High inflation, job losses and the rising cost of living are all factors that have put a damper on consumers’ appetite for spending in-store and online, leaving many waiting for sales and promotions to get the best price possible.
While that stands true for consumers at large, demand for luxury products, especially among affluent Gen Z and millennials, has primarily remained unfazed.
In fact, a recent study by Rakuten shows that Gen Z and millennial shoppers are increasing their monthly fashion budgets by more than 26% to get their hands on brands and higher-end pieces they desire.
“The most surprising part of this is that younger buyers, specifically Gen Z and Millennial shoppers, are growing three times faster than other generations as luxury buyers,” said Rakuten’s President Kristen Gall.
"Gen Z consumers can spend more on luxury goods because they have more disposable income. Younger consumers are prioritizing these purchases because they see them as investment pieces, something to last for years, and potentially generations to come."
This explains why retailers are seeing a surge in demand for high-end luxury products and cheap and affordable options.
According to Lyst’s Q1 2023 index, Uniqlo’s shoulder bag, priced below $20, has become the most popular and affordable item ever featured. Its popularity surged after a TikTok video went viral, amassing over 59 million views, leading to frequent sellouts in different colors. Meanwhile, demand has also surged for Rick Owens’ Kriester sunglasses, priced at $625, with prominent personalities such as the Clermont twins and Lotta Volkov seen wearing them.
It should perhaps come as no surprise that luxury brands such as Gucci, Louis Vuitton, and Prada have continued their streak as the hottest fashion brands on Lyst’s latest index while emerging and more affordable players such as Skims have made their debut.
Photo credit: Uniqlo
