Young Consumers and Luxury: Spending Under the Microscope

A generation that loves brands but demands meaning behind every purchase

The luxury industry is entering a phase of reflection. After years of record expansion driven by aspirational consumers, the younger generations —Gen Z and early millennials— are redefining their relationship with luxury. It is no longer about possession, but about justifying the value of every purchase.

According to the Bain-Altagamma 2025 report, the sector is experiencing a “healthy slowdown” after years of euphoria, showing flat or slightly negative growth. Luxury houses are recalibrating: focusing less on volume and more on purpose, profitability, and genuine emotional connection with the client.

From impulse to purpose

Average annual spending on personal luxury goods among young U.S. consumers (fashion, accessories, beauty) dropped by 6 % this year to around $2,213 per person, according to Piper Sandler. The figure may seem modest, yet the message behind it is profound: luxury is shifting from an immediate indulgence to a selective reward —reserved for experiences and items that reflect identity, sustainability, and values.

As BCG-Altagamma analysts note, “They don’t buy for status anymore, they buy for connection.” Young consumers are not rejecting luxury; they are filtering it carefully—verifying provenance, materials, environmental impact, and, above all, the brand’s authenticity.

A more conscious and relational luxury

Today’s luxury clients seek human connection above all. The latest True-Luxury Global Consumer Insight study from BCG and Altagamma highlights four key expectations among young high-potential buyers:

• Authentic connection: direct and personal communication with the brand.
• Intimacy: bespoke digital or physical experiences.
• Tangible excellence: craftsmanship and long-lasting quality.
• Recognition: belonging to a community that values loyalty.

This paradigm shift forces brands to rethink not only their products but also their relationships. Mass marketing gives way to artisan clienteling, built around micro-communities, curated drops, and storytelling that reinforces individuality.

Beauty and accessibility: the new gateway

While apparel and leather goods are seeing spending adjustments, the luxury beauty segment continues to thrive. Perfume, skincare, and makeup have become entry points into the luxury universe, offering a taste of exclusivity at more accessible prices. Brands like Dior, Chanel, and Hermès now champion a form of well-being luxury —emotional rather than ostentatious— where self-care becomes the new sophistication.

China and the U.S. set the global tone

Regional behavior diverges notably. In China, after the post-pandemic surge, young middle-class consumers are reducing impulse purchases and seeking “purpose-driven luxury.” In the United States, political uncertainty and inflation have tempered spending, though the appetite for premium experiences remains high among affluent young professionals. In contrast, the Middle East, Southeast Asia, and Latin America are emerging as new luxury growth hubs, where youth still equates luxury with social progress.

How brands are adapting

• Fewer collections, stronger icons.
• Higher perceived value through customization and sustainability.
• Client education about craftsmanship and brand heritage.
• Purposeful collaborations—less noise, more authenticity.
• Selective digitalization to preserve mystique and desirability.

The challenge is to maintain exclusivity in an age of transparency, balancing luxury’s timeless allure with the ethical demands of a hyper-connected generation.

A more intimate future for luxury

Bain projects that the market will return to growth by 2027, driven precisely by these younger consumers as their financial stability and sense of value mature. They are not lost customers, but rather more demanding ones. The luxury brands that will win their loyalty are those capable of telling a coherent story, respecting their time, and proving that exclusivity is not about price—but about experience.

In the era of spending under scrutiny, the luxury that endures will not be the loudest, but the truest.