Is there a generational shift in luxury consumers from baby boomers to Millennials?
Shoppers roughly between the ages of 18 to their early 30s are the fastest-growing luxury consumer. In 2011, they spent 31 percent more on luxury purchases than they did the year before, and they did it at full price. Boomers, the report found, saw a 28 percent growth in luxury spending and purchased the bulk of their luxury items on discounted flash-sale sites.
A recent American Express Business Insights report noted the proliferation of flash sale-websites, a billion-dollar industry in which sites such as Gilt.com, Ideeli.com and Rue La La offer members luxury items at deep discounts that are only available during allotted times.
The Luxury Institute report offers further evidence that these flash sites have given shoppers an appetite for luxury items and are increasingly patronizing full-priced online sites.
Duke Greenhill, founder and CEO of Greenhill+Partners writes that by 2015, Millennials are expected to be the largest consumer demographic and nearly a third of the U.S. population.
Greenhill notes several differences between boomers and Millennials, whose attitudes seem to echo their elders’ question-authority mantra. Whereas Boomers exhibit “unquestioned luxury brand loyalty” and “accept that things simply are what they are,” he writes, “Millennials scrutinize brands and offer allegiance only to those who premium price points are justified.”
And whereas boomers purchase luxury items with an “I can” attitude that bespeaks their view of luxury as a “material reward,” Millennials view luxury goods as aspirational, “”not a symbol of achievement, but rather a promise to one’s self that (they can) achieve,” Greenhill says.
In addition, whereas boomers may view luxury goods for their exclusivity, Millennials display more of a “pack mentality” that Greenhill terms “inclusive exclusivity,” an attitude that states “I can and you should come along.”
Industry analysts cite Whole Foods as an object lesson on how to attract this new generation of luxury shopper. The high-end grocery store has a socially responsible ethos that resonates with younger people. Shelf displays educate customers about the products and why prices are comparatively higher.
Other brands attract tech-savvy Millennials with engaging social media strategies.