The Gen Z cohort, born between 1998 and 2012, is increasingly shaping the global luxury industry. While accounting for just 4% of luxury spending before the pandemic, they are projected to represent 25% by 2030, according to the Boston Consulting Group.
Industry executives and analysts note that Gen Z is harder to categorise than previous generations. Influenced by a global social media landscape, members of the cohort mix established luxury names with trendier labels, shopping across platforms ranging from TikTok to thrift stores. In response, legacy brands have employed influencers, pop-up shops, and smaller, affordable items such as bag charms to attract younger consumers.
Scott Roe, chief financial officer and chief operating officer of Tapestry, the parent company of Coach, said Gen Z exhibits similar behaviours in cities such as Shanghai, Los Angeles, and London. He added that although the generation is not less brand-loyal than others, reaching these consumers is challenging due to the abundance of choices, meaning brands require a strong “share of voice” to engage effectively.
More accessible luxury brands, including Coach and Ralph Lauren — whose revenue rose 6.8% in the 12 months to March — are capitalising on this generational shift. Coach, for instance, has increased marketing spend from 3% of sales pre-pandemic to 10% this year, focusing on influencer campaigns, personalised services, and sustainability initiatives. Total revenue for Coach rose 9.9% to approximately $5.6 billion in the 12 months to June.
Smaller labels are also targeting Gen Z. Hillary Taymour, creative director of Collina Strada, said the brand began engaging Gen Z with digital advertising in 2020, and that younger consumers now account for 58% of its business. She highlighted that the brand’s combination of sustainability, playful aesthetics, inclusive casting, and diverse runway shows helps younger audiences feel part of a community.
Traditional luxury brands continue to perform strongly among younger consumers. Miu Miu, owned by Prada Group, currently ranks first on the Lyst Index, followed by LVMH’s Loewe. Achim Berg, founder of industry think tank FashionSIGHTS, noted that brands such as Miu Miu succeed because single items allow Gen Z consumers to engage with the brand without committing to a full ensemble.
However, not all established labels have fared well. Gucci, part of Kering, saw sales fall 25% in the second quarter and recently replaced CEO Stefano Cantino after nine months. Data from Gen Z researcher dcdx showed Gucci experienced the sharpest social media decline among leading luxury brands over the past year. Frederica Levato, senior partner at Bain & Company, observed that “legacy brands are splitting into clear winners and losers.”
Looking ahead, Chinese brands such as Uma Wang and Shushu/Tong could emerge as key players globally. Chanel CEO Leena Nair said at The Economic Club of New York on 16th September that newer Chinese companies are gaining traction among younger shoppers due to their digital fluency and ability to capture national identity. She added that maintaining relevance and modernity is essential for long-term brand longevity.
