Millennials, the luxury and personal fulfillment
The luxury market is changing - and all thanks to its consumers. Millennials' consumption is ever-increasing and the question is burning hot in the market: What do they want ?
Millennials represented 32% of spending in the luxury market in 2019, a number which is expected to increase in the following years (BCG & Altagamma, 2019).
Born between the early 80s and the late 90s, Millennials come with their own set of expectations towards the market. First of all, luxury items are correlated to a desire to be seen and social media allows for a much higher number of viewers, including potential new customers but also people which may initiate negative word of mouth.
Secondly, raising awareness towards social responsibility and sustainability is a factor of growing importance; Millenials will be more inclined to purchase from brands that contribute to sustainable practices. Then, collaborations between luxury brands and also youth-inspired designers especially cater and attract Millenials. Finally, the second-hand market for luxury items is growing as consumers look into the resale value of their potential purchases.
Millennials' wants and needs generate their own set of challenges and today’s luxury brands will have to adapt to them in order to reach this crucial segment of the luxury market.
For Millennials, luxury no longer refers exclusively to expensive or scarce items such as handbags, shoes, and jewelry. They are prioritizing lifestyle and experience over tangible belongings. Millennials choose brands based on their personal values and passion (Hoffower, 2019). They are willing to spend extra money on personalized experiences such as unforgettable travel experiences with VIP treatment, immersive Tequila event tastings, touring cultural exhibitions to meet artisans etc. They are also very active on digital platforms, looking for online shopping experience, accessing a great source of information and sharing their unique stories on social networks (Rowe, 2015).
And that is the major aspect which makes traditional luxury tremble in fear: Millennials do not cherish the ownership of something only a few can afford, but rather the stories they can tell by experiencing something unique; that storytelling aspect is central in their attitude, and that is what makes them unique compared to their predecessors.
That uniqueness can be, however, double-edged, as they expose their stories on social media and may rent rather than buy luxury, something that might be seen as desecration.
Anyone could access luxury, especially so when every other social media post contains it ! Is it necessarily a downfall ? Brands have and will learn to adapt; offering an exclusive experience rather than an exclusive product (Dalziel & Pow, 2018).
We can find technology brands most popular with millennials and Generation Z, such as Apple and Tesla. Also Gucci is popular with both male and female consumers.
Millennials also demand more services and features, such as personalization, customization, exclusive or limited products or even co-branded styles (collaborations etc.). They want to spend less to get more.
(c) The Top 10 Luxury Brands Millennials & Gen Z Most Want To Own - YPulse
Indeed, if we only look at the generational aspect, we can see that millennials enter the luxury market with clear tastes and behaviours: They have a growing interest in ecology. They aim for more experiential and life enhancing luxury consumption, etc.
There are therefore trends common to this generation that can be used to define a marketing strategy targeting millennials. But it may seem excessive to make generational differences a more decisive determinant of behavior than cultural, territorial, and value affiliations, among others. In the end, it is a bit excessive to define "THE" millennial luxury consumer because there are generational commonalities but individual dissensions due to factors other than their year of birth.
In the future, the Millennials will certainly still want to have experiences more than buy a product. But they should get more and more personalized and emotional, as they are already used to luxury experiences (Rowe, 2015). Additionally, while they are inclined to buy some luxury product, Millennials will not necessarily be loyal to one brand and will certainly change their brand if a brand presents an interesting aspect (Hoffower, 2019).
With age, they will think more about what the product or experience they buy represents for them and which values it has. They will have to get something rare, authentic and inspiring (Savenier, 2015).
The Luxaholic Team
REFERENCES
BCG-Altagamma True-Luxury Global Consumer Insight Survey Dec 18/Jan 19 http://media-publications.bcg.com/france/True-Luxury%20Global%20Consumer%20Insight%202019%20-%20Plenary%20-%20vMedia.pdf
Rowe, L. (2015). Millennials & the new luxury. Publicis Experiences. Retrieved from http://www.publicisxp.com/whitepapers/PublicisXP_GenYAndTheNewLuxury.pdf
Hoffower, H. (2019). Rich millennials are creating new trends and status symbols — here are 7 ways they're redefining what
luxury looks like. Business Insider. Retrieved from https://www.businessinsider.com/rich-millennials-redefining-luxury-experiences-fashion-influencers-2019-4?
r=US&IR=T#they-seek-exclusivity-and-customization-in-their-experiences-2
Dalziel & Pow (2018). Why accessible luxury is winning over Millennials and Gen Z. Why accessible luxury is winning over Millennials and… | Dalziel & Pow (dalziel-pow.com)
The Top 10 Luxury Brands Millennials & Gen Z Most Want To Own. (2019, July 15). YPulse. https://www.ypulse.com/article/2018/01/16/the-10-luxury-brands-millennials-most-want-to-own/
Morhart, F. 2021. Luxury Marketing [slides]. HEC Lausanne. Unil
Wikipedia Millennials. [visited on 26.09.2021]. available at https://en.m.wikipedia.org/wiki/Millennials
Anne-Sophie Savenier (Sep 2015) Study: Behavior of Luxury Consumers Around the World Becoming More and More Complex. Retrieved from: https://www.albatrosscx.com/en/behavior-of-luxury-consumers-becoming-more-complex
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