By JAY AQUINO

NOVEMBER 9, 2024

Several days ago, I spoke with a friend who happens to be obsessed with fashion as much as we do. As he describes his shopping habits, I got a glimpse into just how deeply Gen Z is reshaping the luxury industry. He talked about his newfound love for thrifting high-end items and the fact that he wanted to look cool and do it in the most sustainable way possible. The idea of wearing second hand items might not be everyone’s cup of tea, but to him and many like him, it’s a lifestyle. For Gen Z, the idea of “luxury” is increasingly tied to meaning, values, and a statement. And unlike previous generations, they’re influencing luxury in ways that might just stick.

Today, Gen Z has changed the rules of what it means to be a luxury brand. And with luxury sales on a growth trajectory—projected to reach nearly $3 trillion by 2030—it’s no wonder that brands are paying close attention to this cohort. But appealing to Gen Z isn’t as simple as slapping a logo on a limited-edition hoodie or launching an influencer campaign. This generation is laser-focused on authenticity, sustainability, and access in ways that would’ve baffled marketers a decade ago. So what are the key shifts, and can luxury brands keep up?

Values Over Status

Luxury was a symbol of status for a very long time—think gold watches and designer bags as signs of wealth. Gen Z, however, has flipped the script, placing values over pure prestige. Their definition of luxury aligns with brands that prioritize sustainability, inclusivity, and realness. In a world where global challenges are impossible to ignore, Gen Z sees their purchasing power as a chance to support companies that are actively making a difference. Blaise Hope of Sustainability Magazine says that 62% of Gen Z prefer buying from sustainable brands, and the pressure is on luxury houses to go green or risk getting left behind.

Gen Z consumers expect more than limited edition bags and fancy packaging; they want ethical practices to match. Brands like Stella McCartney and Hermés are already deep into the sustainability game, pioneering vegan leathers and environmentally conscious production methods. Amy De Klerk of Harper’s Bazaar says that Stella McCartney adopted Mylo™️ by Bolt Threads into its collection, while Hermés has released a handbag created using leather-imitation material made by Californian-based company MycoWorks, which uses a similar process with mycelium.

Photo credit: Stella McCartney

Born Digital

Gen Z grew up online and were practically raised by Instagram and YouTube, and their social lives, shopping habits, and even activism are all tightly woven into the digital fabric. For luxury brands, this means that traditional advertising won’t cut it. Gen Z expects luxury to live where they do—on social media platforms and through experiences that blur the line between the physical and digital worlds. 

Luxury brands are adapting by launching immersive AR and VR experiences. For example, Valentino utilized the popular game Animal Crossing: New Horizons to expand their demographic reach. GQ Middle East states that Valentino collaborated with Kara Chang, an artist, to create 20 custom virtual looks from their spring/summer 2020 collection. In addition, social media has taken luxury to new heights, making it feel more inclusive. Younger audiences now get a glimpse behind the velvet rope, seeing the intricate craftsmanship and decision-making that goes into each piece. It’s less about exclusive club membership and more about inviting the audience into the story. 

Photo credit: Animal Crossing Fashion Archive / Kara Chung

The Allure Of “Quiet Luxury”

Quiet Luxury was an unexpected trend that shaped Gen Z’s take on the idea of luxury. In the 2000s, luxury was about logos and bold branding; today, young luxury shoppers are embracing minimalism, thus brands like Loro Piana and Ralph Lauren became popular amongst this demographic. Television series like Succession have popularized this concept; Sage Anderson of Rolling Stone states that the fictional Roy family have become accidental trendsetters. Their old money aesthetic and razor-sharp style caused many shoppers to emulate them. 

Gen Z fell in love with the idea of quiet luxury due to their desire for quality over conspicuous consumption. It’s about pieces that speak for themselves through craftsmanship and timeless design rather than loud logos. As we are more exposed to economic uncertainties, this trend became more appealing than ever, and showy purchases can seem tone-deaf. Instead, subtlety is the new status symbol, and Gen Z made this very clear.

Price Sensitivity And Alternative Access To Luxury

Economic pressures aren’t lost on Gen Z. This is the generation that came of age during a global pandemic and is now navigating a cost-of-living crisis. Even as they aspire to luxury, they’re finding clever ways to reconcile their high standards with economic realities. Thrifting, reselling, renting, and upcycling are all practices they embrace, turning the luxury model on its head by creating their own access to high-end products without paying full retail.

This price sensitivity means that traditional luxury brands have had to reconsider their approach. More brands like Saint Laurent and Burberry are experimenting with their price points, making luxury more appealing. Lisa Nan of Jing Daily states that Burberry has recently cut prices of their medium-sized Knight bag by 22%, and they have also lowered the price of all handbags designed since creative director Daniel Lee took over. In addition, Saint Laurent has also reduced the price by 10% of their small Loulou handbags this year from $2,950 to $2,650. But even within these price points, Gen Z demands authenticity—they’re not looking for cheap knockoffs but for genuine, attainable pieces that respect their values. Brands that lean into this by offering entry-level products without sacrificing quality or principles have a better chance of capturing this market.

A Hybrid “Phygital” Experience

In a twist that defies stereotypes about “digital natives,” Gen Z actually craves physical experiences too. They’re interested in a seamless blend of physical and digital—what’s now known as “phygital.” This generation may do most of their shopping on smartphones, but they still value in-store experiences, especially when these offer something exclusive.

Luxury brands that blend online engagement with physical experiences have found a winning formula. For example, Gentle Monster’s Haus Shanghai and Balenciaga’s “phygital” haute couture with Fortnite connect digital natives with the tangible world—allowing them to engage with consumers across channels in a way that feels personal and cohesive.

Photo credit: Fortnite

The Big Picture: What Luxury Means To Gen Z

As Gen Z comes of age, they’re taking their redefined sense of luxury with them. By 2030, this group is expected to drive almost a third of luxury purchases. But the road ahead isn’t simple. Gen Z’s expectations are high, and luxury brands will need to keep evolving to meet their demands for transparency, sustainability, and inclusivity.

In a sense, Gen Z’s influence on luxury mirrors the broader shifts we’re seeing in culture. Just as they want more from their products, they want more from the brands that make them. It’s no longer enough for luxury to be expensive; it has to be meaningful, engaging, and true to its values. Brands that don’t just talk the talk but genuinely live up to these ideals will find a willing, eager, and loyal audience among Gen Z. And for those that can’t adapt, they may soon find themselves left out of this new definition of luxury.

Banner photo credit: Phil Oh, Vogue