Avy Punwasee, Partner at Revenue Management Labs, was recently featured in Forbes where he highlights how Gen Z are reshaping what luxury means, shifting the focus from exclusivity and status toward experience, values, and authenticity. This article explores how pricing and brand leaders can rethink premium offerings, pricing strategies, and value propositions to align with a new generation’s willingness to pay.
Read the article below and see other featured article written by Avy.
Table of Contents
Premium pricing used to mean exclusivity. A higher price implied higher status. That model no longer resonates. Gen-Z, an extremely informed and values-driven generation, is rewriting what “luxury” means. They no longer equate price with prestige. They assess whether the price feels justified, a reflection of transparency, personalization and ethics.
According to a First Insight study, 73% of Gen-Z consumers are willing to pay more for sustainable product. Many are also looking for brands they perceive as authentic and ethical. Premium is no longer what costs more. It is what feels fair and personal.
Premium Without The Price Tag
For Gen-Z, price is one factor in a larger equation. A Queue-it survey found 90% of Gen-Z shoppers will pay a premium for a brand they trust. Price is no longer shorthand for quality but a proxy for integrity.
Meanwhile, PwC consumer trends show a paradox. Although 79% of Gen-Z consumers surveyed waits for sales, they often define value through emotional and social alignment. They want to understand what drives price, not just see a discount. Luxury resale platforms such as The RealReal and StockX democratize access to premium goods. They show that value today comes from inclusion, not exclusion.
Experience Over Ownership
Gen-Z grew up in the subscription economy. Platforms like Netflix and Apple Music trained them to value participation more than possession. Access is the new ownership.
However, these models often result in customers spending more over time than if they had purchased the product outright. This happens because subscriptions allow them to fit spending into monthly budgets, leading to higher lifetime value for brands.
A PwC report shows Gen-Z expects to reduce holiday spending by 23%. I’ve noticed this is not always due to lack of purchasing power, but because they spend more intentionally. Many people from Gen-Z allocate money toward live events, travel and curated experiences that align with identity.
For premium brands, this means the value conversation has shifted. The question is not how exclusive the product is, but how meaningful the experience feels.
Shared Luxury And Personalization
Customization is the new prestige. A recent study found 81% of Gen-Z shoppers have changed a purchase decision based on brand reputation or actions, and 73% would pay more for sustainable products.
Personalization strengthens emotional commitment. When products and services are tailored to the individual, customers may interact more frequently with the brand and are more likely to become ambassadors. This deepens loyalty and increases lifetime value, provided pricing reflects clear value and fairness. I think brands like Glossier and Nike illustrate this by turning self-expression into a core part of the product experience, transforming buyers into participants.
How Leaders Can Rethink Premium
1. Move from markup to meaning.
Price should reflect what customers gain, not what a logo implies. Leaders can start by mapping the real outcomes customers receive, for example saved time, reduced frustration, higher performance or a sense of belonging. This can be done through interviews, journey mapping and small experiments that test which benefits customers value most.
Teams should build price tiers that anchor to these outcomes instead of internal cost models. A useful question is, “If our brand disappeared tomorrow, what value would customers miss most?” That answer becomes the foundation for pricing tied to meaning.
2. Redefine premium tiers.
Segment by experience quality, not income bracket. This begins with studying what creates a “premium feel” for your specific customers, such as speed, customization, access or elevated service.
Leaders can segment customers by what experience they expect rather than by how much they earn. Practically, this might look like identifying groups that prefer fast problem resolution or groups that want a curated journey with more human support. Once defined, companies can build premium tiers around these experience types. This approach avoids outdated assumptions about wealth and instead shapes pricing around the level of experience customers choose.
3. Track new metrics.
Measure personalization uptake, perceived fairness and emotional loyalty alongside profit. To do this well, leaders can add simple sentiment checks into customer touchpoints such as post purchase screens, support tickets or loyalty apps.
Metrics like perceived fairness can be measured by asking, “Did this feel worth what you paid?” Personalization uptake can be tracked through product analytics. Emotional loyalty can be monitored through return rates, advocacy signals and qualitative feedback.
Leaders should combine these with traditional financial measures to understand whether pricing builds trust over time, not just short-term profit.
4. Design for flexibility.
Offer modular pricing and hybrid subscriptions that meet customers where they are financially. This starts with breaking your offer into clear components so customers can pay for what they need and opt into extras. Leaders can explore hybrid models where customers can mix predictable subscription elements with variable pay as you go usage.
Companies can also provide seasonal or temporary plans for customers who want access without long-term commitments. By offering flexibility, companies position pricing as a partnership with the customer rather than a fixed demand.
Conclusion
For Gen-Z, premium is often rooted in belonging and fairness, not luxury and scarcity. They want honesty about what drives price and personalization that reflects individuality.
I think the brands that win will explain their pricing clearly, invite participation and deliver experiences that justify what customers pay. In this generation’s view, the highest price tag is not the signal of value. The story behind it is.
