Definition: the meaning of Millennials
Born in the 1980s or 1990s (precisely between the years 1981 and 1996 according to research firm Pew Research Center), Millennials, also known as Generation Y, are one of the most talked-about generations in current business literature. Millennials make up one of the largest and fastest-growing segments of the luxury consumer base today.
Beyond an age group, Millennials’ characteristics (see below) are what make this consumer segment such an important group for luxury brands.
The Millennial generation has grown up in the age of Internet and mobile technologies. Millennials are digitally fluent and have new expectations for what a luxury brand should deliver, especially in terms of omnichannel experience. Millennials are fast becoming the most valuable luxury consumer segment. Together with the younger Generation Z consumers, Millennials are indeed making up more 40% of all luxury spending and generated 100% of the global luxury growth.
Why luxury brands are focusing on their Millennial consumers?
Luxury brands are very focused on their affluent Millennial consumers because of the long-term potential they represent. An industry once dominated by middle-aged high-net-worth shoppers is now seeing a new generation of young and affluent consumers: Millennials are the growth engine of the luxury industry and the new power purchasers.
Bain & Company predicts that Millennials and Gen Z will account for nearly half of the total luxury goods sales by 2025, bringing the value of the global luxury industry to €290 billion ($356 billion).
The stakes are high for luxury brands which need to transform their traditional business model to accommodate the values and expectations of this younger affluent generation.
As Millennials enter their prime spending years, luxury brands need to understand how Millennials think and shop differently from the previous generations if they want to remain relevant.
Millennial-savvy and digitally-nimble brands are the ones that will win in the business of luxury
What are Millennials looking for in luxury brands?
If Millennials are a very diverse generation, they do share some defining attributes. Luxury brands have to consider what drives this newer generation of affluent consumers. In an ever-changing digital era, Millennials are seeking to engage with high-end brands that align not only with their aesthetic preferences but also with their personal values.
There are four important Millennials characteristics that high-end brands need to cater for:
- Millennials seek self-expression
- Millennials value experience over ownership
- Millennials spend more on brands that are socially responsible and environmentally conscious
- Millennials are omnichannel shoppers