a vastly different psychology and worldview. They seek personalization, emotional fulfilment, and a sense of uniqueness. Unlike Group 1, they do not adhere to a single role model but embrace diversity and personal values. Their consumer behaviour is more impulsive and intuitive, and they take pride in local brands that resonate with their values of doing and surrounding themselves with the things that they like as unique individuals.
Implications for the Fashion and Retail Industry
The divergent mindsets of these two groups pose a unique challenge for local companies in Poland and CEE, many of which are led by decision-makers from the Pre 90s generation. There is often a disconnect between the products and marketing strategies devised by these leaders and the actual needs and desires of the post 90s generation.
For Group 1, brands need to emphasise quality, status, and success. Marketing strategies should highlight the aspirational aspects of products and align with the rational decision-making process of this cohort.
Conversely, to engage Group 2 effectively, brands must focus on originality, diversity, and emotional connection. It is crucial to move away from outdated role models and instead reflect genuine diversity (tailored to the local market) and individuality in product offerings and marketing campaigns. This group values local brands that genuinely represent their culture and individuality, rather than mimicking foreign trends.
Lessons from China
Poland and CEE share similarities with China in their rapid transition from communism to capitalism, resulting in comparable generational divides in consumer behaviour. Observing China’s approach to navigating these shifts can provide valuable insights. Chinese brands have successfully balanced tradition and modernity, catering to the unique needs of both Pre 90s and Post 90s generations. By understanding and applying similar strategies, Polish and CEE brands can better bridge the generational gap.
Case Study: Western European Luxury Brands Struggle in China
Western European luxury brands, such as Gucci, have recently been struggling in China and are losing their influence to emerging local competitors. This shift is driven by the Post 90s generation, which has become the driving force behind changing client preferences. Tencent, BCG and Farfetch Ltd. reported that the average age of luxury consumers in China is 28-29 years old — a full ten years younger than the average age of luxury buyers in most other parts of the world.. This generational gap poses a challenge for Western European luxury brands that typically cater to more mature audiences.
Luxury brands have struggled to resonate with younger Chinese consumers, who demand digital integration, cultural relevance, and localised expressions of diversity. Conversely, local brands have capitalised on these preferences, offering products and marketing campaigns that align more closely with the values and lifestyles of younger consumers. This underscores the importance of understanding and adapting to local markets, including generational gaps, to maintain relevance and competitiveness.
Strategic Recommendations
To thrive in this market landscape, Polish and CEE brands must adopt a dual approach:
For Group 1: Develop products and brand strategies that emphasise quality, status, and rational benefits. Highlight aspirational messaging that aligns with their pursuit of success and upward mobility.
For Group 2: Prioritise originality, emotional resonance, and diversity. Engage with local cultural differences and create brand narratives that reflect originality and personal values.
By understanding and adapting to the distinct needs of these generational groups in post communist countries, brands can create more effective, resonant connections with their audiences, driving sustainable growth in Polish and CEE markets.
For more insights on consumer behaviour and market strategies, visit Kondo & Partners Insights.