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Generation Z likes to spend, though not in the same ways as its predecessors. Born between 1997 and 2010, this post-millennial demographic is projected to have significant luxury purchasing power, which will continue to grow as more of the cohort enter the workplace. In the US alone, their estimated spending currently equates to $360 billion, and is anticipated to account for 25 to 30 per cent of all luxury purchases by 2030, according to Bain, as they become more financially independent.
While millennials are digital migrants, Gen Zs are digital natives. The oldest Gen Z was barely 10 years old when the iPhone launched in 2007, heralding a new era of constant connectivity. The explosion of digital touchpoints in the years that followed resulted in a complex customer decision-making journey, prompted mostly by Gen Z’s unbreakable bond with technology — and more importantly, social media.
As the largest demographic among the world’s largest economies (the US, China, Germany and Japan), Vogue Business and Snapchat surveyed 755 luxury consumers in the US aged between 16 and 25, to understand what makes this emerging consumer group tick.
The findings examine how luxury brands can capture Gen Z loyalty through experiential retail, immersive digital experiences and emotional connection. Humans are hardwired for connection, and Gen Zs express this through their ingrained use of social media. While it’s well documented that Gen Z is persistently online, 71 per cent of respondents spend up to 20 per cent of their free time outside of study or work on social media, per the data, with 89 per cent using Snapchat specifically. For brands, understanding this consumer group’s non-linear decision-making journey is essential for brand reach as well as informing omnichannel strategies.
For Gen Z, the linear marketing funnel has become almost obsolete in the digital age, as consumers investigate and add more brands and products to their initial consideration set based on brand image and exposure at various touchpoints of their purchasing journey. Gen Z enjoys the information-gathering stage, and the survey reveals that shopping is a favourite pastime, with the majority (89 per cent) of respondents spending up to a fifth of their leisure time on this activity.
Emotional attachments form the basis of brand love, a marketing construct that goes beyond mere liking to involve emotional relationships. Peer-reviewed journal research links brand love to increased brand loyalty and positive word of mouth. For survey respondents, 57 per cent of Gen Zs say they’ll purchase from a brand they love, while almost the same percentage (58 per cent) will tell friends and family about the brand.
Snapchat differs from other social media platforms in that it is connection rather than likes driving its community feel. For Snapchat users, once an advert for a luxury brand or product on Snapchat piques their interest, 73 per cent of Snapchat users are compelled to explore the respective product online or in-store. The effect is felt throughout the decision-making journey: across the evaluation and consideration stages, 77 per cent of users are likely or very likely to visit a brand’s website or store, while in the conversion stage, 75 per cent admit to being likely or very likely to purchase after seeing an advert on the app.
Augmented reality Lenses and virtual try-ons are a digital form of experiential marketing defined as a strategic approach that seeks to create immersive and memorable experiences. Nyx Professional Makeup partnered with Arcadia, Snapchat’s Innovation Studio for augmented reality, to create an AR and AI-powered Lens called ‘Beauty Bestie’, offering personalised guidance and interaction with the brand. Through this type of immersion, value can be created in the act of consumption — not just via the product itself.
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Boilerplate: *Vogue Business surveyed 755 luxury consumers in the US in August 2024. Consumers were aged between 16 and 25, with 50 per cent of these under the age of 21. Respondents were luxury shoppers with a minimum spend of $1,000 across luxury and premium fashion and beauty over the last 12 months. Respondents were asked about their daily habits, shopping habits and path to purchase, and their economic situation.
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