Cost-of-living pressures are not reserved for cash-strapped families. It appears luxury-purchasing Gen Z and Millennial shoppers are now even more discerning, “prioritising quality and sustainability” in their high-end choices, new research shows.

For these consumers, “luxury goes beyond the product – it also means a buying experience that is seamless and secure”, according to research from European banking platform Tink centred on over 2,000 UK consumers and over 500 UK high-end merchants.

The report says Millennials, “many now in their peak earning years, and Gen Z, an emerging spending powerhouse”, are driving a shift toward ‘accessible luxury’ – prioritising quality, sustainability and secure, seamless shopping experiences”.

Its data shows the two age groups are purchasing the largest share of luxury items — averaging 16 and 14 items a year, respectively — “representing a significant market opportunity for high-end merchants”.

But currently 62% of luxury Gen Z and 68% of Millennial shoppers surveyed “are hesitant to make high-value online purchases due to fears of payment failure and fraud”. Tink’s data shows in these groups who shop for high-ticket and luxury goods, payment security is a top concern for a respective 58% and 64%.

The research also shows a respective 36% and 42% want a payment method with no hidden fees, while 34% and 38% demand one that minimises fraud. And this apprehension translates into hesitation, with over half (56%) and (52%) reluctant to make high-value online purchases due to a fear of payment failure and fraud.

And in a competitive market, secure and flexible payment solutions offer merchants “an edge”, with 68% of high-end merchants surveyed planning payment upgrades this year. Alongside those demands are a “streamlined payments experience [as] a critical element of the shopping journey”. In response, 85% of merchants surveyed are now focused on delivering a seamless and secure payment experience, it says.
 
Meanwhile, these consumers are also becoming more discerning with their purchases, opting for products that combine quality with ethical production. Key drivers for purchase include 73% of Millennials and 64% of Gen Zers surveyed wanting to invest more in quality purchases that will last. Sustainability also plays a key role in decision making, with 63% of Gen Z and Millennials (62%) willing to pay more for ethically made items.
 
Three-quarters of both, (76% and 75%), are also willing to pay more for the reputation of the brand, “reflecting the importance of trust – particularly in areas like payment security – in their purchasing decisions”.
 
Lucy Grant, Tink commercial strategy director, said: “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.

“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.”