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Gen Z and Luxury: An Exploratory Study of Consumption Behavior

ABSTRACT 

THE LUXURY INDUSTRY HAS CHANGED DURING THE PAST CENTURY: WHEREAS QUALITY, PRESTIGE, AND KNOWLEDGE STAYED NEARLY UNTOUCHED, IT WENT FROM FAMILY-DRIVEN BUSINESSES TO BIG CONGLOMERATES (KAPFERER ET AL., 2017). NOT ONLY HAS THE INDUSTRY CHANGED, BUT ALSO ITS CONSUMERS HAVE. THERE IS A NEW AND THEREFORE UNDERREPRESENTED GENERATION OF CONSUMERS COMING UP THAT WILL BE RESPONSIBLE FOR 40% OF ALL LUXURY PURCHASES BY 2035: THE GENERATION Z (GEN Z) (BAIN & COMPANY, 2020). 

ONE OF THE REASONS WHY CUSTOMERS IN GENERAL BUY FROM LUXURY BRANDS HAVE ALWAYS BEEN THEIR NEED TO SHOW THEIR ECONOMIC WEALTH PUBLICLY. THIS BEHAVIOR IS KNOWN AS CONSPICUOUS CONSUMPTION AND WAS FIRSTLY DESCRIBED BY THORSTEIN VEBLEN IN 1899. HOWEVER, MORE THAN A CENTURY LATER, THE LITERATURE SUGGESTS THAT CONTEMPORARY ELITES ALSO USE MORE SUBTLE BRAND SIGNALS TO DISTINGUISH THEMSELVES FROM OTHER GROUPS IN A WAY THAT IS ONLY DETECTABLE TO THEIR PEERS (ECKHARDT ET AL., 2015). 

THIS PAPER AIMS TO TAKE A DEEPER LOOK AT GEN Z’S MOTIVES FOR INCONSPICUOUS CONSUMPTION. THE WORLD’S LARGEST LUXURY CONGLOMERATE, THE LVMH MOËT HENNESSY LOUIS VUITTON’S (LVMH) GROUP, HAS BEEN CHOSEN AS AN ILLUSTRATIVE CASE. AGAINST THIS BACKGROUND, THE PAPER INVESTIGATES GEN Z’S PERCEPTION OF LUXURY BRANDS, THE SIGNALS BRANDS SEND, AND THEIR WAY OF COMMUNICATING. AFTER CONDUCTING TEN SEMI-STRUCTURED INTERVIEWS WITH WEALTHY CONSUMERS OF LUXURY GOODS, IT CAN BE SEEN THAT ALL PARTICIPANTS FROM THE OLD MONEY CONSUME INCONSPICUOUSLY; ALTHOUGH NOT EVERYONE FROM THE NEW MONEY CONSUMES CONSPICUOUSLY. THE RESULTS ALSO SHOW THAT CULTURE – INCLUDING ITS ECONOMIC, SOCIETAL, AND POLITICAL ATTRIBUTES – INFLUENCES GEN Z’S PURCHASING BEHAVIOR.