Gen Z and millennials prioritising quality and sustainability for luxury purchases

Gen Z and millennial consumers are driving a shift towards “accessible luxury,” prioritising quality, sustainability and a secure, seamless shopping experiences, according to new research from Tink, the payment services and open banking platform.

The research, conducted by Censuswide in the UK, shows that Gen Z and millennial consumers, who purchase the largest share of luxury items, averaging at 16 and 14 items per year, respectively, are becoming more discerning about their luxury purchases, with around three-quarters (73 percent) of millennials and 64 percent of Gen Z surveyed wanting to invest more in quality purchases that will last.

Sustainability also plays a key role in decision-making, with the majority of Gen Z (63 percent) and millennials (62 percent) saying they are willing to pay more for ethically made items.

For 62 percent of Gen Z and 68 percent of millennials, luxury is also about the buying experience, as well as the item itself, and for three-quarters of both Gen Z and millennials, they are also willing to pay more for the reputation of the brand, reflecting the importance of trust in their purchasing decisions.

Lucy Grant, commercial strategy director at Tink, said in a statement: “Understanding the evolving preferences of Gen Z and millennial shoppers is key for merchants looking to stay ahead in the high ticket and luxury market.

“These high-value customers demand more than just a premium product, they expect an exceptional experience, from sustainability and quality, to seamless and secure payments.”

Merchants need to invest in payment upgrades to target Gen Z and millennial shoppers

When buying luxury, Gen Z (58 percent) and millennials (64 percent) state payment security is a top concern, and this translates into hesitation to make high-value online purchases due to fears of payment failure and fraud.

In response, over two-thirds (68 percent) of high-end merchants are planning to enhance their payment systems in the next year to meet these demands, with 85 percent adding they are also focused on delivering a seamless and secure payment experience to enhance the buying experience.

Tink’s research also shows that 36 percent of Gen Z and 42 percent of millennials want a payment method with no hidden fees, while 34 percent of Gen Z and 38 percent of millennials demand one that minimises fraud.

Grant added: “Trust and brand reputation have never been more important for consumers when parting with their hard-earned cash, so it's essential that merchants give shoppers peace of mind when it comes to making high-value purchases.

“By investing in modern payment solutions, such as Pay by Bank, high-end merchants can offer a secure, trusted checkout option – with authentication happening in the customer's familiar bank environment.”