What: The strength of the Gen Z Chinese luxury consumer is threatened by the rising youth unemployment rates while in the US inflation is slowing sales for younger generations.

Why it is important: Many luxury companies had adjusted their product offer to appeal to the growing Gen Z influence on sales; but, with inflation and rising unemployment, their contribution to the overall financial growth for the sector is in question.

Focusing on core Gen Z luxury consumers less likely to be impacted by inflation or unemployment seems like a logical move. But the concern is over those would-be buyers that had factored into reports that a fifth of all luxury spending by 2025 would be made by Gen Z.

Some brands have chosen to adapt by focusing on entry-level products and digital garments which have seen continued success despite the unfavourable economic conditions. However, real and virtual entry-level products call for high levels of creative investment at an affordable price point that do not dilute the brand.

Finding success in offering the right assortment of entry-level products at the right price will help mitigate the potential economic restrictions imposed on Gen Z consumers today.

Uncertain future for Gen Z’s luxury industry contribution