What do you think of when you think of luxury? For many of us, luxury means a penthouse apartment overlooking the park, or first-class seats en route to a well-deserved vacation. But for Gen Z consumers, what is classified as luxury is undergoing a seismic shift. While a recent report found that Millennials and Gen Z accounted for all of the growth in the luxury sector in 2022, there’s no doubt that Gen Z is developing different ideas of what defines a luxe moment. 

But before you assume younger consumers aren’t interested in status pieces like Birkin bags and Gucci loafers, it’s worth noting that Gen Z shoppers are starting to buy luxury items about five years earlier than Millennials, according to the abovementioned report. That means that consumers as young as 15 are starting to look towards the types of status pieces that their parents worked many years to be able to afford. 

This is largely due to Gen Z consumers having access to high-priced items online, often through resale sites, and digital credit companies like Klarna, making it easier to finance big-ticket items over time. Nearly one-third of Gen Z consumers live with their parents (or have moved back home), giving them more disposable income to invest in luxury pieces. 

While the launch into their adult lives might look different than older generations, this generation is expanding the idea of luxury. With their unique values, preferences, and spending habits, Gen Z is challenging the traditional notions of luxury and profoundly reshaping the market. 

Here, we will take a closer look at how Gen Z is blurring the lines of the luxury market, by exploring key trends and the implications for brands seeking to capture this evolving demographic. 

What Does Luxury Mean for Gen Z Consumers? 

Beyond just a logo, Gen Z looks for different markers when it comes to what they count as a luxury experience– it’s more layered and ultimately more inclusive than previous generations. 

• Embracing Sustainable Luxury: Gen Z consumers prioritize sustainability and ethical practices, driving demand for luxury brands to adopt environmentally friendly and socially responsible initiatives. This is most evident in fashion, where designers like Stella McCartney, a pioneer in sustainable luxury, appeals to Gen Z with cruelty-free materials and transparent supply chains. 

• Digital-First Experiences: Gen Z’s digital fluency has transferred luxury consumption, with online experiences and social media playing a pivotal role in purchasing decisions. The rise of luxury resale platforms like The RealReal and Vestaire Collective caters to Gen Z’s desire for authenticity, affordability, and sustainability. 

• Accessible Luxury: Gen Z seeks luxury experiences that are accessible and inclusive, favoring brands that offer entry-level products and democratize the elite image of luxury. Louis Vuitton’s collaboration with streetwear brand Supreme bridged the gap between high fashion and street culture, appealing to Gen Z’s desire for authenticity and cultural relevance. 

• Personalized Experiences: Gen Z craves personalized interactions and unique offerings, prompting luxury brands to adopt customization and co-creation strategies. Burberry’s “B Series” drops, where limited-edition pieces are released monthly in collaboration with Gen Z influencers, resonate with the demographic’s desire for exclusivity and individuality. 

• Values-Driven Consumption: Gen Z prioritizes brands that align with their values and social causes, driving luxury brands to embrace activism and purpose-driven initiatives. Gucci’s partnership with UNICEF to support girls’ education in Africa resonates with Gen Z’s commitment to social justice and global equality. 

So what are the implications for brands in the luxury market? What can brands do to reach and capture Gen Z consumers? To thrive in the evolving luxury market, brands must understand and adapt to Gen Z’s values, preferences, and behaviors. 

Using the points mentioned above as a guide, here are 6 examples of what some luxury brands have done to get on the radar of younger consumers: 

Embracing Sustainability and Ethical Practices: High-end brands should prioritize sustainability and ethical practices to align with Gen Z’s values and preferences. When LVMH acquired Stella McCartney’s label, it illustrated the brand’s commitment to sustainable luxury, leveraging McCartney’s expertise in ethically produced fashion to appeal to environmentally-conscious Gen Z consumers. 

Invest in Digital Innovation: Brands seeking to connect with Gen Z consumers should enhance their digital presence and innovate in online experiences to engage with this crucial audience. Chanel’s launch of virtual try-on experiences and immersive AR filters on social media platforms like Instagram allows Gen Z to interact with the brand in innovative ways, bridging the gap between online and offline luxury experiences. A recent survey found that nearly nine out of ten Gen Z consumers stated they are interested in VR/AR shopping experiences. 

Offer Accessibility and Inclusivity: Luxury brands should offer entry-level products and experiences to cater to Gen Z’s desire for accessibility and inclusivity. Dior’s “Dior Essentials” line features affordable luxury items such as long t-shirts and accessories, making the brand more accessible to younger consumers without compromising its exclusivity. 

Personalize Interactions and Offerings: Luxury brands leverage data-driven insights to personalize interactions with Gen X consumers, enhancing their overall customer experience. By analyzing browsing history, purchase preferences, and social media activity, brands can tailor their communications and offerings to match the individual tastes and interests of younger consumers. 

Gucci employs advanced data analytics to create personalized recommendations and exclusive digital experiences for Gen Z consumers. Through targeted marketing campaigns and customized product suggestions, Gucci has effectively engaged with younger audiences, demonstrating the importance of data-driven personalization. 

Cultivate Collaborations and Partnerships: Collaborations with like-minded brands, influencers, and cultural icons offer opportunities for luxury brands to reach Gen Z’s diverse interests and passions. Off-White’s collaboration with Nike on the Air Jordan 1 sneakers, designed by Virgil Abloh, seamlessly blends luxury fashion with streetwear culture, capturing the attention of Gen Z consumers who value authenticity and cultural relevance. 

Create Immersive Experiences: Brands should consider creating immersive, experiential environments that go beyond traditional retail settings, offering memorable encounters that resonate with Gen Z’s desire for meaningful experiences. 

Again, Gucci got it right– the Gucci Garden in Florence, Italy, combines a museum, concept store, and a restaurant, providing visitors with a multi-sensory journey through the brand’s history, attention to craftsmanship, and creative vision, appealing to Gen Z’s love for unique and immersive experiences. 

With the luxury market valued at more than a trillion dollars, it’s clear that this is a segment on the radar of consumers of all ages. By strategic adaptation and thoughtful engagement of the points above, brands can forge authentic connections with Gen Z consumers, earning their loyalty and securing their position in the evolving luxury space. .