2025
Luxury Retail: Meet Gen Z.
How the next generation's spending power is reshaping the industry.
Generation Z, defined by the U.S. Census as those born between 1997 and 2012, carries a distinctive set of characteristics that continues to intrigue retailers and marketers alike. Raised in an era where smartphones were an extension of self even before their teenage years, this cohort is effortlessly fluent in technology—a trait that shapes nearly all their behaviors. Shaped by the financial headwinds faced by Millennials, they have grown into a group that prizes financial caution—opting to avoid debt when possible1—while simultaneously seeking authenticity and convenience at every turn. Their collective conscience is also marked by tangible concerns for the environment.
Yet, Gen Z is not only notable for how they think but also for their sheer size. In 2005, they comprised just 11% of the U.S. population, but that figure has since swelled to 21% as they’ve matured into adults and nearadults, today spanning roughly from ages 13 to 28. By 2030, virtually all of Gen Z will have reached adulthood, ranging from 18 to 33 years old—and will be poised to take on an even larger influence across society.
Globally, the numbers are just as striking. With nearly 1.9 billion individuals, Gen Z accounts for almost 23% of the world’s population according to Visual Capitalist, ranking them as the second-largest generation after Gen Alpha, who are the children born between 2013 and 20252. As Gen Z comes into its own, both in the U.S. and abroad, their demographic weight and unique perspectives and characteristics promise to reshape the marketplace and the world beyond.
What does Gen Z Have?
Gen Z is becoming a major force in shaping the luxury retail industry’s future. Despite misconceptions, this youngest cohort in the United States boasts impressive economic momentum. As reported in a recent Financial Times article, Gen Z Americans are not only enjoying higher living standards than many of their peers in countries such as the UK, Canada, Italy, and Germany, but they’re also climbing the economic ladder more swiftly than Millennial predecessors. Remarkably, those born in 1995 have experienced greater upward mobility by age 30 than their parents did—a testament to a rapidly shifting landscape in wealth and aspirations.³ The data supports these claims. When mapping the real net worth of households aged 18–34 annually, Newmark found that households aged 18–34 in 2025 are estimated to have a real net worth over 170% higher than households aged 18–34 in 2019. If we go back even further, households aged 18–34 in 2025 have an aggregate real net worth of almost 420% higher than households aged 18–34 in 2000. While Gen Z doesn’t fall directly into the age 18–34 cohort, they do represent an outsized share of the age bracket.
Estimated Real Net Worth Index of Households Aged 18-34 by Year
Index, 2000=100. Note: Years used include 2001, 2004, 2007, 2010, 2013, 2016, 2019, and 2022 provide the 2000-2025 model for true median net worth values for households under the age of 35. Model considers inflation-era declines in real wealth and COVID-era wealth increases. 2000 = 100. Source: Federal Reserve Survey of Consumer Finances, Federal Reserve Distributional Financial Accounts, Newmark
Supporting these observations, Bank of America’s March 2025 report calls Gen Z “a new economic force.” Their research anticipates that Gen Z’s income will surpass $36 trillion globally within the next five years, ballooning to $74 trillion by 2040. Notably, wage growth for Gen Z in the U.S. has outpaced every other generation since October 2018, further fueling their spending power. This spending potential connected to wage growth isn’t just theoretical—it’s already evident in the data. Bank of America’s aggregated card data shows that Gen Z’s average household spending growth has eclipsed that of the general population, both in essential and discretionary categories. Particularly in areas like entertainment and travel, Gen Z’s spending grew at an annual rate of 25.5% and 13.8% respectively (based on a six-month moving average as of February). Even as their savings may lag their expenditures, the generation’s economic ascent presents luxury retailers with a golden opportunity. By 2030, global Gen Z spending is projected to hit $12.6 trillion, an astronomical leap in just six years, from $2.7 trillion in 20244—marking them as a group that retailers simply can’t afford to ignore. Even amid economic uncertainty, Gen Z shows a strong willingness to splurge. According to McKinsey & Company’s 2025 consumer data, Gen Z trended above average on planned spending on restaurants and dining out, beauty and personal care, apparel, jewelry and accessories and footwear. 1Kasasa, September 2025, “Boomers, Gen X, Gen Y, Gen Z, Gen A, and Gen B explained. https://www.kasasa.com/exchange/articles/generations/gen-x-gen-y-gen-z 2https://www.visualcapitalist.com/ranked-the-worlds-population-by-generation/ 3Financial Times, January 2025, “Gen Z Americans are leaving their European cousins in the dust.” 4https://institute.bankofamerica.com/content/dam/economic-insights/genz-new-economic-force.pdf
Some of these predictions are already playing out in real life. A survey conducted by the Boston Consulting Group, in partnership with Women’s Wear Daily, shows consumers under age 29 outpacing older consumers in purchases of clothing, shoes and beauty-personal care products and services5. Dining out is an exception to the trend: under-29 consumers are trailing their older counterparts, a gap that may reflect the generation’s lower interest in alcohol, which younger adults are purchasing less frequency than prior generations. 5How Gen Z + Gen Alpha are Rewiring the Fashion Industry, October 2025, Boston Consulting Group and WWD
Retail Categories Where Consumers Intend To Splurge, by Generation
Note: By Z-Score Based on % of Respondents Source: McKinsey & Company, Newmark Research 3Q25
What Does Gen Z Want?
For Generation Z, luxury and retail are undergoing an evolution—from status-driven purchases to authentic, expressive experiences. This cohort craves confidence and self-identity, seeking “expressive luxury” that lets them remain true to themselves in every moment. Shopping is often a social event, not merely a transaction, and channel preferences fade into the background, replaced by a holistic, almost brand-agnostic view. For Gen Z, quality and value matter just as much as the label—a mindset shaped by pandemic uncertainty and economic turbulence during their formative years. When Gen Z shares a purchase on social media, it functions as a statement of identity, and a signal of the values they choose to endorse. Gen Z is also reshaping the sustainability narrative. Recent surveys underline Gen Z’s willingness to hold brands accountable — “penalizing” those that fall short of ethical and environmental standards. Notably, 65% are prepared to pay a premium for products they deem environmentally sustainable6, a new high-water mark for conscientious consumerism. On the other end of the seesaw, Gen Z views shopping for resale items as an empowered choice, rather than a compromise, reflecting financial savvy and a commitment to circular consumption. According to OfferUp’s 2025 Recommerce Report, 54% of Gen Z choose secondhand over new most of the time, significantly above the 44% of Millennials who claimed the same.7 As sustainability becomes a baseline expectation, brands that demonstrate genuine environmental and social stewardship will earn Gen Z’s loyalty—and remain relevant.
Yet, for all their activism and individuality, Gen Z places enormous value on convenience. As true digital natives, smartphones are their portals for learning, socializing, and every facet of shopping. Before visiting a store, they research products on their mobile devices. They then use them during the in-store shopping experience, to check reviews and compare alternatives across products and brands, creating instant, seamless engagement. Finally, they will promote their “found treasures” to their social network, often using the store’s interior and exterior as backdrops. To meet these expectations, retailers must deliver fluid, omnichannel experiences: a strong social presence, intuitive discovery, and frictionless checkout. Gen Z has little patience for delays or clunky payments processes; they expect touchless transactions and flexible paths between online and instore experiences. Still, physical retail matters and a well-designed brick-and-mortar store is something to be savored. Studies show 84% of young affluents define luxury as an “incredible in-store experience,” and nearly three-quarters shop in-person weekly. But beware: 60% will abandon a purchase if lines are too long, and 28% consider access to their preferred payment method a must-have.8
Gen Z has demanded changes in retail and brand marketing. User-generated content, or UGC, is being embraced by Gen Z, transforming both how brands market and how trust is built. According to digital marketing agency Amra & Elma, over 60% of Gen Z indicate a preference for UGC over traditional advertising, as they find real customer and influencer voices far more authentic and relatable than polished brand messaging.9 This generation
doesn’t just consume UGC—they want to create it, using platforms like TikTok and Instagram to share product experiences, take part in viral challenges, and actively shape brand narratives. Additionally, UGC-based campaigns see higher engagement and conversion rates among Gen Z consumers, with data from Camphouse, a media planning company, showing that almost 75% of Gen Z are swayed by this kind of content when making purchasing decisions.10 Gen Z is also utilizing AI to enhance their shopping experience, especially within higher-spend Gen Z shoppers. A study by Boston Consulting Group found that 41% of Gen Z and younger consumers use AI to shop for fashion items, vs. 34% of older consumers. What’s more, 45% of higher-spend Gen Z use AI daily to assist them in their brand discovery, versus just 24% for mid-level spend Gen Z, and just 22% for lower-level spend Gen Z.11 Despite their fluency with tech, Gen Z also pursues balance, acting to curb screen time more than any other cohort. AI is a tool, but not a lifestyle, and physical experiences—whether shopping or socializing—are valued as much as digital ones. In short, retailers who blend personalization, sustainability and effortless convenience will not only capture Gen Z’s attention but will define the next era of commerce.
U.S. Social Commerce Sales and Forecast
Source: eMarketer Forecast, October 2024 6https://www.deloitte.com/content/dam/assets-shared/docs/campaigns/2025/2025-genz-millennial-survey.pdf
7https://recommercereport.com/
8https://www.adyen.com/knowledge-hub/gen-z-retail
9https://www.amraandelma.com/gen-z-marketing-behavior-statistics/
10https://camphouse.io/blog/gen-z-trends
11High-level spend refers to Gen Z and Gen Alpha who spent over $1,000 on apparel in the last 12 months. Mid-level spenders spent between
Research Contacts: Brandon Isner Head of U.S. Retail Research brandon.isner@nmrk.com
David Bitner Executive Managing Director Global Head of Research david.bitner@nmrk.com
Wayne Gearey Head of Geospatial and Econometric Analytics wayne.gearey@nmrk.com
Business Contacts: Mark Masinter Chairman, Global Retail mark.masinter@nmrk.com
Research Contacts: Johnny Siegel President, Global Retail johnny.siegel@nmrk.com
