Why Buy It When You Can Borrow It? How Gen Z Is Rewriting Luxury

From renting designer handbags to sharing luxury purchases with friends, here's how Gen Z is changing the way we discover, experience and spend money on luxury products.

You've got a wedding coming up and you've found the perfect outfit, but you'd love a designer handbag and some beautiful jewellery to finish the look. Do you spend thousands of dollars buying the pieces you've been eyeing off, borrow something from a friend or settle for a more affordable alternative?

For a growing number of luxury shoppers, there's another option. You could rent a Chanel handbag for the weekend, borrow a statement necklace through a subscription service or even pool your money with friends to buy something you can all share.

It might sound a little like borrowing from a very well-dressed friend, but businesses around the world are now building entire models around this idea.

As Gen Z becomes an increasingly influential group of consumers, we're seeing some fascinating changes in the way younger generations are approaching luxury products, and it's creating opportunities for retailers willing to rethink the way they're engaging the next generation of customer.

Meet The Next Generation Of Luxury Consumers

Gen Z has grown up in a world where the cost of housing, education and everyday living has risen significantly, making younger consumers increasingly conscious of where and how they're spending their money.

But that doesn't mean they've lost their appetite for premium brands, designer products and luxury experiences.

Research from L.E.K. Consulting found that 92% of surveyed Gen Z consumers research products before making a purchase, while 64% actually prefer shopping in-store rather than online.

What's interesting is that younger consumers aren't necessarily looking for the cheapest option. They're looking for brands and products they feel are worth investing in, often considering the quality, values, experience and story behind a product before deciding what deserves their money.

For luxury retailers, that creates an opportunity to rethink how we make our products desirable, accessible and relevant to the next generation.

A New Approach To Luxury Purchases

For generations, owning an expensive designer handbag, luxury watch or beautiful piece of jewellery has been a symbol of success and status. But what happens when a generation still wants to enjoy those products without necessarily wanting to spend thousands of dollars owning them?

One of my favourite emerging trends is the rise of co-luxing, where friends pool their money to purchase luxury products they can share. Rather than one person spending $5,000 on a designer handbag, imagine five friends contributing $1,000 each towards a bag they can rotate for different occasions. Everyone gets access to something they love without having to justify the entire purchase themselves.

Research from Kantar and Altiant highlights how luxury shoppers are beginning to embrace different ownership models, finding that 28% purchase luxury goods second-hand, 20% use rental services and 17% participate in co-luxing.

For younger consumers, these models can offer something traditional luxury retail doesn't always provide. The ability to access more products, experiment with different styles and enjoy premium experiences without the same financial commitment.

Renting, Swapping And Thrifting Your Way To Luxury

One interesting example is By Rotation, a peer-to-peer fashion rental platform where customers can borrow designer clothing and accessories from other people's wardrobes. Instead of purchasing a luxury handbag for a wedding or spending hundreds on a dress you'll only wear once, you can rent something special for the occasion and return it afterwards. On the flip side, people who own designer pieces can earn money from products that might otherwise spend most of their lives sitting in a wardrobe.

Then there's Vivrelle, which has taken luxury rentals one step further by turning the experience into a membership model. Customers pay a monthly subscription to access designer handbags and jewellery from luxury brands, with the option to rotate the pieces they're borrowing. Imagine having access to a wardrobe filled with beautiful luxury accessories that you can change throughout the year without having to purchase every individual item.

Meanwhile, Vestiaire Collective has built a global marketplace around pre-loved luxury, allowing customers to buy and sell authenticated designer products, including handbags, clothing, watches and jewellery.

And this brings us to another trend that's becoming increasingly popular among younger shoppers - thrifting.

Gen Z is embracing second-hand shopping, hunting through vintage stores, op shops and online resale platforms for designer pieces with a story behind them. A vintage handbag, pre-loved watch or beautiful piece of jewellery can offer something that a brand-new product doesn't always have - a unique history, an opportunity to give something a second life and a much more accessible price tag.

Research from Boston Consulting Group and Vestiaire Collective found that 8 in 10 surveyed Gen Z resale shoppers use second-hand shopping as a way to discover new brands.

For luxury retailers, there's something worth considering here. A customer purchasing a pre-loved designer handbag today might become the person purchasing a brand-new one in five years' time.

The opportunity isn't necessarily to see renting, thrifting and resale as competition, but to explore how these models could introduce more people to your brand and create relationships that grow over time.

What We Can Learn From The Gen Z Shopping Basket

When we look at some of the brands winning the attention of younger consumers, there are a few interesting lessons about how luxury businesses can remain relevant to the next generation.

One of my favourite examples is Australian jewellery brand Sarah & Sebastian, which has created a product range that allows customers to grow with the brand throughout different stages of their lives.

At one end of the collection, you'll find beautiful engagement rings, wedding jewellery and high-end diamond pieces worth thousands of dollars. At the other end, you'll find everyday earrings, necklaces and accessories starting from a few hundred dollars.

What's clever about this approach is that someone might discover Sarah & Sebastian in their early twenties, fall in love with the brand through a smaller everyday purchase and continue coming back as their career, income and life milestones evolve. The young customer purchasing their first pair of fine jewellery earrings today could be the same customer returning years later to shop for an engagement ring.

Another interesting example is Oura, which has taken a traditional fitness tracker and transformed it into a sleek ring that looks more like a piece of jewellery than wearable technology.

Its popularity highlights how brands can connect their products with the lifestyles and interests of younger consumers, combining wellness, technology and style into something that feels relevant to their everyday lives.

And then there's The Ordinary, which has built its reputation by taking a refreshingly transparent approach to skincare. Rather than relying on complicated marketing claims, the brand focuses on explaining its ingredients, what products actually do and why customers should trust them.

These businesses operate in very different industries, but they all demonstrate something important about connecting with Gen Z. Younger consumers want products that fit into their lives, brands they feel connected to and experiences that make them confident about where they're spending their money.

So here is what luxury retail can learn from this:

1. Create A Brand Your Customers Can Grow With

Not every young person is ready to purchase a $10,000 engagement ring, designer watch or luxury handbag, but that doesn't mean they won't be an incredibly valuable customer in the future. Think about how you can introduce younger consumers to your brand through more attainable products, everyday pieces and smaller purchases that allow them to experience your quality and craftsmanship.

Much like Sarah & Sebastian, the opportunity is to build a relationship with someone early and give them a reason to continue choosing your brand as they move through different milestones in their lives.

2. Rethink What Ownership Could Look Like

For luxury retailers, particularly jewellers and fashion brands, the rise of co-luxing, rentals and pre-loved products creates some fascinating opportunities to experiment with new business models.

Imagine offering a collection of statement jewellery that customers could rent for weddings and events, introducing a trade-in program for designer watches or partnering with a resale platform to help customers buy and sell pre-loved pieces. These models come with practical considerations around insurance, product care, authenticity and logistics, but they also create new ways for customers to experience luxury products they might not otherwise purchase.

3. Make Your Brand An Experience Worth Visiting

While Gen Z has grown up surrounded by online shopping, that doesn't mean physical retail has lost its appeal. Spend an hour in a busy MECCA and you'll see young people browsing products, testing fragrances, asking for skincare advice and spending time exploring the latest products with friends.

MECCA has created stores that feel like destinations, offering personalised consultations, beauty services and opportunities to discover and experiment with products before purchasing. For luxury retailers, there's an opportunity to think beyond what customers can buy and consider what they can experience. Whether that's meeting the people behind the products, learning about craftsmanship, attending a styling session or creating something personalised, the experience around a purchase can be just as memorable as the product itself.

The Future Of Luxury Might Look A Little Different

As Gen Z continues to reshape the luxury market, I think we're going to see some fascinating changes in the way premium products are sold, shared and experienced.

There will always be a place for beautiful products that people save towards, purchase to celebrate milestones and treasure for decades. But alongside those traditional purchases, we're seeing younger consumers embrace new ways to access luxury through rentals, subscriptions, shared ownership and pre-loved purchases.

For retailers, this doesn't mean abandoning the traditional luxury experience. It's about recognising that the next generation might want to interact with your brand very differently from the customers who came before them.

Because Gen Z might still dream of owning the designer handbag, luxury watch or beautiful diamond necklace. They're just discovering that they don't always need to own it to enjoy it.

About The Author

Scott Millar is a generational consultant, keynote speaker and trusted voice on the future of work, helping organisations understand the trends shaping Gen Z, Gen Alpha and the next generation of consumers.

Working with businesses and industry leaders across Australia, Scott helps organisations explore how younger generations are reshaping consumer behaviour and what brands can do to attract, engage and grow with their next generation of customers.

To find out more about Scott's speaking and consulting services, head to www.iamscottmillar.com/speaking.