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Gen Z's luxury spending to rise from 4% to 25% by

2030-Boston

Consulting Group

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Legacy brands struggle to adapt to Gen Z's unique

preferences

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Gen Z influenced by social media and mix-and-match fashion

trends

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Coach and Ralph Lauren ( RL ) capitalize on generational shift

By Samantha Marshak

NEW YORK, Sept 19 (Reuters) - Fleur Arbel and Christophe

Kairouz, both from France, were lured into Louis Vuitton's New

York flagship recently by a colorful sculpture of a monogrammed

giraffe and ostrich above the store's entrance.

But the two 24-year-olds are more likely to spend their

shopping dollars elsewhere, as Louis Vuitton's heavy logos and

styles strike them as passé.

"I think they failed to keep the luxury image in a way,"

said Kairouz. "I think they need to create something new,

original."

Arbel and Kairouz are a tiny fraction of the Gen Z cohort

born between 1998 and 2012: the luxury industry's new frontier.

The group made up 4% of global luxury spending before the

pandemic; by 2030, they will account for 25%, according to

Boston Consulting Group.

Executives, consultants, and analysts say this generation is

harder to pin down than their predecessors. They are influenced

by a global social media landscape and tend to mix-and-match

goods from established names with trendier labels, shopping

everywhere from TikTok to thrift stores. Legacy brands trying to

attract Gen Z consumers have used influencers, pop-up shops, and

affordable items like bag charms.

"There's a lot of similarity between Gen Z in Shanghai and Los

Angeles and London," said Scott Roe, chief financial officer and

chief operating officer of Coach-parent Tapestry.

More affordable luxury companies like Coach and Ralph Lauren ( RL )

- whose revenue rose 6.8% in the 12-month period ended

in March - are capitalizing on the generational shift. Coach has

gained cache with Gen Z due to using influencers,

personalization services, and focusing on sustainability,

experts said. Coach's total revenue rose 9.9% to about $5.6

billion for the 12-month period ended in June.

Tapestry's Roe said Gen Z is not less brand-loyal than other

generations, but it is harder for brands to reach these

consumers because shoppers have more choices. "To break through,

you need to have a strong share of voice."

That voice is pricey: Tapestry increased its marketing spend

from 3% of sales pre-pandemic to 10% this year, according to

its May earnings call, but did not disclose how much it targeted

Gen Z specifically.

Brands are contending with upstarts and smaller established

labels like Collina Strada and Mary-Kate and Ashley Olsen's The

Row, which climbed two spots to sixth place in the most recent

Lyst Index of hottest luxury brands. Lyst, a global fashion

shopping platform, tracks shopper behavior and social media

engagement for more than 160 million users on its site and is

the "biggest dataset in fashion," according to the company.

Hillary Taymour, creative director of Collina Strada, said

they started targeting Gen Z in 2020 with digital ads. Now, Gen

Z and Millennials account for 58% of its business. "It mixes

sustainability with a playful, meme-driven aesthetic," she said,

citing the brand's "inclusive casting and diverse runway shows"

that make younger audiences feel like part of a community.

AFFORDABLE ITEMS DRAW IN YOUNGER SHOPPERS

Not all fashion powerhouses are being left on the shelf.

Luxury labels from Kering-owned Bottega Veneta, Prada Group's

Miu Miu, and LVMH-owned Loewe continue to do well with Gen Z, as

Miu Miu currently ranks first on the Lyst Index, followed by

Loewe.

Miu Miu sales rose 49% in the first half of 2025 compared to the

same period in 2024, capturing first-time luxury buyers with

leather bag charms, which retail in the range of $240 to $1,250.

"Brands like Miu Miu succeeded because single pieces mirror the

brand identity, allowing Gen Z consumers to buy into the brand

without having to purchase a full look," said Achim Berg,

founder of FashionSIGHTS, an industry think-tank.

Less expensive items draw in younger luxury shoppers, who

are still more budget-conscious than their elders. In August,

spending among Gen Z and Millennials - those born after 1978 -

rose by just 0.5% from the previous year, according to Bank of

America, in comparison to a 2.4% increase for Baby Boomers.

"When I shop luxury, I think about 'what's going to last me

a long time?' I'm spending a lot of money on an item, I want

something I'm not going to get sick of in five or ten years,"

said Kendall Still, a 26-year-old Los Angeles native.

Some brands have struggled. Sales at Kering-owned

Gucci fell 25% in the second quarter, and the company ousted CEO

Stefano Cantino after just nine months on the job on Sept. 17.

Data from Gen Z researcher dcdx, which tracks mentions and

interactions with user-generated brand content, showed Gucci

suffered the sharpest decline on social media among top luxury

labels over the past year.

Over the last two years, Kering shares have lost 43% of

their value while Tapestry has more than tripled. Gucci did not

respond to a request for comment.

"Legacy brands are splitting into clear winners and losers,"

said Frederica Levato, senior partner at Bain & Company.

The next players to emerge globally could be Chinese brands

like Uma Wang and Shushu/Tong. In Asia, newer Chinese companies

are gaining traction with younger shoppers, due to their digital

fluency and ability to capture China's national identity, Chanel

CEO Leena Nair said at The Economic Club of New York on Sept.

16.

"You cannot take the longevity of a brand for granted; you

stay in the public consciousness and you have the iconicity

because you're relevant and timely, and constantly modern," she

said.