Each generation cultivates their own emblems of success. In the past that might have looked like owning a car or holidaying abroad. More recently shows of affluence have entailed owning a new-fangled PC or arriving to meetings with a gadget called an "iPhone" in hand.
But millennials and Gen Z—the latter in particular—are shaking up what status symbols for their age group looks like. Gone are the days of shiny new tech and the latest designer pieces. Instead young consumers are coveting second-hand handbags and expensive food shops as they navigate their way through an inflation-stacked economy, while keeping environmental concerns planted firmly front of mind.
Consumer experts say that while the exact items Gen Z is lusting after will change over time—as new products launch and economic factors around them shift—their spending priorities are likely to stay the same.
One of the things that's sure to make them move on? Adoption of these trends by other generations. As associate professor of marketing Gillian Brooks puts it: "Part of how [Gen Z] see themselves is not being millennial, is not being a Boomer."
As a result, industries that have relied on the traditional pillars of status—from home ownership through to luxury items—may have to adapt their offerings to a demographic with their own picture of what rich looks like.
Lifestyle spending
Young consumers are really spelling it out when it comes to their status symbols—they want the very cards they use to say something about their standing. Enter Amex.
American Express cards have long been associated with wealth courtesy of the annual fees which come with having an account, and the travel perks which are irrelevant to lower-income consumers. The company has made no effort to hide the fact they're going after younger customers who want to flash a 'lifestyle' card at the checkout, and Gen Z and millennials are firmly on board.
Howard Grosfield, president of U.S. consumer services at American Express, told Fortune earlier this month Gen Z and millennials accounted for 75% of new consumer platinum and consumer gold accounts in 2023. But status symbols aren't defined just by how people spend their money, but what they spend it on as well.
Look no further than a note released by Bank of America last week, which found that every year since 2021 Gen Z has spent more at 'premium' grocery stores than they have at value chains. Conversely, despite standard-tier shopping still being the most popular across every generation, for Gen Z consumers the share of card spending in this category dropped approximately 4% between April 2019 and April 2024.
If you're looking for evidence of the phenomenon in action look no further than the Erewhon craze sweeping TikTok. The L.A.-based luxury food market has more than 26,000 videos beneath its hashtag, many of which are taste testing the brand's viral smoothies which retail for up to $23 each.
Meanwhile, millennials are fairly consistent in their shopping habits (preferring standard-tier, then value, closely followed by luxury grocery stores) though this flies in the face of how older generations shop. BofA data found Gen X and baby boomers are increasingly choosing value stores over their highest-end counterparts, adding: "These customers are even further along in their life stage and already paying for more necessities than their younger counterparts."
If it's not on TikTok it didn't happen
The difference when it comes to Gen Z—whether it's in their personal lives or at work—is that the majority have grown up with a smartphone within reaching distance and a social media presence since almost the day they were born.
As a result, King's College London's Brooks told Fortune, status symbols don't hold any value to Gen Z in the real world—they only matter if they're posted online. The "true status" the younger generation is hunting for is attention.
"Whether it's by showing they're not consuming and they're buying secondhand, or they're doing attention capital by saying 'Look how much I can spend on a smoothie and I'm buying all these things to increase my wellbeing at a price', the status is attention," she explained.
In her lecture halls, she added, two students flashing a trendy product will sit beside each other but never address the purchase: "It's entirely online. They might have come in with their Stanley water bottle or a few years ago the Balenciaga trainers. They come in, it's unspoken—that's part of the cache. There's a look but there's never an acknowledgement."
The power of status symbols is also only increasing because of social media, Brooks added. "Status symbols are becoming so much more important because they carry so much weight," she explained. "It's not just the brand, it's: 'What does the brand stand for? Does the brand align with my ethos, and what does that say about me as a consumer and my personal brand when I purchase which I will inevitably do, because that's what my generation does?'"
Get the bag
Gen Z and millennials are also toting their status symbols around on their shoulders—though older consumers might get deja vu. That's because shoppers on the younger end of the spectrum thrift vast swathes of their wardrobe, not only because they like how it looks but because it symbolizes their priorities in life.
According to research released this year by Capital One, 83% of Gen Z has shopped secondhand, with 34% saying they only buy from thrift shops. Their motivation is clear, Capital One found: 85% of secondhand shoppers said they wanted to save money. But on top of that 42% said they shopped secondhand because it was more sustainable, and 17% wanted to give back to communities.
Feedback also suggested that there is a status element to thrifting: 47% of those surveyed said secondhand shopping is 'cool' or 'trendy'.
Meanwhile research from authenticated, luxury good reselling platform The RealReal found shoppers were "trading down" from ultra-luxe brands, instead looking for more accessible options in "fair condition" (so show signs of some wear). Shoppers also have a specific style in mind: Y2K (2000s) and vintage pieces. Y2K "dominated" in 2022 and 2023, the report found, but that "hunger for authentic Y2K pieces may have kicked off a widespread interest in vintage."
This demand for sustainability is going nowhere, added Dr Brooks. She explained: "People have always consumed conspicuously, they consume to show themselves in a specific light. Gen Z want to see information about climate change, about mental health—they want to see that the company is considering that ... they want to show investment in brands in a company that stands for something they stand for."
Groceries are forever?
While Gen Z may be eating out less because of prices and reported "menu anxiety," their preferences are likely to shift as the economy around them changes and their spending power increases.
Returning to the BofA note, economist Joe Watford added that signs of Gen Z trading down are beginning, as they "age into" the wider economy with the likes of housing, auto and insurance costs to pay for. He explained: "Until recently, higher wage growth relative to other generations might have allowed [Gen Z] to shop at premium-tier stores for longer. But we think it is possible that the Gen Z cohort recently traded down to value-tier grocery stores to alleviate some of the pressures from taking on more necessity spending as they grow older."
Likewise, Brooks adds that while expensive groceries may be en vogue now in six to eight weeks a new product or trend will take over. The real killer of a Gen Z status symbol is also interest from other generations, she said: "A smoothie might be gone in an hour, but you're still showing that you've bought that smoothie—and that you have the social and cultural capital to know it's something of value. It's signaling that you know the rules of the game to show your status.
"So if someone in a different generation adopts one of their symbols you're out of place, you've overstepped. It looks like you're trying too hard—part of how [Gen Z] see themselves is not being millennial, is not being a Boomer."
Redefining luxury
A grocery-handbag-credit card combination might not exhibit the traditional consumer values many brands have become accustomed to. As Sophie Maxwell, partner, futures and insight at Pearlfisher, wrote for Fortune last year: "To attract and keep [Gen Z] engaged, luxury brands are rapidly having to move beyond the traditional notions of luxury–such as status, legacy, prestige, and heritage–towards a new set of values: inclusivity, sustainability, transparency, technology, and circular innovation."
Not everyone in the C-suite is convinced by this argument, however. Earlier this year, Pandora CEO Alexander Lacik dismissed the idea that Gen Z and millennials are buying lab-grown diamonds because they're sustainable, telling Fortune they just want something more affordable with a nice design.
Lacik added: “I’ll be dead before somebody comes into my shops and says, ‘Can you show me your sustainable products?’ It’s just not in people’s minds when they’re shopping this category.”
For the businesses which feel it is important to cater to customers' eco and ethical concerns, consulting giant warns KPMG in-depth understanding is paramount. Julio Hernandez, head of global customer centre of excellence, told Fortune that companies need to firstly ensure their commitments are both authentic and align with the values of customers.
He added: "As companies seek to influence their customers’ behavior towards greater sustainability it is necessary to understand customer values, attitudes and the motivation for positive behaviors. While the value-action gap is closing, overall firms need to understand the significant differences in attitudes and intent across different groupings in their customer base.
"This should open opportunities for innovation with new products and services. It will also enable companies to engage with their customers in a more meaningful way."
