The Next Generation of Luxury Shopper

The rise of independent designers and retailers within the Artisanal/Avant-Garde niche satisfies an obsession for all things meaningful and handmade.


The next generation of luxury shopper is typecast as a cohort of tech savvy millennials whose changing behaviours are reshaping the luxury retail experience—into one that spans across online and offline seamlessly, and uses technology to improve the in-store experience.



But there’s more than meets the eye—tipped to be the most important growing customer for the luxury industry, it’s crucial that luxury retailers come to understand the next wave of customers whose purchasing power can be leveraged in future, and whose brand loyalty can be cultivated for when they have the financial means to afford luxury goods.

One way to get to know the succeeding generation of luxury shopper, is to observe behavioural and aspirational differences in comparison to its senior counterpart. One such difference is that the younger generation will spend less on individual luxury items, but are more likely to purchase higher volumes of affordable luxury goods. Although they don’t yet have the financial means that their senior counterpart does, they are very influential as a market sector and one that’s larger than the affluent division of society in the UK.

This young and influential generation of luxury shopper is comprised of millennials and Generation Z (Gen Z), spanning a decade of individuals in their mid 20s to 30s. Although collectively they are considered to be the next customer sector in luxury retail, they each posses individual traits as distinct generations.

Millennials are old enough to have experienced the development of technology unlike the younger Gen Z. According to Walpole and CBRE’s Luxury & Technology Report, millennials prefer to carry out purchases in store, they want to experience the product before purchase and sees shopping as part of a leisure activity. Store design therefore becomes important, as they expect the retail environment to be one that is experiential yet convenient. Functionality is a priority, they want to pay without waiting behind long queues and also try and return items.

In contrast, Gen Z were born into an era of technology unlike millennials who witnessed its evolution. Accessibility and innovations in technology fundamentally influenced their behaviour—instantaneous access to knowledge and the ability to shop whenever and have items delivered wherever they wish is an expectation more so than a desire to this generation, who harness a magnitude of technology to achieve such means. Yet despite their devotion to technology, the majority of Gen Z still purchase in-store (one of the possible reasons being limited access to card payment options). Providing a retail experience with optimised mobile functionality is a priority for luxury retailers, if they are to draw Gen Z closer to their brand, based on their lifestyle and preferred activities.

Retailers are and will need to recontextualise the in-store experience to exceed Gen Z’s expectations, while allowing them to shape their own individual experiences. Social media is Gen Z’s natural companion, and can be leveraged to not only advocate brands but also create a dialogue that reveals insights about their behaviours and aspirations. Take China’s “Mr. Bags” for example. Tao Liang or better known to China’s fashion scene as Mr. Bags, has helped connect the likes of Louis Vuitton and Gucci to an affluent younger generation who follow his blog and social accounts (Weibo and WeChat). Recently managing to sell 1.2 million RMB ($173,652) worth of designer handbags in a mere 12 minutes, Mr. Bags’ work as an influencer is exemplar of how social media can not only be utilised to promote brands but also to build trust and gain reach amongst younger audiences.



Milennials and Gen Z as a collective is considered to be the new wave luxury shopper



Milennials and Gen Z as a collective is considered to be the new wave luxury shopper, and is tipped to become the upcoming customer sector for the luxury landscape in the future. As such it is crucial that retailers understand their expectations, aspirations and behaviours in order to gain and increase brand loyalty, leveraging their purchase power for when they are financially equipped to be able to afford luxury goods. The crux lies in a balancing act, between retaining the authenticity of a brand and catering to customers’ expectations and changes in behaviour.

Luxury retailers’ increased use of retail technology and e-commerce platforms is testament to the latter. In fact, e-commerce has become a necessity for luxury retail within the past decade, while tech innovations are increasingly being utilised to enhance the in-store experience. Technology can bring luxury retailers closer to the next generation of luxury shopper, yet its implementation poses both opportunities and challenges.

While technology has been on the tip of everyone’s tongue, the luxury industry has been the slowest to embrace it. Luxury has always revolved around tactile experience even more so than the exquisite goods on offer, and technology threatened to remove the allure and exclusivity of luxury brands. Yet a website can’t replace the experience of a store, and technology can offer convenience as well as valuable customer data. Technology need not dilute authenticity nor exclusivity—e-commerce and bricks-and-mortar should be considered as part of the same cohesive retail experience.

The re-configured approach to store design loved by the new generation luxury shopper can be reflected online, using displays, detailed imagery and descriptions to encapsulate the essence of luxury items alongside campaigns and editorial content distributed externally. Websites of course also have to be functional, with user experience in mind and a clear payment process. Rather than replacing stores, online retailing and technology is best suited in the case of luxury retailers, to enhance and even up-hold the in-store experience where valuable memories are created. As such, emotional data gains importance as it will be more effective than transactional data at optimising experiences.

Although some luxury retailers are concerned that technology will undermine the exclusivity of their brand, the new generation of tech devoted luxury shopper is more adjusted to purchasing high value items online—a transactional website or e-commerce platform are essential in a competitive luxury retail landscape.

Yet another factor that has helped shape the new wave luxury shopper is tourism. Euromonitor reports that the luxury goods market recorded a healthy growth value in 2017 despite uncertainty around Brexit—one of the possible reasons being increased tourism spend as a result of the weakened pound. 

Visit Britain forecasts there will be an increase of 4.4% on 2017 (a record breaking year for inbound tousim to the UK), to 40.9 million visits in 2018. Spending by visitors is also forecast to be £26.3 billion in 2018, an increase of 7.1% on 2017. Among these visitors, Chinese tourists make up a large section with over 300,000 visits last year, a 29.45% increase from the previous year. For prime luxury retail locations Bond and Sloane Street, Chinese transactions made up the largest proportion between January and April 2018, with 22% and 12% respectively according to Global Blue. This week, luxury retailers in the UK are expected to see a boost in spending from Chinese shoppers in what’s termed the “Golden Week” holiday. Increase in air travel and tourism combined with the omnipresence of the internet enables the new wave shopper of luxury retail in the UK to be one that is highly mobile and even from overseas.

Despite being inseparable from technology, the new generation of luxury shopper yearns to experience luxury products in person and have their expectations exceeded in the in-store arena, while shaping their own interactions with brands through social media. Wherever they may be, convenience and functionality is an expectation more so than a desire— technology and bricks-and-mortar become part of the same omnichannel approach that enables a seamless brand and retail experience. Understanding this nuanced cohort’s evolving expectations, behaviours and aspirations will require a delicate balance between brand integrity and implementation of functional technology to enhance and not disrupt in-store service and in-person experiences.



Want to know more?

TUSOW is an integrated e-commerce partner.

Get in touch