Gen Z and the Future of Luxury Consumption

Few consumers are as misunderstood, or as fretted over, as Gen Z. Especially in the context of luxury, the question seems to be, are young people still buying? Are they rejecting luxury in its traditional sense?

Gen Z has not lost its taste for luxury, but the spending is migrating elsewhere than the obvious logos and designer goods to narrative-driven products and experiences.

In this article, we examine how Gen Z is redefining what luxury means, how this attitude shift is affecting the luxury goods industry and the adjacent resale market, how luxury hospitality is affected, and what all of the above means for brands and operators that are hoping to stay relevant and speak to younger generations.

Why Gen Z luxury consumption is changing

Luxury, a historically lucrative and ever-growing market, has had what you could call a sobering year.

The personal luxury goods market (which encompasses categories such as apparel, leather goods, eyewear, watches, and jewelry) is for the first time ever declining in size and losing millions of buyers. The market was valued at $408 billion in 2025, down from $421 billion in 2023 and $415 billion in 2024.

The number of luxury buyers has also significantly shrunk, and only around 40 to 45% of potential luxury consumers ended up buying anything in 2025, down from about 60% in 2022.

It is mostly mid-tier buyers who have now stepped away from spending due to the disparity between the perceived value of luxury goods and their prices, and an overall disillusionment with luxury goods.

Designer bags, for instance, have increased in price between 50 and 70% from 2019 to 2025, but product newness has fallen sharply over the same period. 70% of luxury shoppers said they were dissatisfied with the in-store experience, and 90% felt the experience was much the same from one brand to the next.

Gen Z are getting a very different image of a market that used to be associated with craftsmanship and exclusivity. The price-to-value ratio of luxury goods is much less defensible, and with replicas infiltrating the market, logos have lost their allure.

What does luxury mean to Gen Z?

For Gen Z, luxury status signals look very different from what they did to earlier generations. Individuality and authenticity weigh a lot more on the scale than conspicuous logos, and the latter can even read as try-hard to a generation that has grown up with climate anxiety and economic instability.

How does Gen Z signal status, then?

The culture publisher Highsnobiety has coined the term ‘status economy’ to contextualize what luxury looks like today. In the status economy, cultural credibility is not confined to wearing specific designers, because the products in our fridge or shower, and the places we frequent are equally important signals.

In their survey, 71% of respondents said that the food and drink they choose are an extension of their self-expression, which goes to show that the meaning of status and luxury has expanded.

Knowledge and taste are now expressed through choosing the ‘right’ olive oil or staying at the ‘right’ hotels instead of, say, the most recognizable ones.

Gen Z luxury consumer behavior

The Gen Z cohort is harder to win over, and also less loyal to the brands they end up consuming.

According to Bain, the generation’s expectations are much higher when it comes to relevance and authenticity, both of which are very hard statuses for any given brand to achieve and maneuver.

Moreover, heritage carries less significance compared to newness. The most Gen Z-loved brands in 2025 had taken a new approach with creative direction and offered something fresh that spoke to the moment in one way or another. Miu Miu did this particularly well, and was awarded with 40% growth.

Case study: Miu Miu Summer Reads

Miu Miu’s Summer Reads campaign that ran throughout 2024 and 2025 transformed public spaces into open-to-all outdoor libraries where visitors could collect classic books by female authors. The activation was a way for the brand to convey its values of creativity and intellectual curiosity.

The campaign particularly resonated with Gen Z because it focused on experiences over sales and, at the same time, created highly shareable, aesthetically appealing spaces for social media. Offering a meaningful cultural experience ended up being far more effective for Miu Miu compared to traditional advertising in terms of building a deeper connection with younger consumers.

Gen Z treats luxury as a tool for self-expression, and has an expanded idea of taste as a meaningful combination between archival and new, high and low, (and more than anything, personality) instead of entirely leaning on the haute.

An emphasis on experience

Gen Z consumer behavior is a perfect example of the experience economy in action.

In the experience economy, staged experiences take precedent over goods and services. Storytelling and the wow-factor are necessities for any product to be relevant for a generation that documents everything.

value climbs from goods to services to staged experiences, where the memory becomes the product. It explains Gen Z’s instinct neatly: a handbag depreciates the moment it leaves the store, while a trip or a meal appreciates every time it gets retold and reshared. The bag is a possession; the dinner is a story. For a generation that documents everything, the second is worth far more.

Gen Z and the luxury resale boom

The distinctiveness of the Gen Z approach to luxury is also apparent in its entry point. First-time designer purchases are now made in the resale market rather than boutiques.

According to a report by Thredup, resale has become the default entry point for Gen Z shoppers, and 45% say they do this in order to access higher-end brands. BCG estimates that up to 32% of Gen Z’s wardrobes are now secondhand, and that number rises to 45% for handbags.

The second-hand luxury market is growing three times faster than the primary market at a 10% growth rate, and by 2030, the wider global resale market is expected to reach $360 billion (vs. $220 billion in 2025).

The main reasons Gen Z reaches for the resale market for their luxury purchases are affordability (or the more accurate price-to-perceived value ratio created by the open market) and sustainability considerations. Furthermore, vintage or archival pieces can in many cases be more exclusive and allow for individual expression of taste.

Other macro trends affecting the Gen Z luxury consumer

Dupes, defined by the Fashion Law as “products that closely resemble more expensive or high-end items in appearance, performance, or scent but are available at a lower price,” have gone mainstream, which has affected the morale of luxury buyers. The availability of products that are appearance-wise near-identical to a shopper for a fraction of the price, it puts primary market luxury prices under question.

On the other hand, ‘underconsumption’ is trending as an aesthetic and lifestyle, where keeping and caring for what you already own is considered higher-status compared to buying the newest thing. An article by Vogue raises questions as to what extent underconsumption stems from financial and environmental considerations, and how much of it is performative.

Whatever the case may be, some luxury brands such as Gucci and Balenciaga have started treating resale as a channel amongst others by working directly with resale platforms or building their own re-commerce programs in efforts to stop the value-leak of luxury.

Gen Z luxury travel: experiences over objects

Gen Z and millennials are now leading US travel demand, and general demand is still growing.

Across the world, 52% of Gen Z travelers report taking more than 3 leisure trips a year, and 65% cite seeing the world as the most important way to spend their money.

Within travel, Gen Z prioritizes experiences over accommodation and has a tendency to book a cheaper flight and accommodation to instead spend on goods and activities at the destination. This is also reflected in how shopping and souvenirs are the first spending categories to be cut out before experiences when costs rise.

A preference for boutique and unconventional stays

American Express found that 91% of younger travelers want an unconventional place to stay. This could be luxury rail or boutique hotels in converted historical buildings.

The definition of a luxury hotel itself has changed, and Gen Z travelers are more likely to define a hotel with room comfort and amenities such as a spa and fitness center as luxury rather than a strict association with a brand name or fine dining. The brand flag of the property matters less for Gen Z travelers, again reflecting the wider phenomenon of dissipating brand loyalty.

Luxury in fragments and LARPing

All of this behavior shows that Gen Z has a fragmented approach to luxury consumption, and dabbles in it in different categories.

A 2026 trend that perfectly exemplifies this is LARPing, a term borrowed from live action role-playing, where young travelers buy into luxury in small ways to signal a luxury lifestyle.

As mentioned in this article, it could be having a single cocktail at an Aman or the Ritz to soak up the atmosphere and get the pictures, or ordering (and posting) a single dish at Nobu.

An integral part of this trend is sharing these fractional luxury experiences on social media to signal an aspirational life, or even outright stating in a self-ironical way that this is LARPing, openly performing a certain lifestyle.

The goal is to get the maximum gain (in most cases, social media views and engagement, or on the other hand, enjoyment and atmosphere) out of luxury without overinvesting.

What Gen Z means for luxury brands and hotels

Looking at the goods market and travel together, they clearly show that Gen Z has decoupled luxury from the logo and sees it as a convergence of experience and individuality; a modality for authenticity and self-expression.

For luxury goods brands, this means that pricing power has its limits, as this generation rewards newness and having a point of view over heritage alone. Resale partnerships and taking creative risk are strategic necessities.

For luxury hospitality, Gen Z are ready to spend, but want operators who deliver unique experiences and feeling. Name recognition is no longer enough, as distinctive places and interesting programming that prompts posting and sharing are more important.

Gen Z is a generation that wants to buy meaning, and if that means scouring through resale racks, hunting for archival pieces, booking the non-branded property, or vibing it out in lobby bars, then so be it.

Luxury, at the end of a day, is a feeling to be delivered, and the industry must lean into that if it wants to recoup its 20 million lost customers and get the younger generations on board.

Emma Näpänkangas – M.Sc. Student in Hospitality Management at EHL and Hospitality Strategy writer. Connect with Emma on LinkedIn.

Source: View the original article at EHL.