Uncovering Gen Z’s new ways of luxury

Luxury continues to flourish as a booming industry in 2023, building upon a successful 2022. According to latest projections, the luxury market is poised to surge to a staggering 305 billion euros this year. Such growth comes as no shock, given that luxury brands have made an indelible global impact. Iconic names, including Gucci, Prada, Louis Vuitton, and Dior, have orchestrated a real frenzy in the market.

From bags, watches, and shoes, to supercars, water villas, famed Airbnbs, and Michelin star experience, the idea of owning and experiencing luxury and opulence is something many continue to chase. This impression is governed by certain key factors:

• A signal of social status and success
• Personal style
• Celebrities and social media influencers
• Craftsmanship
• Brand image and narrative
• Digital presence
• Customer experience
• Trends
• Exclusivity

However, Gen Zers pose a significant challenge to luxury brands with their fast-changing perception and staunch opinions about luxury.

Where do Gen Z’s interests lie?

According to Ernst & Young, Gen Z has three unique behaviors - 

• Reliance on digital channels to interact, meet, and connect with others is completely natural for them. 
• Gen Z prioritizes and craves authenticity and ranks as their most important value.
• Gen Z has been raised in a time when there is an open dialogue around mental health.

The luxury industry has very conventional values like Uniqueness, Tradition, and Personalization which don’t strike a chord with the newer generations. Gen Z values experiences and meaningful moments rather than purchasing or owning materialistic things. They are concerned about the environment and want a better, sustainable world. As natives of the digital world, they value experiences in the digital space. Most importantly, they crave authenticity and timelessness. 

Discovering New Ways of Luxury

The challenges in piquing the interest of younger generations and appealing to them are resulting in a missed opportunity costing the luxury industry millions. We analyzed 16,000+ articles, across 14 countries that garnered more than 193M visits in the past 12 months, and compiled research that can help luxury brands identify the best areas they should capitalize on. 

Using our proprietary Network level analysis and Custom AI technologies, we analyzed the articles published in Seedtag’s Global Publisher Network to understand the most relevant articles and trends for Luxury and Gen Z. 

Territory one: Experiences 

The Experiences territory comprises luxury content that focuses on activities instead of possessions. This includes travel content, restaurants, concerts, adventures, museums, and night plans. 

The main experiences portrayed in the content are Fine Dining, Luxury Hotels, and Wellness Travel, all interlinked, including nature, wellness, and luxuriousness.

The opportunity

With Experiences, the opportunity lies in talking about natural, green experiences that establish a connection between people and Mother Earth, and enhance wellness. The key topics of interest are Wellness, Ethical, and Green. Content related to experiences has a +65% affinity with luxury. 

The Environment territory includes all articles related to protecting and enjoying mother nature. Organic beauty products, exotic eco-friendly resorts, green vehicles, and timeless fashion created using recycled materials are some areas that garner interest among Gen Zers. 

The main associations with this topic are nature stays and accommodations surrounded by nature.

The opportunity

In the Environment territory, rather than focusing on anti-pollution initiatives, what holds more value for Gen Z is authenticity and showing them how they can get closer to nature. Content related to the environment has a +52% affinity with luxury. The key topics here are Nature, Organic, and Vegan. 

Gen Zers are digital natives who are very used to the remote way of life. They prefer to use their smartphones and laptops and enjoy the fact that they can access what they need without having to go to a place physically.

Gen Z values experiences that happen in the digital world and expects brands to meet them there. Luxury and the Digital World find common ground in Fashion with the highlights being sustainable and second-hand luxury fashion, and AR/VR customized experiences in Travel and Art. 

The opportunity

Content related to the Digital World has a +31% affinity with luxury and the key topics are Accessories, Customization, and AR/VR. Topics like Augmented Reality in Travel and Art have a strong presence as they offer users the ability to preview things before they buy.

Gen Z seeks genuineness and aspires to go back to the roots, find meaning, and build a connection. Timelessness, authenticity, and sustainability are deeply valued and appreciated by Gen Zers. 

The opportunity

Articles that cover iconic luxury fashion pieces and accessories thus strike a chord. Gen Z wants to stay connected with brands and go beyond a one-time collection relationship. Content related to timelessness has a whopping +160% affinity with luxury and the key topics of interest include Vintage, Second-hand, and Sustainability.

What impact can these territories deliver for luxury brands?

Real-world results 

Gen Z presents luxury brands with a massive opportunity to rethink their communication strategy rather than radically transform their approach to engage with their audience segment. We tested this audience with our sociodemographic predictive models against a general luxury audience to show luxury brands why they must consider creating a strategy and messaging that appeals to the line of interest of this audience segment.

1.5x more population below 24 years than traditional luxury

1.23x more population below 34 years than traditional luxury

1.9x more male population than general luxury

For more details about the research, Seedtag’s defined territories, and detailed insights into Gen Z preferences, visit our full research.