Luxury brands face a generational test with Gen Z consumers

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 accounted for 4% of global luxury spending before the pandemic; by 2030, they are expected to account for 25%, according to the Boston Consulting Group.

Executives, consultants, and analysts say this generation is harder to pin down than their predecessors. Influenced by a global social media landscape, they tend to mix and match goods from established names with trendier labels, shopping everywhere from TikTok to thrift stores. Legacy brands attempting to attract Gen Z consumers have utilized influencers, pop-up shops, and affordable items, such as bag charms, to appeal to this demographic.

“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, such as Coach and Ralph Lauren — whose revenue rose 6.8% in the 12 months ended in March — are capitalizing on the generational shift. Coach has gained cachet among Gen Z by utilizing influencers, offering personalized services, and prioritizing sustainability, according to experts.

Coach’s total revenue rose 9.9% to about $5.6 billion for the 12 months 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 — although it did not disclose how much was specifically targeted at Gen Z.

Brands are contending with upstarts and smaller established labels, such as 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 the hottest luxury brands. Lyst, a global fashion shopping platform, tracks the behavior and social media engagement of more than 160 million users on its site and is considered 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 perform well with Gen Z. 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 attract younger luxury shoppers, who are still more budget-conscious than their older counterparts. 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, compared 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. 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, according to Chanel CEO Leena Nair, who spoke at The Economic Club of New York on September 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.