Why Luxury Needs to Rethink How It Speaks to Gen Z

On paper, Nolan Daniel White is luxury’s dream Gen-Z customer.

The 24-year-old menswear content creator and consultant is a lifelong watch collector who once owned a Rolex valued at $30,000. He’s been buying luxury fashion since he was a teenager, drawn to both Demna’s luxury streetwear for Balenciaga and archive menswear grails such as Rick Owens’ “Dunk” sneaker. Shortly before speaking to the The Business of Fashion, White shared that he recently bought Dior and Burberry coats.

If White was 10 years older, he’d be a regular at a slew of boutiques, where sales associates would know his favourite sneaker. Yet White said he can recall only one full-price purchase he’s made in a luxury store — a pair of Gucci socks for $80. Most of his wardrobe, including the Rolex watch, were purchased at resale or on deep markdown. Those Burberry and Dior coats? Vintage and only $280 each.

White’s approach to luxury fashion is typical of many Gen Zers. According to Bain & Company, luxury sales to Gen-Z shoppers fell by 4 to 6 percent last year, compared to a 1 to 3 percent overall drop. Those shoppers’ net promoter score — a measure of how likely they are to recommend products to friends — was 25 to 30 points lower compared to Millennials.

Gen Z’s disinterest in luxury goods starts with what they cost. In a time when core luxury products such as Louis Vuitton Speedy bags have increased by over 90 percent since 2019, younger consumers are increasingly seeking out alternatives such as pre-loved luxury goods, affordable dupes, or outright counterfeits that could easily be purchased on Reddit.

But there’s more to it than price. When Millennials were entering their peak spending years in the 2010s, luxury spoke to them by translating fundamental dynamics within the category to a generation that grew up enamoured with subcultures such as hip-hop, skateboarding and streetwear. The voices that shaped the category for this generation, such as Virgil Abloh and Demna, understood that aspirational goods meant limited-edition graphic hoodies and sneakers rather than heritage leather handbags.

That strategy has fallen flat with Gen Z. In surveys, young shoppers say they base purchasing decisions on a brand’s authenticity, community and values. Scarcity and hype aren’t driving sales like they used to.

“A lot of my friends are quite savvy and feel the way I do about luxury goods: We all feel that it just isn’t really worth it and probably hasn’t been for a long time,” said White.

Luxury brands have made valiant efforts to engage with Gen-Z customers through experiential retail, partnering with young influencers, actors and pop stars, and embracing affordable trends such as bag charms. But sinking sales demonstrate that it hasn’t been enough. Some brands are going further, meeting Gen Z where they are, whether that means embracing the secondhand market, or creating content designed to entertain the first generation of digitally native consumers.

But time is running out. According to NielsenIQ, Gen Z will surpass Millennials’ spending by 2030. There’s a chance – maybe even a good one – that the 21-year-olds sourcing vintage Dior today will graduate to the real thing when they’re a decade older. But the industry can’t risk waiting for their youngest customers to come around.

“Gen Z as a whole are beginning to show signs of habits that may become permanent in terms of how they’re prioritising lower cost experiences or seeking lower-cost for higher value products,” said David Patterson, an associate partner for Clarkston Consulting.

Gen Z’s Appetite For Authenticity

Kate Bartlett, a 24-year-old New York City content creator who went viral on TikTok this year for stocking her kitchen pantry with luxury stilettos and sunglasses, believes luxury brands must “throw the prestige out the window” to connect with Gen Z. She points to the rollout for Louis Vuitton’s new beauty line as a good example. Instead of tapping creators to shoot glossy campaigns, the brand just sent them makeup to unbox. Miu Miu took a similar approach when it launched its newest fragrance this week by seeding TikTok creators packages that included a Miu Miu-branded microphone.

“Nine times out of 10, if it’s a new bag or product launch, an unboxing where creators speak to the camera is going to perform so much better than an aesthetic montage that the brand would probably love and think is beautiful,” said Bartlett.

Authenticity is also what draws Gen-Z influencers like 27-year-old Mark Boutilier to smaller multi-brand luxury or high-fashion retailers rather than the luxury brand flagships on Fifth Avenue. Boutilier frequents stores like Colbo, a multi-brand downtown Manhattan retailer that specializes in indie designer labels and known for a communal vibe. This discovery and engaging experience that multi-brand retailers offer to Gen-Z shoppers contrasts with how luxury brands attempt to funnel them into their own sales channels. Boultier also likes that Colbo’s employees passionately talk him through the store’s offerings, versus the stern demeanor of sales associates at many luxury brands’ stores.

“It’s about taking a bit of the pretentiousness out and just bringing people together to have a good time — whether they want to buy something or just come in for a coffee,” said Boutilier.

That tip from Gen-Z consumers for luxury brands to loosen their collar is being taken into consideration at the luxury department store Printemps, which opened its first US location in March with an emphasis on hospitality. Printemps America’s chief executive Thierry Prevost said that 50 percent of its customer base for fashion currently is a Gen-Z consumer. And beyond store events, food and beverage offerings, or accessibly priced products, what Prevost finds is resonating with that customer is being serviced by welcoming employees who are also willing to have real conversations about the product being sold.

“Every day we have training that isn’t focused on the selling ceremony but more about explaining why this product is this price, how it is made, and what is the story behind it,” said Prevost.

How Luxury’s Values Are Challenged by the Rise of Vintage

Prevost finds that Printemps’ Gen-Z customer is one that researches the product online and knows exactly what they’re looking for before shopping in-store. Generally, he believes what luxury customers value more today is true craftsmanship rather than the marketing of status symbols. That can come in the form of dresses and handbags costing thousands of dollars, but also handcrafted candles for $100 or a $230 pair of jeans made by one of France’s last denim mills.

Plenty of Gen-Z shoppers will say that luxury goods with those assets can easily be found secondhand, at a fraction of the price. Bartlett said she mostly buys luxury on The RealReal because it’s cheaper, finds the quality of vintage products to be better than what’s currently in-store, and enjoys hunting for unique finds. Boutilier similarly believes that apparel produced decades ago took more craftsmanship into consideration and is attracted to the history of vintage garments. When he does choose to buy newer up-market brands, he prefers to wait for sales or purchase garments for below-retail at resale. And despite spending thousands on watches, White exclusively collects older models that were made in limited quantities that need to be hunted down.

“Something you have to hunt and find is a lot cooler to me and a very unique piece with some interesting patina only adds to the thrill,” said White.

Additionally, the inherently sustainable nature of buying vintage or secondhand clothing aligns with how Gen Z’s purchasing decisions are guided by value alignment — even if the hunt for value led many of them to buy fast fashion by Shein at one point.

“Gen Z would be willing to pay a bit more for a brand that closely aligns with their values as a person, as a human, than necessarily grabbing the best deal,” said Patterson of Clarkston Consulting.

Why Traditional Luxury Marketing Fails to Connect With Digital Natives

Resale giant eBay has been a major beneficiary of Gen Z’s vintage obsession, with small luxuries such as brooches and statement pieces such as embellished handbags selling well, said Alexis Hoopes, the platform’s vice president global head of fashion. What’s also been working for eBay is live shopping. On eBay’s last earnings call, chief executive Jamie Iannone mentioned that eBay Live, which has recently explored partnerships with television shows beloved by Gen Z like "Love Island," witnessed “accelerating contributions” from luxury watches, jewellery, handbags and pre-loved apparel.

The aesthetics of live shopping, where the lively personality of a sellers can engage buyers to make purchases or bid on auctions in real-time, stands in sharp contrast to luxury’s traditional, polished marketing. But it breaks through with a generation of digital natives that grew up idolising YouTubers and Twitch streamers. Grace Andrews, a 28-year-old social media and Gen-Z content consultant, believes that marketing that doubles as entertainment is the most important factor in driving Gen-Z purchasing decisions.

“They’re so programmed to be entertained, so if they’re not entertained they’re out,” said Andrews.

With additional reporting by Simone Stern Carbone.