Gen Z luxury consumers value experience over product: report

Dive Brief:

• Today’s luxury consumer — particularly Gen Z —  is as interested in the experience of luxury shopping as in the product itself, according to a recent survey conducted by Dotdash Meredith and market research firm Ipsos.  
• The May survey of more than 1,500 U.S. adults aged 18 to 65 found that style is the most common entry point into luxury, with nearly 1 in 5 respondents reporting that their first experience in the sector was style-related, with food and wine, beauty and travel categories following.
• According to the report, Gen Z is “redefining the very essence of luxury” by striving more for self narration than material possessions.

Dive Insight:

For many respondents, luxury is more associated with how they feel about the experience than how much they spend, according to the report. Much of that is attributed to a younger, more diverse group of consumers, including Gen Z.

“The luxury market is broader, more inclusive, and more accessible than it’s ever been,” Leah Wyar, president of entertainment, beauty and style at Dotdash Meredith said in an email to Fashion Dive. “New luxury consumers who are younger and more diverse are changing the very definition of what luxury means, placing a priority on how something makes you feel — including the shopping and customer service experiences — over how much something costs.”

The survey results suggest a significant change in the way luxury is perceived and may alter the landscape of how companies and brands are marketed in the future, per the report.

“A big focus of this research was in understanding how consumers define luxury themselves,” a Dotdash Meredith spokesperson said in an email. “That is where we get the stat that something feeling expensive is more associated with consumers’ definition of luxury than something being expensive.”

The survey listed 25 attributes that respondents might use to define luxury or prestige products, services, or experiences when making a purchase. Expensiveness ranked 13th place for Gen Z, with more customers in that demographic reporting that they cared more about whether a product felt expensive than how much it cost.

Of the 40% of respondents who had made at least one luxury style purchase over the past year, 63% were Gen Z consumers. 

“For GenZers in particular who enter the category through beauty, a luxury purchase is driven by self-expression and unboxing moments, and is often done to showcase an accomplishment, not as a status symbol, which we know was true for generations,” said Wyar. “That’s a valuable takeaway for brands across the fashion and beauty industries who want to connect with this growing sector of the luxury market when thinking about social media campaigns, customer service, and more.”