According to a recent study conducted by payment services company Klarna, Millennials and Gen Z are increasingly embracing luxury items, surpassing older generations in their purchases. The report reveals that 63% of Gen Zers and millennials bought luxury items in the past year, compared to 45% of Gen Xers and 25% of Baby Boomers. This change in consumer behavior has prompted luxury brands to prioritize digital innovation and sustainability in order to meet the expectations of these younger buyers.
The COVID-19 pandemic has accelerated the shift towards digital channels, causing luxury brands to recognize the importance of catering to the preferences of younger generations. The study titled “The State of Smooth: Unpacking Luxury in 2022” highlights that 80% of luxury consumers consider a brand’s commitment to technology and innovation as a crucial factor during the purchasing process. Additionally, over a third of these consumers prefer using mobile apps to make luxury purchases online.
Maintaining a strong presence on social media platforms has also proven valuable for luxury brands, as these platforms are effective in capturing the attention of Gen Zers and millennials. The report states that 83% of Gen Z consumers and nearly two-thirds of millennials follow luxury brands on social networks. Moreover, 75% and 63% respectively claim to have made purchases after discovering products on platforms like YouTube and TikTok.
The emergence of the metaverse, a virtual reality space where users can engage in various activities, is further shaping the purchasing behavior of younger luxury consumers. Six out of ten respondents who are aware of the metaverse expressed interest in buying luxury goods through this new channel. Additionally, virtual fitting rooms are gaining popularity, with 22% of respondents expressing interest in using them to try on products from the comfort of their homes.
Interestingly, sustainability is playing an increasingly important role for luxury consumers. The survey revealed that 59% of respondents believe their luxury purchases are more sustainable, and over four out of ten perceive luxury items as offering long-term savings due to their quality. Gen Z in particular has adopted a “buy-less, buy-better” mindset, placing value on the quality of products rather than quantity.
In conclusion, the study highlights the changing preferences of younger generations in the luxury market. Luxury brands are adapting to these changes by prioritizing technology, social media presence, and sustainability initiatives. By catering to the needs and expectations of millennials and Gen Z, luxury brands can secure their position in the ever-evolving luxury landscape.
Useful links:
1. How the Pandemic Accelerated Digitalization in the Luxury Sector
2. The Future of Luxury is Digital
