By Isabel Tapp, Founder of Luxury Communications Council, GCC Chapter

Once reserved for the rich and famous, high-end luxury labels such as Chanel, Louis Vuitton and Hermes were historically out of reach for the average consumer.

But with more luxury brands and experiences on the market than ever before, and the wide  exposure of social media, the luxury market is becoming more accessible than ever, especially to younger consumers. There is no one-size-fits-all luxury customer anymore.

According to a Report by Bain and Company, the spending power of Gen Z, and the even younger Gen Alpha, is set to grow three times faster than that of other generations by 2030, which means younger consumers will make up a third of the luxury market. The report also found that Gen Z tend to start buying luxury items at a younger age than millennials did.

With this is mind, heritage brands can no longer rely solely on their history and prestigious name to generate sales. They must tap into Gen Z behaviours and desires, and above all, stay relevant.

Embracing technology and augmented reality in the fashion world

Whether it’s shopping in the metaverse, using NFTs or leveraging TikTok influencers - having a smart digital strategy is a must.

In 2021, Gucci used augmented reality (AR) to attract a much younger audience. They did this by launching a pair of virtual sneakers, The Virtual Gucci 25, which could be worn by users in AR, as well as on online gaming platform Robolox. With a much cheaper price point, they were more accessible to a Gen Z audience and the campaign created a huge buzz across social channels. 

Another brand using AR technology to enhance its online shopping experience is Dior, who has created a catalogue of virtual products that shoppers can view and try on via Snapchat.

The age of influence

Gen Z is the first generation who has never known a world without the internet. They grew up in the era of the iPhone, with social media intrinsically woven into their everyday life. They look to online content and people they respect to inspire their purchases, and this has given rise to a powerful set of social media influencers. In fact, according to a report by McKinsey, the influencer marketing economy was valued at $21.1 billion in 2023.

Celebrities have always been seen on television adverts and billboards promoting high end labels, but in the age of the influencer, collaborations are an even bigger part of sales and marketing strategies. Luxury heritage brands must consider who they want to work with and more importantly, find clever ways to let them tell their story. 

Pre-owned and sustainability

Gen Z have developed a love for old luxury and a growing desire for vintage. Brand storytelling, authenticity and sustainability are important values to them, and many brands are using this to create their own second-hand experiences and circular economies. Rolex, for example, now runs its own pre-owned programme, which gives it some control over the popular second-hand watch market, as well as helping to maintain the brand’s reputation.

Balancing human interaction and technology in hospitality

With constant exposure to travel content across social media, Gen Z expects hotels to provide personalised experiences and for technology to be seamlessly integrated into their stay. The hospitality world has responded by introducing apps and chat features to complement human interaction.

Gen Z are also more likely to look for hidden gems when it comes to destinations, and they place value on sustainable travel practices. From hotels with long histories such as The Ritz, The Savoy and Grosvenor House, to more modern brands like W and SO/ hotels, a hospitality brand must tell its story and values to appeal to Gen Z travellers.