The luxury market’s betrayal of Gen Z
In 2022, Gen Z and Millennials accounted for the entirety of the luxury market’s growth.
The latest data, however, shows something of an exodus of younger buyers: Around 50m customers – about an eighth of the base – left the market last year, “in particular” the younger ones, according to Bain’s latest luxury report.
A lot of this is straightforward economics – luxury products have become much more expensive after 2022’s boom, pricing out aspirational buyers from the market.
But luxury companies aren’t just pricing younger buyers out. “They’re focusing on top customers that, by definition, cannot be Gen Z, and many times they are not even the parents of the Gen Z,” Federica Levato, luxury analyst at Bain, said.
“This has alienated Gen Z from luxury because they felt betrayed,” Levato added.
Brands have doubled down on their highest spenders, focusing on experience-based shopping and targeted marketing.
“[Gen Z feel] that these brands are not talking to them, they are not relevant for these brands… the human relationship they had with these brands is somehow broken, and they cannot find any products that are related to them,” Levato said.
Spending has instead been redirected to beauty – particularly brands personified by celebrity backing – sportswear, and second-hand goods.
Resale now accounts for nearly a third of luxury handbag sales, while the EU’s second-hand market is set to more than double in size by 2033.
Dupe content on social surged 10-fold in early 2025, with 70 per cent of Gen Z admitting to sometimes or always buying dupes.
This isn’t necessarily a bad thing – for Gen Z or the planet – but it does leave luxury brands in a pickle: What happens if the market alienates its next generation of spenders, and will they come back when disposable incomes rise?
“It is a risk for the whole industry, for sure… and it’s not only Gen Z, it’s all the aspirational customers,” Levato said.
“If we want this inventory to live for the next 20 years, we need new blood… otherwise the happy few are redirecting their spending elsewhere,” she added.
What makes a product valuable?
Luxury and elitism go hand in hand. Lovato calls it “almost necessary” for the experience.
The classic brands have signaled this elitism through quality, exclusivity and price. But Lovato says that if luxury brands want to win younger customers back, they have to look somewhere else, too: Identity and storytelling.
“[Successful brands] communicate what you can achieve, or what you can become, or what you can unleash about yourself thanks to… their products,” Levato said.
“It’s not about… let’s buy a bag because it’s beautiful, because it’s artisanal, etc. [It’s about] an emotional attachment to it and an inspirational take on it.”
Somewhat paradoxically, social media has become the key place to find successfully examples of this kind of marketing.
Micro-influencers, for example, are in high demand for their significant personal sway over small audiences.
“Credibility is built in the comments section and the path to purchase now runs through creators, conversations and community insight,” Kristina Karassoulis, UK head of luxury at Tiktok, said.
“What drives luxury purchases today isn’t polish [but] proof,” Karassoulis added.
If luxury brands want to bring younger customers back to luxury, Levato said, they need to embrace a less “monolithic” digital presence and focus on a personalised message.
“Consumers are open to buying whatever has meaning for them… it can be big, it can be small, it can be new, something that they didn’t know.”
‘It’s not a recipe… it’s not like 2009 when bigger was better… it’s [still] an open market.”