The cool identity: mediating roles of luxury brand currency and preference in willingness to pay more

Luxury is traditionally defined as a status symbol, valued for its prestige and the brand image it conveys (Shukla et al., 2024). The global luxury market continues its steady expansion, with revenues projected to reach approximately US$490 billion in 2025 and an annual growth rate of 3.94% expected from 2025 to 2029 (Statista, 2024). At the same time, the industry is undergoing a major generational shift. Whereas earlier consumers associated luxury primarily with wealth, rarity, and exclusivity (Kumar et al., 2020), Millennials and Generation Z (Gen Z) increasingly value symbolic and emotional meanings that align with personal values and identity expression (Brandão and Magalhães, 2023). This transformation compels luxury brands to adapt, as consumer demand has moved away from ostentatious displays of wealth toward meaningful and connected consumption experiences.

In this evolving landscape, brand coolness has emerged as a critical strategic lever. Coolness enables brands to differentiate themselves in saturated markets and to capture the attention of younger consumers (Chen et al., 2023; Jiménez-Barreto et al., 2022). Coolness reflects perceptions of authenticity, relevance, and meaning (Loureiro et al., 2020). Importantly, coolness is conceptually distinct from ostentation, which emphasizes visible status display and conspicuous signaling (Han et al., 2010). A brand can be perceived as cool through distinctive style, cultural fit, and lifestyle associations (Warren et al., 2019). Across industries, coolness has been linked to competitive advantage and stronger consumer engagement. For example, Apple's functional coolness, W Hotels' attractive coolness among Millennials (Chen et al., 2023), and luxury hotel chains such as Hyatt and Hilton launching lifestyle sub-brands to leverage coolness attributes (Rauch, 2020).

Young consumers represent a pivotal segment in the contemporary luxury market (Singh et al., 2025). Understanding their values and consumption preferences is crucial, as luxury is no longer defined solely by exclusivity, wealth, and rarity (Kumar et al., 2020). Younger consumers often use luxury brands to express who they are and how they wish to be perceived within their social environment, and these identity meanings can shift as trends and reference groups evolve (Koskie and Locander, 2023). Despite their growing influence, research on young consumers' luxury consumption remains underdeveloped. Specifically, prior work has not sufficiently explained how coolness perceptions shape young consumers' willingness to pay more, or through which mechanisms coolness strengthens premium value judgments and brand choice. Addressing this gap, this study examines luxury brand currency and luxury brand preference as two complementary pathways linking brand coolness to willingness to pay more. Luxury brand currency refers to consumers' evaluation of whether a luxury brand remains reliable, secure, and worthwhile as a premium choice, while luxury brand preference reflects a stronger tendency to choose the brand over alternatives (Raza et al., 2024).

This study addresses these gaps by examining two core research questions: (1) How does brand coolness affect young consumers' willingness to pay more for luxury? and (2) What roles do luxury brand currency and brand preference play in mediating this relationship? Drawing on signaling theory and assemblage theory, the study conceptualizes brand coolness as a dynamic construct that enhances premium value judgments and brand preference. Using data from 296 young consumers (aged 18–35) who purchased luxury goods within the past three months, the model is tested through partial least squares structural equation modelling (PLS-SEM) and complemented with combined importance–performance map analysis (cIPMA). By integrating these theoretical and methodological perspectives, the study advances understanding of brand coolness in luxury markets and offers actionable insights for managers seeking to leverage coolness to strengthen consumer preference, enhance loyalty, and sustain premium pricing among younger generations.

Generational shifts have reshaped the global luxury market, with Millennials and Generation Z (Gen Z) emerging as influential consumer groups (Brandão and Magalhães, 2023). Unlike earlier generations, whose luxury consumption was often grounded in conspicuous display, these consumers place greater emphasis on self-expression, alignment with personal values, and emotional well-being (Rodrigues and Rodrigues, 2019). Their purchasing behaviors also differ; young consumers tend to be more price-sensitive and exhibit lower levels of brand loyalty (Brandão and Magalhães, 2023).

From a market perspective, the economic significance of Gen Z is striking. This demographic now constitutes nearly 40% of global consumers (Amed et al., 2019), with spending power in the United States alone estimated at US$143 billion and continuing to rise (Shin et al., 2022). Consequently, luxury brands view younger consumers as the fastest-growing segment, characterized by increasing disposable incomes and shifting consumption priorities (Sanyal et al., 2021). Importantly, their preferences extend beyond material exclusivity. Rather than perceiving luxury as indispensable, young consumers often favor products that reflect uniqueness, self-esteem, and authenticity, valuing meaningful consumption experiences over the pursuit of material wealth (Atkinson and Kang, 2022; Sun et al., 2017).

Brand coolness has become an important construct for understanding luxury consumption, particularly among younger consumers. Coolness is a socially constructed, subjective, and positively valenced attribute that reflects autonomy, cultural relevance, and distinctiveness (Warren and Campbell, 2014; Warren et al., 2019; Gurrieri, 2009). In luxury markets, these meanings are especially salient because luxury brands are evaluated not only for material quality or exclusivity, but also for the symbolic meanings they allow consumers to express (Khoi and Le, 2022). Therefore, luxury brand coolness plays a dual role as both a differentiation cue and an identity-relevant signal.

Consumer research suggests that possessions and brands are used to express who they are and how they want to be seen by others (Belk, 1988; Escalas and Bettman, 2005; Reed et al., 2012). This identity function is particularly relevant in luxury consumption, where brands carry meanings of taste, distinction, aspiration, and social recognition. Coolness strengthens these meanings by making a brand appear culturally current, distinctive, and socially desirable. For young consumers, a cool luxury brand is not only fashionable or attractive but can also support self-expression and social positioning. Koskie and Locander (2023) further show that cool brands are linked to consumers' motivations to stand out and fit in, and that both subcultural and popular forms of coolness can be used to signal identity.

Prior research also shows that brand coolness is multidimensional. Rahman (2013) emphasized its attractive and fashion-oriented qualities, while Loureiro et al. (2020) linked luxury brand coolness to extraordinary, genuine, and popular meanings. Warren and Campbell (2014) associated coolness with autonomy and deviation from convention, and recent luxury research distinguishes between niche and mass forms of coolness (Loureiro et al., 2024). Together, these studies suggest that coolness helps luxury brands become not only attractive, but also culturally meaningful and identity-relevant for young consumers.

Luxury brand currency refers to consumers' perception that a luxury brand retains trustworthy, secure, and worthwhile premium value (Raza et al., 2024; Walker, 2021). Although this concept is related to brand trust, brand equity, social currency, and brand meaning, it is not identical to any single construct. Brand trust concerns consumers' confidence in a brand's reliability and integrity, whereas brand equity represents the broader intangible value accumulated through awareness, associations, perceived quality, and loyalty (Chaudhuri and Holbrook, 2001; Pappu et al., 2005). Social currency explains how brands gain value when they circulate in social interaction and support consumers' symbolic positioning (Trudeau and Shobeiri, 2016). Brand meaning refers to the symbolic and identity-related associations that consumers attach to a brand, including what the brand represents in relation to taste, status, aspiration, and self-expression (Escalas and Bettman, 2005; Hudders et al., 2013).

However, luxury brand currency differs from these constructs because it focuses on whether consumers still regard the luxury brand as worth choosing and worth owning in the current marketplace. In luxury consumption, consumers do not only evaluate whether a brand is reliable, well-known, or socially meaningful. They also consider whether the brand continues to feel secure as a premium choice and whether ownership of the brand still carries value. Kidd (2023) emphasizes that brand trust is the key currency when brands seek to maintain value during uncertain market conditions. Raza et al. (2024) link luxury brand currency with quality confidence, ownership interest, value honesty, and perceived security. These dimensions suggest that LBC is not only a trust judgment, but also a marketplace judgment about whether a luxury brand remains safe, valuable, and premium-worthy. Therefore, LBC is understood in this study as consumers' evaluation of whether a luxury brand remains a reliable, secure, and worthwhile premium choice.

Importantly, LBC is not intended to replace brand trust or brand equity. Rather, it captures a broader marketplace continuity judgment regarding whether a luxury brand continues to retain premium legitimacy, symbolic relevance, and ownership value in the eyes of consumers. This distinction is especially important in contemporary luxury markets, where younger consumers continually reassess whether luxury brands remain culturally desirable, socially meaningful, and worthwhile to own under changing market and social conditions.

Luxury brand preference refers to consumers' relatively stable tendency to favor one luxury brand over competing alternatives, indicating a stronger likelihood of choosing that brand in purchase decisions (Kolańska-Stronka and Krasa, 2024). Prior research suggests that such preference is shaped not only by product-related evaluations but also by consumers' motivations and identity-relevant goals. Truong et al. (2010) show that luxury brand preference is strengthened when consumers pursue socially oriented goals, such as presenting a desirable image and gaining recognition from others, underscoring that luxury brand choice is often guided by identity-related motives rather than purely functional considerations. Similarly, Mandel et al. (2006) show that success-related cues can heighten consumers' desire for, and preference toward, luxury brands by activating aspirational self-views and motivating choices that align with a more successful self-image.

Signaling theory explains how actors communicate unobservable qualities to reduce uncertainty and facilitate decision-making (Spence, 1973). In luxury marketing, consumption operates as a signal of intangible attributes such as wealth, status, or personal values (Belk et al., 2010; Han et al., 2010; Loureiro et al., 2020). These signals are reinforced by intangible brand characteristics, including brand personality, heritage, and user imagery, which address consumers' social and emotional needs (Fuentes et al., 2023). Luxury purchases thus extend beyond functional utility, enhancing self-esteem and conferring social recognition (Fuentes et al., 2023).

For young consumers, signaling often reflects identity construction rather than ostentatious display. In emerging markets, luxury brands are used as symbols of lifestyle and self-expression (Raza et al., 2024). Social media intensifies this signaling function, as young consumers showcase their luxury purchases to communicate cultural awareness and uniqueness (Apaolaza et al., 2021). This behaviour contrasts with traditional conspicuous consumption, highlighting a shift toward symbolic self-expression and group belonging.

Assemblage theory, developed by Deleuze and Guattari (1987), views phenomena as dynamic constellations of heterogeneous elements whose interactions produce novel outcomes (Rokka and Canniford, 2016). Applied to luxury branding, assemblage theory conceptualizes coolness as an emergent property arising from the interaction of brand attributes, consumer perceptions, and cultural dynamics (Loureiro et al., 2020). Coolness, therefore, is not a fixed trait but a co-created and evolving construct.

Within the luxury sector, assemblage theory underscores how brands sustain cultural relevance by engaging with shifting values and aesthetics. For example, Balenciaga maintains its coolness by blending high-status luxury with subcultural streetwear collaborations, reinforcing its resonance with Millennials and Gen Z. Through such assemblages, coolness becomes a mechanism for sustaining consumer–brand relationships and ensuring continued cultural influence (Raza et al., 2024).

Integrating assemblage and signaling theory enables a more comprehensive understanding of brand coolness. From an assemblage perspective, brand coolness is not a fixed brand attribute, but an emergent market perception co-created through different dynamic elements (Rokka and Canniford, 2016; Warren et al., 2019). In the context of young consumers' luxury markets, these elements include brand-provided cues such as usefulness and status symbolism, consumers' identity-based interpretations, peer feedback and endorsement, social media circulation and amplification, and broader cultural narratives that shape what is considered current and desirable (Warren et al., 2019; Loureiro et al., 2020). Through repeated interactions among these elements, a socially shared sense of “what counts as cool” is continually assembled, stabilized, and updated. And it continues to shift as cultural preferences change.

Furthermore, signaling theory clarifies why coolness becomes influential once it is socially recognized. Specifically, coolness provides a socially meaningful cue that helps young consumers judge luxury value that is difficult to observe directly (Jiménez-Barreto et al., 2022; Connelly et al., 2011). Once recognized by consumers, it becomes a meaningful cue that guides luxury value judgments and increases consumers' willingness to pay a premium (Loureiro et al., 2020). Taken together, the two theories serve different but complementary roles in this study: assemblage theory explains why brand coolness is socially formed and continually revised, whereas signaling theory explains how perceived coolness guides consumers' evaluations of luxury brand currency and brand preference.

Brand preference refers to consumers' consistent choice of a particular brand, shaped by cognitive, emotional, and behavioral drivers (Ebrahim et al., 2016). It represents the cumulative effect of consumers' memories and feelings about a brand and forms the basis of brand loyalty (Kolańska-Stronka and Krasa, 2024). Preferences are often reinforced by perceptions of price fairness, product quality, and brand image, and are stronger when brands align with consumers' self-perceptions (Helgeson and Supphellen, 2004).

Brand coolness enhances these processes by fostering deeper emotional bonds through cultural symbolism and emotional resonance, which inspire brand love and belonging (Loureiro et al., 2020). Cool brands also satisfy consumers' needs for self-expression and identity construction, aligning with both the actual and ideal self (Gorbaniuk et al., 2025). This symbolic alignment strengthens consumer preference, discourages brand switching, and reinforces loyalty. Accordingly, this study proposes.

When consumers exhibit a strong preference for a luxury brand, it reflects not only their recognition of its superior value but also their emotional and psychological investment in the brand (Vogel and Watchravesringkan, 2017). Such preferences often influence purchasing decisions, leading consumers to justify premium prices as reasonable for the value and experience they gain (Solomon et al., 2014).

Research shows that Millennials and Gen Z consumers are particularly willing to pay premiums for favored luxury brands, as these brands provide symbolic, experiential, and psychological satisfaction (Tan et al., 2019). Strong brand preference deepens emotional attachment (Koskie and Locander, 2023; Li et al., 2022), encouraging consumers to invest financially to maintain their relationship with the brand (Park et al., 2013). Therefore, this study proposes.

Brand currency captures the intangible value a brand holds in consumers' minds, including trust, loyalty, and emotional capital (Raza et al., 2024; Walker, 2021). In luxury markets, this currency is especially critical for engaging younger consumers, who are typically price-sensitive and less brand loyal (Brandão and Magalhães, 2023). Strong brand currency builds resilience against switching, sustains consumer engagement during downturns, and can attract consumers to entry-level luxury products, as seen in the “lipstick effect” (Chao and Schor, 1998).

Coolness itself has been described as a form of brand currency (Southgate, 2003). Consumers' perception of a brand as cool signals not only external attributes but also deeper cultural and symbolic meanings (Loureiro et al., 2020). Such perceptions cultivate trust and reinforce the brand's social and cultural relevance, which are essential dimensions of brand currency (Raza et al., 2024). Moreover, cool brands enable self-expression, serving as markers of taste, identity, and prestige, thereby strengthening brand currency beyond functional attributes. Therefore, this study proposes.

WTPM represents the maximum price consumers are prepared to pay for a product or service of a given quality (Homburg et al., 2005). In the luxury sector, willingness to pay premiums is not merely about functional attributes but also reflects the symbolic, emotional, and cultural values that brands embody (Koskie and Locander, 2023). Consumers often pay higher prices to secure exclusivity, prestige, and self-expression (Santos and Schlesinger, 2021).

High brand currency strengthens this willingness by signaling trust, quality, and emotional commitment. When consumers perceive a luxury brand as holding strong brand currency, it enhances value recognition and confidence in paying premium prices. Prior studies confirm that brand trust and brand love enhance loyalty, which subsequently increases acceptance of higher prices (Santos and Schlesinger, 2021; Villagra et al., 2021). Therefore, this study proposes.

Younger consumers, particularly Millennials and Generation Z, place strong emphasis on the symbolic and emotional value of luxury consumption. They gravitate toward brands that reflect their identity and lifestyle, often willing to pay premiums to differentiate themselves from others (Loureiro et al., 2020; Koskie and Locander, 2023).

Subcultural coolness, characterized by uniqueness and autonomy, has been shown to have a particularly strong effect on willingness to pay more, even stronger than mainstream coolness (Koskie and Locander, 2023). Similarly, luxury brand coolness, often grounded in extraordinariness and authenticity, directly enhances perceived value and stimulates purchase intentions (Loureiro et al., 2020). By addressing symbolic and emotional desires, cool brands command premium prices and justify higher consumer spending. Therefore, this study proposes.

The conceptual model with the associated hypotheses is presented below as Figure 1.

A structured survey was designed to test the hypotheses and collect demographic information. Measurement items were adapted from prior studies (Raza et al., 2024; Koskie and Locander, 2023; Loureiro et al., 2020). A pilot study with 20 recent luxury consumers confirmed the face validity and clarity of the questions, leading to minor refinements.

The main survey was conducted between April and June 2025 via SoJump, China's leading online survey platform. To ensure that respondents were genuine luxury consumers, SoJump panel screening was applied. Participants were selected only if they reported having purchased at least one luxury brand product within the past three months. SoJump was selected for its extensive respondent pool (over 2.6 million users), data quality, and its younger user profile, which aligns with this study's focus (Zhang and Zhao, 2019; Del Ponte et al., 2024). A small electronic gift card was offered to enhance participation. In total, 296 valid responses were collected.

Of the respondents, 49.2% were female and 50.8% male. Slightly more than half (51%) were aged 18–25, with the remainder aged 26–35. Over 60% earned less than USD 5,000 monthly, while 19% reported USD 6,000–8,000, and the rest above USD 10,000. Sixty percent held a bachelor's degree. In the past three months, 65% had made 1–2 luxury purchases, 17% had made 3–5, and 18% more than five.

All constructs were measured on seven-point Likert scales (1 = strongly disagree, 7 = strongly agree), using measurement items adapted from prior studies (see  Appendix Table A1). Brand coolness was modelled as a second-order formative construct, adapted from Loureiro et al. (2020). Luxury brand currency and luxury brand preference were adapted from Raza et al. (2024). Willingness to pay more (WTPM) was measured with three items from Netemeyer et al. (2004).

Data were analyzed using partial least squares structural equation modelling (PLS-SEM) in SmartPLS 4.1. This method was appropriate due to the model's complexity and the data's non-normal distribution (Hair et al., 2019; Lew et al., 2020).

Brand coolness, as a higher-order construct, was estimated using a two-stage approach: first-order constructs were modelled with the repeated indicator method, and their latent scores were then used as indicators for the second-order construct.

To complement PLS-SEM, the study also employed combined necessity–performance map analysis (cIPMA; Hauff et al., 2024), which integrates necessity condition analysis (NCA) with importance–performance map analysis (IPMA). This provided multidimensional insights into the necessity, importance, and performance of brand coolness in shaping young consumers' willingness to pay more for luxury.

Variance inflation factors (VIF) were used to assess common method bias. Following Kock (2017), VIF values above 3.3 indicate potential multicollinearity. All values were below this threshold, confirming the absence of collinearity and method bias. The results indicate that common method bias is not a concern, supporting the robustness of subsequent analyses.

First-order constructs were assessed for reliability and validity (see Tables 1 and 2). Factor loadings ranged from 0.764 to 0.900, all above the 0.7 threshold, confirming indicator reliability (Hair et al., 2019). Cronbach's alpha values (0.837–0.887) and composite reliability scores (0.897–0.921) exceeded 0.7, demonstrating internal consistency. Average variance extracted (AVE) values ranged from 0.691 to 0.745, surpassing the 0.5 benchmark and indicating convergent validity. Discriminant validity was established as all HTMT ratios (0.401–0.555) were below 0.85 (Henseler et al., 2015).

For the second-order construct, brand coolness, bootstrapping confirmed significant contributions from its dimensions: Useful (0.41), High Status (0.316), Popular (0.386), and Subcultural (0.198), with all paths significant (p ≤ 0.002). VIF values (1.377–1.490) confirmed no collinearity concerns. The measurement model demonstrates strong reliability, convergent validity, and discriminant validity, validating both first-order and second-order constructs (see Table 3).

Bootstrapping results showed brand coolness significantly influenced luxury brand currency (LBC) (β = 0.614, t = 18.979, p < 0.001), luxury brand preference (LBP) (β = 0.637, t = 21.767, p < 0.001), and willingness to pay more (β = 0.327, t = 5.338, p < 0.001). Both luxury brand currency (β = 0.163, t = 2.825, p = 0.005) and luxury brand preference (β = 0.207, t = 3.689, p < 0.001) also had significant positive effects on willingness to pay more. Effect sizes (f²) ranged from 0.025 to 0.683. Adjusted R² values indicated moderate explanatory power: LBC = 0.375, LBP = 0.404, WTPM = 0.355. Predictive relevance (Q²) values were positive (LBC = 0.364, LBP = 0.393, WTPM = 0.301), confirming predictive validity. All hypothesized relationships were supported, with brand coolness emerging as a central driver of luxury brand preference, brand currency, and willingness to pay more (see Table 4).

Post-hoc mediation tests revealed significant indirect effects. Brand coolness influenced willingness to pay more via luxury brand preference (β = 0.132, t = 3.640, p < 0.001) and luxury brand currency (β = 0.100, t = 2.758, p = 0.006). Variance accounted for (VAF) indicated partial mediation: luxury brand preference explained 23.6% of the effect, while luxury brand currency explained 17.9%. Luxury brand preference and luxury brand currency partially mediate the relationship between brand coolness and willingness to pay more, highlighting both direct and indirect pathways of influence (see Table 5).

To enhance the managerial relevance of the findings, the study employed combined importance–performance map analysis (cIPMA), which complements PLS-SEM by combining sufficiency and necessity perspectives to identify both key drivers and “must-have” conditions for achieving high outcome levels (Hauff et al., 2024). Following prior recommendations, we set the desired outcome level at 85 (0–100) as a high-performance benchmark for prioritizing improvement efforts (Baah et al., 2024; Hauff et al., 2024; Sarstedt et al., 2024). Results confirmed that brand coolness, luxury brand currency, and luxury brand preference all demonstrated significant necessity (p < 0.001) with moderate effect sizes (d = 0.119–0.233), indicating their role as essential conditions for high willingness to pay more (see Table 6).

Brand coolness emerged as the most important predictor (importance = 0.560), though with relatively low performance (59.23) and the highest necessity failure rate (34.8%). This highlights coolness as the key area for managerial intervention. Luxury brand preference showed moderate importance (0.207) and performance (65.38), while luxury brand currency was least important (0.163) but demonstrated adequate performance (63.13) and a low necessity failure rate (19.59%). cIPMA results underscore brand coolness as both the most critical and underperforming driver of willingness to pay more, making it the top priority for luxury brand managers (see Figure 2).

This study extends prior coolness research (Loureiro et al., 2020; Warren et al., 2018; Koskie and Locander, 2023), by clarifying how brand coolness translates into young consumers' willingness to pay more in luxury markets through two relational mechanisms: Luxury brand currency and luxury brand preference. Luxury purchases often involve intangible and symbolic value that is difficult to verify before consumption, which makes consumers rely more on socially shared cues. In this context, brand coolness can translate into luxury brand currency, understood as consumers' evaluation of whether a luxury brand remains reliable, secure, and worthwhile as a premium choice. When coolness is socially recognized, it can strengthen consumers' confidence that the brand is still worth choosing and worth owning, which makes paying a premium feel more justified. Luxury brand preference provides a second pathway. It reflects consumers' favorable evaluations and choice commitment toward the brand, particularly in categories where differentiation depends on symbolic meanings rather than purely functional attributes. Together, these mechanisms suggest that coolness increases willingness to pay more not only by enhancing attraction, but also by strengthening a brand's socially shared value and consumers' preference to choose it.

Our findings also highlight several important insights. First, brand coolness exerts a significant influence on young consumers' WTPM for luxury. This underscores its role as a pivotal determinant of price acceptance in premium markets. By shaping perceptions of trustworthiness, distinctiveness, and symbolic relevance, brand coolness elevates both the desire to pay higher prices and the perceived currency of luxury brands. Simultaneously, brand coolness enhances brand preference by fostering stronger emotional bonds and identity alignment. These results align with previous studies linking coolness to loyalty and premium acceptance (Jiménez-Barreto et al., 2022), while also extending research that positions coolness as a builder of emotional connection and symbolic trust (Loureiro et al., 2020; Pantin-Sohier et al., 2025).

Second, this research advances the field by addressing recent calls for more parsimonious yet effective measures of brand coolness (Jiménez-Barreto et al., 2022). Importantly, the study reveals a cultural nuance: within the Chinese market, the subcultural dimension of coolness demonstrated the lowest explanatory power relative to other dimensions, such as usefulness and popularity. This contrasts with Loureiro et al. (2020), where subcultural coolness frequently emerged as a dominant driver of uniqueness and premium willingness. The difference may stem from cultural orientations: Chinese consumers, embedded within collectivist traditions, may prioritize conformity, mainstream recognition, and practical value over rebellion or subcultural differentiation. This finding highlights how cultural context shapes the salience of coolness dimensions in luxury consumption.

One possible explanation is that luxury consumption among young consumers in China is often shaped by public visibility and social judgment. In this context, consumers may prefer safer forms of coolness that are widely understood and easily recognized by others. As a result, popularity and usefulness-based cues can provide clearer signals of value, whereas subcultural coolness may rely on niche knowledge and therefore attract less shared agreement. In addition, social media platforms tend to promote broadly appealing trends, which can further strengthen mainstream forms of coolness while reducing the relative influence of subcultural distinctiveness.

This study contributes to luxury branding research by explaining how brand coolness strengthens young consumers' willingness to pay more through specific consumer-value mechanisms. Prior research suggests that luxury brand currency is important for sustaining consumer appeal when markets become uncertain, and consumers become more selective (Raza et al., 2024). However, less is known about which brand resources can strengthen LBC among young consumers. This study addresses this gap by showing that brand coolness can act as a strategic antecedent of LBC. In doing so, it explains why coolness matters beyond aesthetic appeal and also helps luxury brands remain culturally relevant, differentiated, and valuable as premium choices.

Second, this study clarifies the theoretical role of brand coolness by distinguishing between how coolness is socially formed and how it shapes consumer responses. Assemblage theory helps explain why brand coolness emerges through the interaction of brand cues, consumer interpretations, peer feedback, social media visibility, and changing cultural meanings. Signaling theory then explains how perceived coolness guides consumer evaluations. Once young consumers recognize a luxury brand as cool, coolness can serve as a symbolic cue of relevance, distinction, desirability, and premium value. Because these value elements are often difficult to evaluate directly before purchase, brand coolness helps reduce uncertainty beyond observable product features. This division of theoretical roles makes the model clearer: assemblage theory explains where brand coolness comes from, while signaling theory explains why perceived coolness affects consumers' value judgments and premium willingness.

Finally, this study clarifies how brand coolness translates into young consumers' willingness to pay more through two consumer-value mechanisms. Luxury brand currency is positioned as a luxury-specific value judgment, rather than as another label for brand trust, brand equity, or social currency. This helps reduce conceptual overlap among related constructs and shows that coolness supports premium willingness by strengthening consumers' confidence that the brand remains reliable, desirable, and worthwhile as a premium choice. Luxury brand preference captures consumers' stronger choice tendency toward the brand. Together, these mechanisms extend brand coolness research by explaining why coolness can support premium willingness in luxury markets, rather than only showing that coolness has a positive effect.

From a managerial perspective, the findings highlight the strategic imperative of cultivating brand coolness to engage millennials and Generation Z segments that increasingly dominate luxury consumption. It also works through two clear routes: it raises luxury brand currency and luxury brand preference, and both of these further increase willingness to pay more. This means coolness creates commercial value by strengthening consumers' confidence in the brand as a premium choice and increasing stable brand preference.

For planning and budget allocation, the cIPMA results provide a priority rule that goes beyond the structural path results. While PLS-SEM confirms that brand coolness significantly influences willingness to pay more, cIPMA shows where managerial resources should be allocated first. Brand coolness is high impact but not strong enough at present (importance = 0.560; performance = 59.23), and it has the highest necessity failure rate (34.8%). This indicates a minimum-level effect: if perceived coolness remains insufficient, it becomes harder for young consumers to justify higher prices, even when the brand performs relatively well on luxury brand currency or brand preference. Therefore, managers should treat coolness-building as an early and central task in marketing planning rather than as a decorative element added at the end.

The findings also guide how to build coolness in China by focusing on the four dimensions. First, usefulness-based coolness can be strengthened by helping consumers clearly recognize why the brand is worth the premium in everyday terms, while avoiding any impression of functional luxury. This can be achieved by making craftsmanship, material quality, and lasting value more verifiable and shareable, supported by high-end service signals such as authentication, repair, personalization, and attentive after-sales care. On social media, usefulness-based coolness is best reinforced through storytelling that makes value visible, such as atelier narratives, material proof points, and so on. Second, popularity-driven coolness depends on whether the brand is widely recognized as current and worth following. Social media is significant because it is where “what is current” is produced and reinforced for young consumers, through repeated exposure, peer sharing, influencer cues, and ongoing public discussion. Managers can strengthen popular coolness by keeping the brand visible in mainstream cultural conversations through timely campaigns, simple and widely understandable storytelling, and cooperating with social influencers. The goal on social media is not just posting, but building visibility and discussion, so the brand becomes more present in what young consumers see, share, and talk about, thereby supporting the brand's currency.

Next, high-status coolness, managers can use disciplined scarcity, priority access for core customers, and invitation-based experiences to ensure that status signals remain believable. This supports stable brand choice and strengthens the pathway from coolness to preference and repeat purchase.

Although subcultural coolness is less influential in this context, it can still be useful as a controlled differentiation tool. Managers can use small-scale, limited collaborations with niche creators or micro-communities to add a sense of edge and distinctiveness, while keeping the brand's core meaning clear and accessible to mainstream audiences. On social media, such collaborations work best when they are planned to generate focused discussion and high-quality sharing rather than mass exposure, so that the brand gains cultural credibility without confusing its broader positioning. Ultimately, aligning coolness with young consumers' self-expression and identity goals can strengthen brand preference and loyalty, and in turn support higher willingness to pay premiums.

Lastly, beyond commercial outcomes, luxury brand coolness may raise social responsibility considerations. While brand coolness can enhance desirability and cultural relevance, it may strengthen status comparison when communicated through exclusion and rarity. This concern is especially relevant to subcultural coolness, where distinctiveness can create symbolic value but may also reinforce social boundaries. Managers should build coolness through craftsmanship, authenticity, cultural creativity, and meaningful brand narratives, so that premium value is supported without encouraging unnecessary consumption or perceived social exclusion.

Despite its contributions, this study has several limitations that provide opportunities for future research. First, the study employed a cross-sectional design, which limits the ability to capture how perceptions of brand coolness evolve over time and how these changing perceptions may shape long-term luxury consumption behaviour. Because coolness is culturally dynamic and socially negotiated, future research should adopt longitudinal approaches to examine how coolness perceptions shift across changing trends, social media environments, and consumer life stages.

Second, the study focused specifically on young Chinese consumers, which introduces cultural specificity and may limit the generalizability of the findings to other luxury markets. In particular, the relatively weaker effect of subcultural coolness suggests that young Chinese consumers may place greater emphasis on socially recognized and culturally accepted forms of coolness rather than niche or rebellious forms of distinction. Future cross-cultural research could compare collectivist and individualist contexts to better understand how cultural orientations shape the relative importance of different coolness dimensions in luxury consumption.

Third, the study relied on self-reported survey data, which may be influenced by social desirability bias, especially given the symbolic and status-related nature of luxury consumption. Future studies could address this limitation by incorporating experimental designs, behavioral measures, social media observation, or longitudinal consumer tracking methods to capture more naturalistic expressions of coolness perceptions and premium willingness.

From a theoretical perspective, assemblage theory was used to explain the socially constructed formation of brand coolness; however, the empirical model operationalized only the downstream consumer-response mechanisms rather than the full assemblage process itself. As a result, the study explains how coolness influences consumers more clearly than how coolness is collectively formed and stabilized within luxury marketplaces. Future research could extend this work by examining how social media interactions, peer communities, influencer discourse, and cultural narratives dynamically co-create perceptions of luxury brand coolness over time.

In addition, although identity-related literature was incorporated to explain why coolness matters for young consumers, identity mechanisms such as self-brand connection, identity congruity, and identity signaling were not directly measured in the model. Future research should explicitly examine these identity-based processes to better understand how cool luxury brands become integrated into consumers' self-concepts and social positioning strategies.

Finally, the measurement of luxury brand currency (LBC) represents another limitation. Although this study conceptualized LBC as a broader judgment regarding whether a luxury brand remains reliable, secure, and worthwhile as a premium choice, the adapted scale primarily captured trust-related and security-related evaluations. Future research should develop and validate a more comprehensive multidimensional LBC scale that better captures symbolic relevance, marketplace legitimacy, ownership value, and continued premium worthiness within contemporary luxury markets.