Few demographics are more discussed than millennials – young people born between 1980 and 2000. The typical millennial was born in the boom years, raised by doting parents who wanted the best for them, wanted to be cool and were financially secure. They came of age during the recession but maintained their sense of empowerment, inspired by young tech millionaires in the media and a freelance culture.
Leisure time and pushing boundaries are proof of a life well lived. Well-travelled and connected digital natives, many millennials have distinctly global worldviews. Their careers are more like chessboards than paths.
In less than four years, older millennials will enter their peak earning years, supplanting Gen X and baby boomers as the economy’s biggest spenders. millennials are not a future to plan for – they are incoming luxury consumers.
With brand relevance at stake, here are 10 things you need to know about millennials and luxury:
- Luxury is something of enduring value
Millennials will pay a premium for luxury if and when they will provide a long-term dividend. They seek out durable, high quality, timeless styles that leave a lasting impression.
Havas LuxHub research shows that luxury means more to millennials when bought for themselves rather than received as gifts, because they value the sense of achievement they associate with purchasing luxury brands.
- Experiences have the most enduring value
The underlying factor is their preference for experience over products, because memories last forever. In our survey, 62 per cent of 18-26 year olds preferred to receive $10,000 toward an experience, compared to 38 per cent for a product.
Hence, brands need to emphasise experiences throughout retail, brand worlds (typically communicated through advertising or content), and the ownership experience itself, the feeling of status from developing a relationship with a prestige brand, particular through repeat purchases.
- Modern luxury over heritage
Millennials strive for luxuries of enduring value, but they seek out modernity and contemporary relevance. They prefer content that is innovative and inspirational, like artistic fashion editorials (50 per cent), style guides (39 per cent), and trend reports (38 per cent).
- Millennials are comfortable with fakes
Millennials are not put off by fakes or knock-offs – affluent Millennials will even boast about them – but the brand experiences that really matter to millennials cannot be faked.
- Millennials discovery luxury on social media
In our survey, 42 per cent of 18-26 year old millennials said they were most likely to discover new luxury brands on social media, compared to just 17 per cent of those 35 and older, who preferred print (29 per cent).
- Millennials live on their mobiles
Two years ago, twice as many millennials (43 per cent) as consumers 35 and older (20 per cent) were mobile dominant. Marketers should assume that their smartphones never leave their side, and cater to millennials through mobile-first experiences.
- The social media of choice is Instagram
Instagram is the most popular social media among younger millennials – 88 per cent listed it among their top-two social platforms. Facebook, the most popular channel for 27-34 year olds (87 per cent), was only mentioned by 57 per cent of young millennials. All Millennial age groups considered Instagram the most appropriate channel for luxury brands.
- Social influencers are the media
With readerships in the millions, social influencers have become media in their own right, even surpassing established fashion publications. Paid endorsement from bloggers like The Blond Salad and Man Repeller is replacing traditional advertising.
- Millennials don’t want an Apple Watch
The hype surrounding wearables like the Apple watch has failed to excite millennials. 81 per cent of younger millennials told us they would prefer a $7,000 Rolex to a $15,000, top-of-the-line Apple Watch. To them, the Apple Watch was for middle-age people trying too hard.
- Chanel and Hermès are iconic, after which brands jockey for the cool stakes
Chanel and Hermès are holding their positions as iconic brands that represent timeless style and taste among all age groups. Apart from them, younger millennials chose Saint Laurent, Valentino and Gucci, whereas older millennials and 35+ preferred Céline, Prada, Chloé, Tom Ford and Dior.
Marketers must take a long-term view of their relationships with millennials – and grow with them. Luxury marketing needs be present in millennials’ pockets, reach them through channels they trust, with content they love, and enable millennials’ to express themselves. To create real brand value, this content has to be relevant and inspirational.
Above all, luxury marketers need engage millennials through brand experiences – not transactions.
By Tammy Smulders