Gen Z is shaking up the luxury market, steering it away from traditional values toward inclusivity, sustainability, and digital authenticity. Representing 20% of the personal luxury goods market and with 73% willing to pay more for sustainable products, this generation approaches luxury as a channel for self-expression, emotional connection, and meaningful experiences. In this edition of #AIonPoint, we do a deep dive into what luxury means to Gen Z and how brands can adapt to stay relevant.
For Gen Z, luxury has shifted from ownership to experience. Rather than focusing on products as status symbols, this generation craves meaningful and memorable experiences that connect with them emotionally.
In practice, this means Gen Z consumers want brands that offer unique ways to engage, such as pop-up events, digital-first experiences, or even exclusive in-store activities that go beyond the purchase. For instance, rather than a high-end handbag that’s inaccessible, they’re more likely to value an immersive brand event where they can connect with influencers, engage in creative activities, and feel like they’re part of a community.
Key takeaway: Brands should go beyond the product by crafting experiences that resonate emotionally with Gen Z consumers. A memorable brand interaction—especially one that allows self-expression—can leave a lasting impact on these young consumers.
Social media is Gen Z’s gateway to the luxury world. With 91% of Gen Z on Instagram and 86% on TikTok, these platforms are not only for socializing but also for discovering new products and brands. Social media has essentially democratized luxury, bringing exclusive items and luxury narratives to a wider audience.
Gen Z’s luxury purchases are often inspired by influencer posts or by immersive content such as TikTok unboxings and Instagram live shopping events. They crave behind-the-scenes content and brand stories that feel real and transparent. Traditional luxury campaigns fall short for this generation; they’re more likely to respond to user-generated content or influencers they feel a genuine connection to.
Key takeaway: Gen Z values an authentic, digital-first presence. Brands that leverage social media to share real, relatable stories—and that collaborate with influencers who align with Gen Z’s values—are more likely to build brand loyalty.
Gen Z is one of the most diverse generations to date, and they expect the brands they support to reflect this. For Gen Z, luxury brands should be inclusive and representative of a wide range of identities and backgrounds.
This generation favors brands that offer a more inclusive perspective—whether it’s through diverse models in campaigns, inclusive sizing in apparel, or product designs that cater to a variety of lifestyles. For Gen Z, exclusivity based on race, gender, or identity feels outdated; they believe luxury should be accessible and representative of everyone.
Key takeaway: Luxury brands that want to connect with Gen Z should prioritize diversity and inclusion in every aspect, from design to marketing. Showing a commitment to inclusivity not only aligns with Gen Z’s values but also broadens a brand’s appeal.
Suggested Visual: An infographic or pie chart showing the demographic breakdown of Gen Z globally, underscoring their diverse backgrounds.
Gen Z is particularly committed to sustainability. Not only are 73% willing to pay more for sustainable products, but they’re also active participants in the circular economy, favoring pre-owned luxury as a sustainable choice. Gen Z views sustainable brands as more trustworthy and forward-thinking, making it crucial for luxury brands to align with these values.
In response, many luxury brands have introduced sustainable lines, improved transparency in their supply chains, or even launched certified pre-owned programs to cater to this demand. By adopting eco-conscious practices, brands demonstrate their commitment to environmental responsibility, which resonates deeply with Gen Z consumers who value ethical production and reduced waste.
Key takeaway: Brands should embrace sustainable practices and transparency, making it clear how they contribute to environmental preservation. Initiatives like recycling programs, transparent supply chains, and sustainable collections are essential for capturing Gen Z’s loyalty.
Technology plays a crucial role in creating the kind of immersive, personalized shopping experiences Gen Z craves. With the rise of augmented reality (AR) and virtual reality (VR), luxury brands can offer Gen Z a “try-before-you-buy” experience. In a digital world where personalization and customization are highly valued, brands that leverage technology to create unique experiences stand out.
For example, luxury brands are creating virtual showrooms where customers can view products in 3D, try on items using AR filters, and experience the brand’s world without stepping foot in a physical store. The metaverse is also emerging as a space for luxury engagement, where digital-savvy Gen Z consumers can “own” virtual luxury items or attend brand-hosted virtual events.
Key takeaway: Brands that leverage technology to offer personalized and immersive experiences—whether through AR, VR, or the metaverse—will connect with Gen Z’s desire for unique, interactive shopping.
For Gen Z, loyalty is built on trust and transparency. They are often skeptical of brands that appear insincere or unclear about their practices, particularly around sourcing and labor standards. This generation has access to more information than ever, and they expect brands to be honest about how their products are made and what they stand for.
Brands that actively communicate their practices and values—whether through transparent supply chains, ethical sourcing, or brand initiatives—are more likely to win over Gen Z. In addition, luxury brands that provide personalized experiences, like customized emails or curated collections, are more likely to keep Gen Z engaged and invested.
Key takeaway: Luxury brands should prioritize transparency and ethical practices, sharing insights about their production processes and values. This openness not only builds trust but also sets brands apart in a market where Gen Z demands authenticity.
For brands, the future lies in redefining luxury to align with Gen Z’s values—where sustainability, inclusivity, and digital connection are no longer “nice-to-haves” but essential. This generation’s commitment to these principles is reshaping the luxury landscape, moving it from exclusive and traditional to diverse and values-oriented.
By combining these insights and adapting to Gen Z’s evolving view of luxury, brands can not only capture the spending power of this dynamic demographic but also foster long-term loyalty. Download the full Virtual Audiences report on Luxury Perception by Gen Z here.
Each post in #AIonPoint: Market Insights for Brands explores the trends and consumer behaviors shaping your industry. From retail and CPG to tech, we’re uncovering what truly drives markets, all powered by our synthetic data solution that’s fast, accurate, and always on point. Stay tuned for more insights and trends as Yabble AI decodes consumer behavior, helping brands thrive in an ever-changing landscape.