Luxury goods, Gen Z, and millennials - statistics & facts
Wage earning young consumers are the backbone of the economic machine. Recognizing their lifestyle aspirations and economic potential, many industry sectors and services target this demographic. For the personal luxury goods sector, the driving force are millennials, also known as Generation Y, who currently make up the 45 percent of luxury goods spending worldwide. This corresponds to a market value of over 160 billion euros. As their impact in the workforce grows, Gen Z is also becoming a decisive demographic in this market, accounting for 20 percent of the total expenditure attributed to their purchases.
Similarly, among Asian consumers, particularly in China, luxury incumbents such as Chanel, Hermès, and Dior have retained their popularity with younger cohorts. A similar trend has emerged among South Korean consumers aged 16-24 and 25-34.
Overall, social media both as a shopping channel and a source of inspiration is gaining traction among luxury shoppers thanks to Gen Z and millennial consumers. Worldwide, a quarter of young consumers aged 18-39 have made purchases via social media, while over 40 percent of them follow an influencer. In North America, more than 30 percent of young consumers reported purchasing luxury goods or services through social media. Similarly, in Europe, younger luxury shoppers were more open to social media purchases compared to those aged 40 and above.
Which brands are standing out for Gen Z and millennials?
The three cornerstone brands of the luxury goods industry remain relevant to Gen Z and millennial consumers. Gucci, Louis Vuitton, and Dior were the top three brands favored by U.S. consumers in these age groups. One brand that stood out for millennials but did not resonate as strongly with Gen Z was Armani: while only 22 percent of Gen Z consumers expressed a liking for the brand, nearly 40 percent of millennials did. Among both U.S. and UK Gen Z members, the British designer brand Vivienne Westwood emerged as a notable brand, resonating with nearly one-third of Gen Z consumers.Similarly, among Asian consumers, particularly in China, luxury incumbents such as Chanel, Hermès, and Dior have retained their popularity with younger cohorts. A similar trend has emerged among South Korean consumers aged 16-24 and 25-34.
Purchase channels and social media interactions
As digital natives born into the advent of the internet, interacting, following, and making purchases online come naturally to Gen Z and millennials. The luxury goods industry adopted online shopping later than mainstream consumer sectors, as it traditionally relies on clientelism and in-person customer experiences. However, as more platforms become available for consumers and social media presence becomes vital to many companies' marketing strategies, customer engagement with the online world has also increased.Overall, social media both as a shopping channel and a source of inspiration is gaining traction among luxury shoppers thanks to Gen Z and millennial consumers. Worldwide, a quarter of young consumers aged 18-39 have made purchases via social media, while over 40 percent of them follow an influencer. In North America, more than 30 percent of young consumers reported purchasing luxury goods or services through social media. Similarly, in Europe, younger luxury shoppers were more open to social media purchases compared to those aged 40 and above.
