What retail gets right—and wrong—about Gen Z, according to a Gen Z investor

At 25, Meagan Loyst is the youngest investor at VC firm Lerer Hippeau.
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Hadi Yazdani

· 6 min read

If you want to be technical about it, Meagan Loyst says she’s what you’d call an “Elder Gen Z,” born—as she was—in April 1997, with the generation generally bracketed from 1997 to 2012. Loyst is so long in the tooth, she noted, that, unlike her younger sisters, “My first phone was not an iPhone.”

Still, at 25, Loyst is the youngest investor at Lerer Hippeau, the VC firm she joined in 2020. She also founded Gen Z VCs, a Slack group with ~15,000 members that aims to make VC less opaque for young investors, and to help connect them with company founders in their cohort.

Loyst is a go-to analyst when it comes to Gen Z consumers and brands, a topic she spoke about at the NRF Conference in January, and this year, Forbes named her to its “30 Under 30” list in the VC category.

Now, it’s Gen Z month at Retail Brew, and we’re trying to shed some light on the customs and rituals of these mysterious creatures. So we asked Loyst about what retail brands get right about Gen Z, what they get wrong, and what she’s going to do with herself when everyone gets obsessed with the next generation.

This interview has been lightly edited and condensed for clarity.

When it comes to companies that seem to really resonate with Gen Z, I’ve heard you talk before about Parade, the underwear brand, that—just so it’s clear to readers—your company, Lerer Hippeau, has invested in. Why does Parade stand out?

You grow up as a Gen Z consumer watching the Victoria’s Secret Fashion Show, going to Victoria’s Secret, and you see the same thing. It’s a group of tall, skinny, mostly white women, and you’re like, “Oh, this is what beauty looks like—this is the convention of beauty.” But you look around at the world, and I would argue that that beauty means a lot more. And so the first thing that really struck me about Parade was the fact that they’re inclusive of race, of size, of color—they even include men in a lot of their campaigns. And seeing women who are curvy like me is really, really important. And it’s not something that they fell into: This was a part of their brand promise on day one.

Every sort of point that you have with that brand feels authentic to me. They use recycled fabrics—that’s not why I buy, but I do love that I know when I’m buying from Parade, that there’s some type of social impact and cause behind it. I know that a percentage of my purchase is going towards Planned Parenthood. I love that they stand for things.

Does a company supporting causes like Planned Parenthood seem more important for Gen Z?

Pretty much every Gen Z company that comes through our doors has some type of sustainability pledge like, “Better for you, better for the planet.” That’s not something with our portfolio companies across the board. And it’s because this is where the world is moving. To launch a brand today and not be thinking about these things is—it’s not tone deaf per se, but if you’re going after the Gen Z consumer, you kind of have to be doing it.

Is there a supposed insight that retail executives think they know about Gen Z but that’s only half-right or just wrong?

I would argue that most Gen Zers don’t purchase things solely because they’re sustainable. Shein is a great example of that…Shein hauls have [more than] 5.1 billion views on TikTok, and a majority of their users are Gen Z. Shein is the total opposite of what a sustainable brand looks like: They’re quintessential fast fashion. The assumption that Gen Z are buying things just because they’re sustainable and good for the world is just a misconception because there’s a bunch of factors that go into the buying decision at the end of the day.  

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That’s interesting because I know that, like me, you are very into resale, correct?

Love it.

Recently I interviewed the founder of ThredUp, James Reinhart, and also Liz Hershfield, who heads up sustainability at Madewell and J. Crew. They said a lot of the rationale for why resale is growing so fast now is because Gen Z is so eco-conscious. And it makes me wonder because—

I disagree. I don’t think that’s the sole reason. First of all Gen Z—sorry to cut you off.

No, no, please, I want to hear it.

Gen Z, we’re very expressive consumers. We love to express our individuality, especially in the way that we dress…Depop sold [to Etsy] for north of $1 billion. They’re a very, very Gen Z-focused platform. People are retrofitting outfits on Depop and styling them in different ways. It’s unique finds, and it’s cheap.

The sustainability piece is great, but I don’t think that’s the main driver of like, “Oh, I’m going to thrift so that I can be completely sustainable.” It’s, “I want to find really really cool pieces that I can wear and I can talk about and I can do it at a price that makes sense for me.” Because at the end of the day, the oldest Gen Zers are turning 25 this year. We’re like one, two, or three years post-grad at the max. Most people don’t have a ton of money or a bunch of dispensable income to just throw away on clothes.

What’s a brand whose approach on TikTok others should be emulating?

One of the best cases of a brand that is doing a really good job of creating conversations around their niche is August, which is a period company [and not one of Lerer Hippeau’s portfolio companies]. Their founder, Nadya [Okamoto], has 3 million followers personally and then August has hundreds of thousands of followers as well. When you look at history, when it comes to periods in particular, it was like, “Oh it’s that time of the month, [but] you won’t even know it’s there.”

You look at August and it’s like, “You got your period! Welcome to womanhood!” Nadya publishes TikToks about having your period. She shows period blood, things that are conventionally pretty controversial. But then you look at her comment section, and it’s a bunch of young women and girls in particular—obviously +60% of TikTok’s users are Gen Z—and they’re like, “Nadya, I got my first period! I’m so excited!” It’s changing that narrative a lot. Gen Z companies—the ones that do really well—do a fantastic job of empowering the end consumer.

What’s it going to be like when the next generation is the hot big thing and you’re just one of the olds and people don’t really care about your perspective anymore?

It’s gonna be sad when Gen Z goes out of favor eventually. But it’s not like Gen Z is going to disappear in 10 years—it’s still going to be a core customer base for a lot of brands, the same way that millennials are now. It’s just not going to be as much of a mystery as Gen Alpha will be.

Gen Z is hot right now, and Gen Z will be hot in five years. But in 10 years when we’re not, I’m still happy to be the Gen Z oracle for folks who need me.

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.