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How Gen Z is shaking up luxury spending
Generation Z is redefining the luxury market with their unique preferences and values, significantly differing from previous generations. With social media and pop culture heavily influencing their purchasing decisions, Gen Z demands more than just high-end products—they seek meaningful experiences that align with their personal beliefs. Their focus on authenticity, sustainability, and cultural immersion is reshaping how luxury brands operate. Let’s explore how Gen Z’s rise is transforming the luxury landscape, from their demand for authentic experiences to the impact of social media on their consumption patterns, and what the future holds for luxury brands catering to this new wave of consumers.
Meet the game-changers
The luxury market is undergoing a significant transformation, largely driven by the rising influence of Generation Z. As the newest group of luxury consumers, Gen Z brings a fresh perspective to the market, characterized by their distinct preferences and values. This generation, unlike their predecessors, is redefining what luxury means by prioritizing experiences, authenticity, and ethical practices over mere material opulence. This unique approach is not only influencing global trends but is also having a profound impact on the luxury landscape in Vietnam, where brands are increasingly tailoring their strategies to cater to this emerging demographic.
In response, luxury brands are increasingly moving away from traditional concepts of luxury that focus solely on status and exclusivity. Instead, they are embracing a more holistic approach that caters to Gen Z’s desire for meaningful, personalized experiences. Luxury hospitality providers are not just offering lavish hotels but are also curating experiences that immerse guests in the local culture and environment. Similarly, fashion brands are beginning to highlight their commitment to sustainability and ethical practices, recognizing that Gen Z consumers are more likely to support brands that align with their values.
Authenticity over Opulence
At the heart of Gen Z’s luxury consumption is a strong desire for authenticity and unique cultural experiences. Unlike previous generations, Gen Z consumers are not just interested in owning luxury items; they are more concerned with the stories, values, and cultural significance behind the brands they choose. This generation seeks out brands that align with their personal beliefs and values, often favoring those that promote social responsibility and sustainability.
According to Euromonitor International, Gen Z is more likely to support brands that emphasize ethical practices and sustainability. In Vietnam, this has led to a noticeable shift among luxury brands, which are increasingly adopting eco-friendly initiatives and transparent business practices. For instance, some high-end hotels and luxury resorts in Vietnam are now offering sustainable luxury experiences, such as eco-friendly accommodations and community-based tourism initiatives that allow guests to engage with local culture in a meaningful way.
This generation’s focus on authenticity extends beyond just sustainability; they also value unique and culturally rich experiences that connect them with the essence of the destinations they visit. In Vietnam, this has translated into a growing demand for luxury experiences that highlight the country’s rich cultural heritage, from traditional craft villages to culinary tours led by local chefs.
The great influence of social media and pop culture
Gen Z is known to be highly digital-savvy, with their purchasing decisions influenced by the content they consume online. Thus, luxury brands all over the world have recognized the importance of social media in reaching Gen Z consumers and have adapted their marketing strategies accordingly. Many brands are leveraging platforms like Instagram and TikTok to showcase their products and experiences, often collaborating with Gen Z influencers to create content that resonates with this audience.
Additionally, the influence of pop culture and celebrities on Gen Z’s luxury consumption cannot be overstated. Luxury brands are tapping into this trend by associating themselves with popular figures in music, film, and sports. By doing so, they not only increase their visibility among Gen Z consumers but also enhance their brand’s cultural relevance. For instance, the rise of South Korean girl group NewJeans, with members from Gen Z, has made a significant impact on the luxury market. The group’s members have been named ambassadors for high-end brands like Chanel, Gucci, and Dior, reflecting a strategic move by these luxury houses to connect with younger consumers. This partnership not only boosts the visibility of these brands among Gen Z but also cements their cultural relevance, as NewJeans embodies the values and aesthetics that resonate with this demographic.
In Vietnam, millennial stars have paved the way for the growing influence of local celebrities in the luxury brand space. Sơn Tùng M-TP, one of the country’s most iconic singers, has been recognized as a “Friend of the House” for Gucci, highlighting his prominent role in bridging Vietnamese pop culture with global luxury brands. Similarly, Châu Bùi and Quỳnh Anh Shyn, renowned fashion influencers, have gained international attention by sitting front row at prestigious fashion events such as Milan and Paris Fashion Week. Châu Bùi, in particular, has represented Vietnam at major shows for Prada and Gucci, while both she and Quỳnh Anh Shyn have been featured at events for Louis Vuitton, Moschino, and Hermès. Their involvement underscores the growing presence of Vietnamese millennials in the global luxury scene.
As for the younger generation, even though there is no official Gen Z ambassador for luxury brands in Vietnam yet, the potential is undeniable. This generation is making significant strides in the luxury market, as demonstrated by several key collaborations and high-profile events. For instance, Amee represented Vietnam at Tiffany & Co’s prestigious The Landmark event in New York, where she stood alongside global stars like Katy Perry and Hailey Bieber. She also played a leading role in Louis Vuitton’s “Horizons Never End” campaign in Vietnam, showcasing her growing influence in the luxury sector.
Other notable young figures include MONO, who has been associated with luxury brands like Dior Men and Calvin Klein, attending their shows and becoming a prominent figure in the luxury space. These examples highlight the rising influence of Gen Z in Vietnam’s luxury market and suggest that official ambassadorships could be on the horizon.
As the global luxury market is evolving in response to Gen Z’s digital habits and cultural preferences, luxury is no longer just about high-end products; it is about creating experiences and narratives that resonate with a younger, more connected audience. As Gen Z continues to gain purchasing power, their influence on the luxury market will only grow, making it essential for brands to stay ahead of the curve by embracing digital engagement and aligning with the values that matter most to this generation.
How Gen Z is shaping the future of luxury
Looking ahead, Gen Z’s influence on the luxury market in Vietnam is poised to grow even stronger. As this generation continues to prioritize authenticity, sustainability, and unique cultural experiences, luxury brands will need to innovate and adapt to stay relevant. The future of luxury in Vietnam is likely to see the emergence of new trends and concepts that cater specifically to Gen Z’s preferences.
One potential trend is the rise of experiential luxury, where the focus shifts from owning luxury goods to enjoying exclusive and personalized experiences. This could include everything from bespoke travel itineraries to immersive cultural experiences that allow Gen Z consumers to connect with the local culture in a meaningful way.
Another trend that may gain traction is the integration of digital and physical luxury experiences. As digital natives, Gen Z consumers are comfortable navigating both online and offline worlds, and luxury brands that can seamlessly blend these experiences are likely to succeed in capturing their attention.
Among the brands making significant strides in this area, Louis Vuitton stands out as a leader. They have been proactive in associating themselves with other influential figures in Vietnam who appeal to younger audiences. The brand has consistently involved popular artists and celebrities in its campaigns and events, ensuring that it remains at the forefront of Gen Z’s consciousness. These efforts are not just about celebrity endorsements but about creating a narrative that resonates with the values and lifestyles of the younger generation. One notable example is the brand’s “Horizons Never End” campaign, which not only showcased the luxury and craftsmanship of Louis Vuitton but also featured Amee, a rising Gen Z star in Vietnam. By including Amee, Louis Vuitton effectively tapped into the younger demographic’s growing influence, aligning the brand with the aspirations and cultural relevance that appeal to Gen Z. The campaign was a significant move, as it highlighted Louis Vuitton’s ability to bridge the gap between traditional luxury and the modern, experience-driven preferences of Gen Z. Ultimately, the success of luxury brands in Vietnam will depend on their ability to understand and adapt to the evolving needs and preferences of Gen Z. By embracing sustainability, authenticity, and digital engagement, luxury brands can position themselves to thrive in a market increasingly dominated by this influential generation.
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