Luxury consumers are constantly evolving, forcing brands to keep up with changing purchasing habits. #Market Outlook for the second half of 2024#

According to Bain & Company's 2024 report, Generation Z consumers (those born between 1997 and 2012) will account for nearly one-third of luxury purchases by 2030, while Millennials (those born between 1981 and 1996) will account for over half of luxury purchases.

According to Piper Sandler's predictions, Generation Z will become the largest and wealthiest generation and may drive the growth of luxury goods sales in retail, tourism, and technology industries.

Jason Dorsey, a Generation Z researcher and author of the book "Zconomy: How Gen Z Will Change the Future of Business," stated in an interview with Yahoo Finance that, "Generation Z is rapidly emerging as the fastest-growing new generation in the luxury goods market due to being in their early adulthood. Although their purchasing power is still lower than other generations, it will increase over time. The earlier brands establish a connection with them, the more opportunity to grow together with this generation."

The changing behavior of luxury consumers may bring new challenges to luxury brands.

Morning Consult's retail and e-commerce analyst Claire Tassin surveyed 2,203 American adults to better understand the habits of luxury consumers. The survey found that current luxury consumers are "fickle buyers" who desire "exquisitely crafted products, first-class travel experiences, and gourmet food with rare ingredients."

The survey also found that quality is the most important attribute in the luxury shopping experience among all American adults. Tassin stated, "Consumers may not always believe luxury goods are worth the price, but when they do, quality is the deciding factor."

She told Yahoo Finance that she is concerned about brands that rely solely on brand status and mythology for transactions, noting that Generation Z consumers are not as brand loyal as older consumers.

Dorsey explained that Gen Z consumers may remain loyal to brands that they perceive as part of their identity, but may not be as loyal to other brands, especially when they are trying to keep up with trends. According to McKinsey researchers, in surveys conducted in the USA and the United Kingdom, over 50% of Gen Z respondents indicated that they would switch from their favorite brand if they found another brand that is cheaper or of higher quality.

You can see this loyalty from Lululemon to TikTok, as well as the fickleness of brands that become popular in an instant but quickly disappear," Dorsey wrote.

Although young consumers emphasize authenticity in luxury purchases and experiences, the pursuit of ideal purchasing motivations still plays a critical role in driving value.

Tassin said, "There is a great demand for luxury goods from those who are not in the super-elite 1%. Therefore, striking a balance between serving traditional luxury consumers and catering to luxury consumers with more idealistic pursuits, especially when considering Gen Z, is a major challenge that brands currently face."

She added, "Whether you can keep up with trends and still maintain tradition and essence, it is an ongoing tug of war, which I think is difficult for any brand, especially for luxury brands."

According to Bain & Company's forecast, overall luxury spending is expected to increase from the current approximately 1.5 trillion euros to 2.5 trillion euros by 2030, giving brands ample reason to achieve this balance.

Dorsey stated, "The key to our research is for brands not to take Gen Z for granted and not to assume that they have less information simply because they are young, but to pay attention to their diversity, inclusivity, sources of information, reliable trend resources, and their desire for connection."