Millennials, Gen Z and Gen Alpha, luxury’s biggest consumers by 2030: the world’s youngest demographics are investing in Chanel handbags and splurging on ‘post-streetwear’, gender-fluid fashion

Feb 7 , 2023

Generation Y, Z and Alpha consumers are not afraid to splurge when it comes to luxury – and their luxury bills are only expected to get bigger.

Dior collection of bags in a shopping centre in Munich, Germany, in April 2019. Photo: Shutterstock

The luxury market’s consumer base will reach 500 million by 2030, according to a report by Bain & Company published on January 17. Bain’s study is based on information and data provided by the Fondazione Altagamma, an Italian luxury goods body with over 280 luxury companies as members.

The lion’s share of those luxury purchases will be made by the youngest consumers globally, per the report: Generations Y, Z and Alpha will become the biggest luxury buyers by 2030, accounting for at least 80 per cent of global purchases.

Shoppers line up to visit a luxury retail store at a shopping centre in Shanghai, China, in May 2022. Photo: AP Photo

Millennials born between 1980 to 1994 are dubbed Generation Y, whereas Generation Z refers to those born between 1995 and 2009. Those born after 2010 are part of Generation Alpha.

Not only will they be the biggest spending group, but Generation Z’s and Generation Alpha’s spending is also slated to grow three times faster than other generations by 2030, occupying a third of the luxury market. This is a reflection of the generation’s “precocious attitude toward luxury”, the Bain report states.

Which luxury brands will launch BTS members as their global ambassadors next?

These shifting trends have already become noticeable

Tourists shopping on Canton Road, Tsim Sha Tsui, Hong Kong. Photo: Dickson Lee

Insider reported in December that a vast number of young Americans between the ages of 18 and 29 are opting to live with their parents – at a level not seen since the Great Depression era – which is likely freeing up disposable income for luxury spending. Insider also looked at the spending habits of the youth and spoke to 20-somethings who live at home and splash out on cars, designer handbags and nightclubs.

These habits could also be a result of the booming luxury resale market, where Generation Y, Z and Alpha are treating luxury goods as valuable investments.

A Chanel leather bag. Photo: Inez and Vinoodh

For example, a Chanel Medium Classic Flap bag was sold at an average of US$3,900 in 2011, based on data compiled by Nasdaq. A decade later, the value skyrocketed to an average of US$7,800. A bag bought in 2011 could have yielded a 200 per cent return on investment in 2021.

Drawing parallels to the S&P 500 index, a dollar invested in 2011 could net a return of around 149 per cent in 2021, showing that certain luxury goods are not just a fashion investment for self-indulgence, but they have the potential to be profitable financial investments.

7 handbags named after famous female icons, from Princess Diana to Selena Gomez

Apparel led the growth within personal luxury goods sales in 2022

A woman walks through a shopping centre carrying plenty of purchases. Photo: Shutterstock

Personal luxury goods had a good performance last year, with apparel leading the growth within the sector, the Bain report states.

Generation Y, Z and Alpha are spending more on luxury apparel because of the “post-streetwear” phenomenon. Some elements of post-streetwear include gender-fluidity, inclusiveness and disregard for the occasion. Instead of focusing on what’s on trend, younger consumers are more concerned about the techniques, materials and functions of apparel, per the Bain report.

Balenciaga Birkenstock-like shoes, available at Net-a-Porter. Photo: Handout

Bain notes a record growth in luxury shoes, where Generation Y, Z and Alpha are not splurging on the iconic Nike Air Jordan 1 trainers, but instead making purchases in Birkenstock-looking shoes – formerly known as “fussbett sandals”. These sandals typically have a raised platform sole that’s made of lightweight material, and it has straps or buckles to secure your feet.

Bain also said the luxury market will be shifting away from traditional business models to virtual shopping experiences such as Web 3.0 and the metaverse. This is expected to make luxury goods much more accessible and bolster sales to Generation Y, Z and Alpha consumers.

This article originally appeared on Insider

Want more stories like this? Follow STYLE on Facebook, Instagram, YouTube and Twitter.

Fashion

According to a new study by Bain & Company, the luxury market’s consumer base will reach 500 million by 2030 – with the world’s youngest consumers making 80 per cent of purchases
Web 3.0 and the metaverse are sure to draw in more Gen Y, Z and Alpha buyers, who aren’t shy to splurge … but go for Birkenstock-like ‘fussbett sandals’ over Nike sneakers