NEW GEN Z 101: Unlock & Outlast Microtrends
Jul 27 2022
The younger gens’ definition of splurges and luxury brands are not what you’d think…
Gen Z and Millennials are unique consumers, and not just because of their affinity for online shopping. The way they define what’s “expensive” is being influenced by the world events that shaped their reality—for Millennials, many suffered the results of the Great Recession as they graduated into the work world, and Gen Z is now looking at a similar experience as the price of living rises across the world. So, while they’re spending more now than they have since the beginning of the pandemic, their ability to make big financial decisions are continuing to be impacted.
But it’s not just recessions and economic uncertainty that has had an effect on their price perception. These generations have grown up shopping at big box, mass merch, and fast fashion retailers, which have completely recalibrated their ideas around spending. YPulse’s recent Mass Merch Mentality report confirms the values that are important to these gens when they shop, and price is their top factor. In fact, they consider it more of a brag to be able to say they got an item cheap than it is to flex a high price tag. Because of what they’re willing to spend on a typical item, they’re redefining what it means for a brand to be “luxury” in the first place.
According to YPulse’s Luxury report, the top qualities young people say are important to define a brand as luxury are being “higher quality” and “being designed beautifully.” These descriptors however, could be applied to many brands, and they’ve said one of the reasons they love affordable options like big box stores is because the products they find there are good quality. In order to understand exactly what makes a brand luxury to these gens, it’s important to look at what standards they’re using to judge price, products, and brands. Our Mass Merch Mentality research explored that, and asked 13-39-year-olds “What would you consider an expensive piece of clothing?” Respondents were given options that ranged from “Anything above $21” to “Anything above $1,000,” and here’s what we found out:
Their definition of expensive begins at $40
The vast majority of young people are now considering anything that costs more than $40 to be expensive. What’s more, 11% of Gen Z and Millennials tell YPulse that they consider anything above $20 to be expensive. Gen Z are slightly more likely to say $40 is expensive (22%), but Millennials generally agree (18%) despite their bigger spending power.
The fact that anything over $40 is a splurge to them, completely recalibrates their idea of what brands are luxury as well. The purchases that these gens are “splurging” on may look more like regular brand-name items than top designers. Over two in five of Gen Z and Millennials defined luxury as an item that is more expensive than what they usually spend, and YPulse data shows the average amount they’re spending on a single item of clothing is $21-$40.
Anything with a recognizable name can be considered luxury
Gen Z and Millennials agree that major designers are luxury, but because of their low threshold for what is expensive, just about any brand with a recognizable name can be considered luxury to them. When YPulse asked young consumers what luxury brands they would like to own, names like Nike and Victoria’s Secret were high on their list, among the traditionally high-end brands like Gucci and Louis Vuitton. And our Mass Merch Mentality research found over half of young people agree that a luxury product is any recognizable brand name item:
We asked “Which of the following better describes how you would define a luxury product,” and young consumers were asked to choose between “It is any recognizable brand name item,” and “It is a historically high-end brand name item”—and over half choose “any recognizable brand name item.” They’ve grown up buying no-brand clothes, making any brand that has a name aspirational to them. Luxury is still about exclusivity to these gens in some ways, but their bar is lower than what other gens’ may be; nearly half of young consumers say an item is a luxury simply because it is something they wouldn’t usually buy, instead of being something not many people can have.
These generations have been changing luxury for some time, and they continue to bend the “rules” around high end brands. Affordability has become a source of pride, not shame, and their definition of what a luxury brand actually is continues to shift.
YPulse paid users can access the full Mass Merch Mentality report and data here.
Don’t have a YPulse paid account? Find out more here.
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