Why Gen Z Isn’t Buying Luxury’s Story

0:07Hello and welcome to The Debrief from the Business of Fashion, where each week we delve into our most popular BOF professional stories with the correspondents who created them. I'm executive editor Brian Baskin. And I'm senior correspondent Sheena Butler-Young. Nolan Daniel White is 24, deep into watches, and grew up owning Demna Era Balenciaga and Rick Owens Dunk sneakers. If he were 10 years older, he'd be on a first-name basis with luxury sales assistants. But instead, he can recall only one full-price in-store purchase, Gucci socks he bought for$80. The rest is resale, vintage, or on markdown.

0:43According to him and a lot of his Gen Z cohort, full price luxury just isn't really worth owning right now. Prices feel out of whack, boutiques feel stiff, and the marketing feels more like a billboard than a conversation. Gen Z is this new type of luxury customer. I mean, they're discovering trends on YouTube and TikTok. They shop with the swipe. They are definitely not impressed by a$2 ,000 quote unquote iconic canvas bag. And it's a real problem for luxury brands that I don't think they fully figured out. Today, we're joined by Lei Takanashi, who reported a story on this exact topic, and Jessica Kwan, our very own Gen Z editorial apprentice.

1:25Lei, Jessica, welcome to the Debrief podcast. Thanks for having me. Thank you so much, Brian. It's always a pleasure to come on. So Jessica, I'll start with you. We couldn't bring Nolan Daniel White on to talk about his Gucci socks. So I will just ask you, how many pairs of Gucci socks do you own? I'm inclined to say zero. My drawer is probably filled with a lot of Hanes undergarments. Nothing wrong with Hanes. Let's expand a bit, though, and talk about your relationship with luxury. Do you shop these brands at all? No, I don't shop luxury brands, at least not retail. You might not know that if you entered my closet and looked at some of the labels.

2:03I'm, you know, like most of my peers, shopping vintage and resale and at very heavy discounts. It sounds like you are, though. You're just not buying it from their stores at full price. And Leigh, that's exactly what your story is about, right? I mean, what made you realize this is more than just a few isolated Jessica's and Nolan's, and this was a generational change? Well, I really think the biggest signal to me that Gen Z is just extremely disinterested in luxury. It's just this rise in vintage that Jessica speaks about, that Lauren speaks about, that really a lot of just people are speaking about right now.

2:40I mean, every young person I interview for this story about Gen Z's relationship with luxury, like they all express that they buy every single piece of clothing in their closet through secondhand platforms like the real, real. I think it's interesting, too. Even data from consultancies like Bain show that. Last year, they reported that used luxury goods is outpacing the sales of new luxury goods. So I think that's personally the biggest signal. And it's something that I personally align with, too. I would say nearly my entire closet is secondhand. I don't really buy retail at all. But to be clear, Leigh, you're not Gen Z, right?

3:14You're actually solidly millennial, yeah? Yeah, yeah. I'm on the cusp, I guess, kind of in between those two groups. But yeah. This is like the only episode of the debrief that we're all going to be comfortably discussing our ages at this moment. But Brian, I'm curious because a lot of what Jessica just said resonates with me when I was in my 20s. Like, how much of this is just age, really? Like, did you buy something luxury in your 20s? Do you remember your first luxury purchase? Were you 21 strolling into the Louis Vuitton flagship and just purchasing or? I definitely wasn't. I think at 21, I would have been afraid to set foot in the Louis Vuitton flagship, which actually is something I think we'll get to later.

3:50I think that's still kind of a problem for these brands. I've never been a big luxury shopper. My habits are probably similar to Jessica's and Lay's, where if I'm going to buy something super expensive, I'm probably going to look for it on sale or from a resale site or vintage. I'm one of those people who grew up raised never to pay full price for anything. And it's hard to break those habits. Well, so I think that's the next natural question that is when Gen Z says it's not worth it, right? There is a cohort or a subset of Gen Z that can afford luxury, but by and large, you're saying it's not worth it right now.

4:26Leigh, in your reporting, what does that actually mean? What are they saying isn't worth it? Is it the materials, the longevity of the product? Is it that they can get it on resale, that it doesn't have a good resale value? What are they really saying yeah i think it's a whole grab bag of things like you know this is a generation of consumers who've grown up with tiktok accounts like tanner letterstein that's completely lifted the veal on um just like how luxury products are made and with the quality of it and like if it's even worth the price you know like they're so savvy because um they grew up completely just with all this information at their fingertips and they could just look up like okay what is a louis baton bag made out of it's actually canvas it's not even letter like it's like am should I really spend a thousand dollars in that?

5:08Is there an alternative to a Louis Vuitton bag? And there is, like you could look up, there are dupes of like all these famous handbags that we all are familiar with. You know, there's brands like Quince that have resonated with these customers instead of like Laura Piana, you know? It's like, they know they could find these alternatives. You know, some of them even just buy outright counterfeits because it's the cheapest thing out there, you know? It's like, I don't think they care about just all this like mythological narratives of like all these super old houses and all this craftsmanship and all this noise, you know?

5:38It's funny though. I was talking about this with our luxury correspondent, Robert Williams, the other day. And I sent him a Simpsons clip where they're making fun of brands. I'm an elder millennial, so that's what I do. And it was making that exact same point back in like 1993. And I was thinking like, actually like growing up, that anti-corporate like brands are full of it message was everywhere. And then we all went and bought that stuff anyway. So I guess I'd like to ask Jessica, Like, do you agree with what Lays said or are people into these brands or the idea of brands? They just don't want to pay for it.

6:13I'm inclined to agree insofar as I think a lot of people in the Gen Z cohort have gotten the quote unquote ick, as it were, from these luxury, especially the conglomerates. I don't think that's a very unique phenomenon. I mean, with the uncovering of a lot of these unsavory, unethical business practices within the industry, a lot of people are starting to suspect there's this pervasive idea that luxury conglomerates are just trying to squeeze as much profit as possible from the consumer without regard to even the house's own heritage and its storied quality. And I think even price aside, there is a real ire or resentment among Gen Z around price hikes, these very exorbitant price hikes in luxury that we've seen the past few years.

7:02I think we're a generation that cares a lot about value for dollar. We grew up seeing concert tickets and thinking, OK, they're pretty expensive,$100,$200. But 10 years from now, surely I'll be able to afford that. And now they're upwards of$1 ,000. You know, a COVID lockdown disrupted our pedagogy. And during those times, institutions were implementing a lot of price hikes for tuition. And I think all of that definitely translates to luxury space, the luxury space as well. Something else that's interesting about Gen Z that I do think is different from millennials and other generations is your appetite for the knockoffs.

7:36So I think all of us are agreeing that in our 20s, price sensitivity was a thing and none of us were running to the big Gucci release. But I definitely know that I would not be caught dead in a dupe. I'd rather just not have anything. What is that about? Why is it that you're so open to that? And does that resonate to you personally as a Gen Zer? You go for the dupe. You don't feel ashamed. You don't hide in the dupe. I mean, that's a great question. I'm personally, it just doesn't matter of principle, I would never purchase a dupe, you know, out of respect for the designer. You know, I think of it as art, like I can admire it from afar, but if I can't afford it, I don't need to own it personally.

8:16And I also really value quality. But I think with Gen Z, there's this phenomenon of people really wanting to flex for social media. And, you know, people will even buy something just to wear it once for a picture or like a reel or a TikTok and, you know, throw it out and never think about it again. People are very much into ephemeral clout. And I think that definitely shows in the ways people are buying these very cheap dupes that won't last through the year. So my knee-jerk reaction hearing all of us speak, it sounds like a lot of this has to do with being in your 20s, not maybe being at a certain salary level.

8:52You can't afford all this stuff. And then eventually you grow up and your salary gets a little bit higher and you can then go to the Gucci store. Why can't brands just wait? What is the emergency around how Gen Z is behaving right now that says, no, we can't wait for them to turn 30 and 40? Well, the habits that they have right now are likely going to be ingrained with them for the rest of their lives. This idea of always seeking value, always embracing things that are vintage, that have this unique patented to these items. That is what they define as luxury. And a lot of what these heritage luxury houses offer to them just don't speak to them because it's a kind of antiquated idea of what luxury should be.

9:31This super, I guess, old money marketing type of vibe that just isn't going to resonate with them. And, you know, by 2030, they're anticipated to be, I think, the consumer generation of like the biggest or most spending power, right? So that's coming pretty close, you know, we're not we're not too far from 2030. And I think you really have to lock in and just think like, you know, what does this customer want, you know, right now? And just like, how can we actually resonate with them without just like kind of relying on things that might work for millennials? Like, you know, I think a lot of brands, I think they still think streetwear, like, you know, like pop culture celebrities are what it's going to sell the product, but really that's not the case.

10:10I think what they really have to figure out is like one, this like value thing, like how, how can we sell luxury for prices that they could stomach, but also just like things that align with their own personal values, this desire for authenticity that they seek, all this type of stuff. So let's talk about value then. I mean, how do you signal that? And is it even possible to signal that a handbag has value if the price is$10 ,000? You know, I'm thinking back to what Print Thompson's North American CEO told me, which was that you have to really explain to them why luxury costs the price it costs, right?

10:43Whether it's a$1 ,000 handbag or like a$100 candle, right? Like you have to explain that there's this craftsmanship that's really built into this product, you know, and that there's like heritage and like, but I think you have to really prove that the price matches that point. And I think even then it's kind of hard to really sell some of those items. like when i think of like the luxury brands that resonate with like younger people in recent years it's not really like stuff like you know from the lvmhs of the world it's like brands like capital which like you know they have this like crazy like denim distressing borough techniques and like that's all that these like enthusiasts talk about how like oh capital denim is like one of one it's like you know it's impossibly hard to find it's um you can only buy it at the stores in japan all this that and the third right and i think when you explain those types of like i guess like narratives that feel more like real where it isn't just like something that's like talking about a house's heritage over and over again but it really does explain like okay this is the actual craftsmanship then you can actually maybe see videos of it on online and things like that i think that actually breaks through but even then it's like i don't know it's it just i think it's just so hard to convince that customer even on that end like that craftsmanship is worth the money i think also you also have to kind of play into like their cultural interest and what they're passionate about personally.

12:03We'll be back with more of The Debrief right after this.

12:10It's funny when you mentioned candles before, that's kind of where my brain went actually, because the other way to signal value is not so much this is the best made product, but it's part of this wider world or universe, if you're being really grandiose, that you're buying into. And Lueve had that tomato leaf candle that was all over TikTok. And like, you know, it's extremely expensive for a candle, but I think just about anyone could buy it as a splurge at least. And, you know, once you buy that, you're kind of buying in and you're thinking, oh, what else do they sell? Oh, like I'm kind of into maybe looking at the bags or the clothes at some point when I can't afford those.

12:46And then you worry less about, oh, where was this made and how good is the stitching? And that stuff becomes secondary. What do you think, Jessica? I mean, does that kind of thing work on you? You know, it's funny. With the bag charm craze, I was looking at some Louis Vuitton bag charms and I was like, my first instinct is for$400, I could just buy a purse at another brand that is still pretty solid quality instead of buying the small bag charm that just has the LV logo. I mean, I think I would love a tomato leaf candle from Louis Vuitton. That's something that definitely, I think, speaks to me in my heart.

13:23But for the most part, I mean, as a strategy, I think it can be winsome in certain contexts, but there's definitely a limit to how much you're relying on your heritage and like how much Gen Z actually wants to telegraph that they can afford your stuff. The other favorite word that's always used for Gen Z, and if I can make a case for millennials, it was used for us, too, that we like crave authenticity, that we want things to feel real. What does that mean for a Gen Z or from like a marketing standpoint? Are you more impressed by the format of maybe an unboxing? I think Leigh's story gets into this a little bit versus like a classic ad and an editorial like Vogue.

14:04What moves you and what feels authentic? I'll personally say the only luxury designer to actually resonate with me was honestly Virgil Abloh. And it was because of his commitment to just authentically just highlighting all these subcultures that he was inspired by, highlighting just like this perspective that was never really considered within the luxury space. You know, it was just like very strong, like just like worldly perspective of just like what is luxury fashion? It's streetwear, it's hip hop. It's like all these things that like, you know, people that were of that millennial base grew up with, but never felt like I guess was properly pedestaled or acknowledged in the luxury sphere.

14:41right so i think it's like things like that you're kind of just looking at what actually resonates with culture en masse and you're actually like authentically tap into that very millennial yeah yeah i think it is you know and i i mean that that worked for me like that was the only the first time i ever went to a lorre vuitton store was because of him you know and that was that was the only time i ever looked and even considered buying anything but um aside from that i just haven't felt that since then how would you contrast that jessica with being a Gen Z? I think on the subject of traditional marketing campaigns and luxury, A-list celebrities used to be seen as these very mysterious, untouchable figures who would do one late night talk show appearance and you don't know much about them and they're very aspirational.

15:28But now that they've become so concerned with appearing like the salt of the earth on social media, they've become very cringey. And especially since I think about that COVID lockdown era, Imagine cover video with all the celebrity singing. Like, I feel like that marks such a turning point. Like Gen Z finds a lot of merriment in making fun of the spectacle of celebrity or we just don't care, period. Brian is deeply offended, but continue. No, no, no, no, no. Quite the opposite. I love this theory that the Imagine video single-handedly killed the global luxury industry. I actually totally buy into it, Jessica.

16:05There are reverberations, like unintended consequences. I think also at the same time, our generation grew up on YouTube videos, had like how to build an outfit 101 that really opened the door to make this information free and accessible to all. That's how we got our style advice, not from magazines or anything. And I think it definitely follows that now we're still looking toward two influencers and social media for our trend analysis and predictions. So what is the way back for these brands? I mean, how do they reconnect with this generation? Or if Gen Z is a lost cause, how do they get Gen Alpha?

16:41Well, I mean, I'm not even sure if the influencers even know the answer to that question. But I remember one influencer I talked to, her name's Kate Barlett. She's this young New York City influencer who's like, I believe, 24 years old, lives in New York City in like the Upper East Side. And, you know, even though she never necessarily has told me that she buys luxury, just like Jessica, like she's told me that when it comes to like content creation, what's really important is that the videos have to feel real. They have to feel authentic. It should be more like, you know, just like a regular unboxing video, something that just feels like anyone could make it.

17:10Anyone can access this product, not like some glossy marketing campaign where it's like, you know, super editorialized and kind of sleepy, you know, just something that's like just normal. Like even thinking about someone like Wisdom Kai, right? Like all his content's like super approachable. It's not like something that's like ridiculously over edited. It's very much like here, look, I just got something from Miu Miu and like it broke, you know, like it doesn't feel fake or like, you know, just like scripted at all. And I think that's super important in regards to the communication on socials.

17:38But to answer that question about what it would take, I think one thing that luxury brands should really, I think, try to tap into is just figure out how to take into consideration this vintage market. I think it's really possible for them to actually just sort of like, I don't know if the right word to use is like almost monopolize it. But like I've noticed like how brands like Polaralf Lauren recently have sort of began selling just like their own vintage products for like ridiculously high prices, in my opinion. Just in my honest opinion, as someone who buys that stuff. But it does sell like people do buy that stuff, you know.

18:13And I think that's something that if the LVMH-owned companies of the world can figure out how to take control of their own resale, that could be a huge solution, especially if they could offer prices that are discounted from just the regular retail luxury products. I mean, you already see outdoor brands do this all the time. They sell pre-loved gear for$300 less than the new product, and people still love it and buy it because it's the same thing, basically, just used a little bit. But I think the other thing that they have to do is I think they just have to hire talent that I think speaks to that customer a bit more.

18:47You want to think about CDs in recent years. I just feel like there isn't many that really speak to just that generation, that younger generation. And it's not something like hiring ASAP Rocky to be the creative director of Ray-Ban. And, you know, it's more like finding someone that's like akin to a Virgil who like could actually speak for that generation and really understands what their tastes are, what they're into in terms of pop culture, all those things. And I don't necessarily feel like the CDs today really, really understand that. I think they understand what beautiful clothing looks like, but I don't think they understand the cultural element that kind of drives everything else behind that.

19:20Yeah, it's funny when these brands were talking in the last few years about being everywhere their customer is, being part of every cultural moment. I mean, you just pointed out two areas where they're not, which is who they're hiring to actually run these brands. And then the vintage market, which is where their customers actually are and the place that these luxury brands, a lot of them wouldn't be caught dead even engaging with. Yeah, I mean, Chloe recently resurrected the Paddington bag after it made quite a viral resurgence. And I was at a Chloe store recently and the sales associate was telling me it's been selling very well, despite the very high price at which it's marked.

19:56And I think it's a very fine line for luxury brands. I think, Leigh, you do make a great point about the actual creative directors and how they're not really resonating with Gen Z. But it's a very fine line when you try to make your luxury brand more down to earth. Then there's a chance that it will start to feel even more ridiculous that the price point is the way it is. They're in a bit of a catch-22 there. Short of inheriting a multi-million dollar estate, Jessica, is there anything that they can do to get you to purchase your first big, maybe Gucci socks, not the Hanes ones? Maybe take a step up from Hanes.

20:31What would it take for you to go do that? Speaking to Lay's point about someone, a figure like Virgil Abloh, I think someone like that makes an entire generation excited to shop at a brand. And there's a sense of like a new era, even with Virgil being, you know, one of the first Black designers at a major, at the helm of a major luxury brand. And I think Gen Z, you know, for all the hand wringing about how they care about sustainability and DEI and all these values, but, you know, that might not necessarily reflect in their dollar. I think there is something to be said about a very beautiful story.

21:08I think Gen Z still wants to buy into and feel like they're a part of a very important movement or wave. And I think if we were to see that again, I might be opening my wallet, calling up my bank. So, yeah. This was such an amazing conversation. I learned so much. I don't feel old. Thank you, Leigh and Jessica, for joining us today. Thank you so much, Sheena. It was a pleasure to come on again. Thanks for having me, Sheena. And you're very young and beautiful. Oh my God, thank you. Can we keep that in? That needs to stay on. I'm old and proud of it, so I don't mind. I just don't want the part where I'm described as young and beautiful cut, please.

21:46Please be sure to check out Leigh's article, Why Luxury Needs to Rethink How It Speaks to Gen Z, at businessoffashion.com. These and other stories are available to BOL Professional subscribers only, and you can find the links in the episode notes. You've been listening to The Debrief, produced and edited by Olivia Davies and Eric Rhea. I'm Sheena Butler-Young. And I'm Brian Baskin. We'll be back next week with a new episode. Thanks so much for joining us and be sure to follow us wherever you get your podcasts.