Let me start by saying I'm huge---HUGE--fan of literary fiction. Check out my bio and you'll see names like Anne Tyler and Robert Morgan in my favorites. But literary fiction is only good if it's done well. Well-written literary fiction makes you see the world in a different way, with a different set of eyes.
In general, literary fiction is more about character arc than plot. It moves a little slower, there's more subtlety. It's brain food, written with a deliberate purpose. One of my recent faves is MUDBOUND, by Hillary Jordan. It deals with racism and sharecropping in the post WWII Deep South. (If you haven't read this already, RUSH TO THE LIBRARY OR THE NEAREST BOOKSTORE NOW! You can read the blog later.) The novel is filled with evocative prose, tangible characters, and that indefinable 'something'. Jordan's style allows the reader to connect with all her characters---even the really mean ones. But stuff happens. Lots of stuff. There is a plot---there are even subplots. And there is a social purpose.
Literary fiction is NOT rambling, unconnected prose that goes nowhere. Even if it's beautiful prose. Even if the reader can taste the figs, and smell the fresh cut grass, it still has to go somewhere. The reader MUST see the evolution of at least one of your characters, and the only way to nudge a character into this metamorphosis is by using events---internal or external---to create that change.
And, the reader has to GET IT. You can't expect a sale, or a huge success, if your book is so erudite that only Ivy League professors get it. Most writers who are capable of this type of elevated writing are at Iowa Writers Workshop or in an MFA program. Not all, but most.
You're kidding yourself if you think you can pen a 80K novel where nothing happens, pawn it off as literary and make a big sale. Successful literary fiction often makes the transition to the CLASSIC SHELF. That's no easy feat. Did Harper Lee realize the social importance of TO KILL A MOCKINGBIRD? Would she have classified her work as literary fiction? Now, it's a classic. Every high school in America reads it. Most of us have seen the old black and white movie. Not only is it a BEAUTIFUL BOOK, it's an IMPORTANT BOOK.
If you think you write literary fiction, read or reread some of the contemporary greats: Louise Erdrich, Margaret Atwood, Anne Tyler, Robert Morgan, Ian McEwan, Cormac McCarthy, Richard Russo, Geraldine Brooks, Barbara Kingslover, . Make sure you're in the same ballpark. Not that you can write as well, but that you understand the genre well-enough to properly classify your work.