[LUXURY] | #Luxury #Brands Are In Danger Of Losing American #Millennials | @Forbes (12/09/2017)
FROM PAMELA N. DANZIGER | FORBES | http://bit.ly/2gZkH16
Luxury Brands Are In Danger Of Losing American Millennials: How To Get Them Back
Deloitte, the international consulting and financial advisory firm, recently published a report on millennials and their attitudes and purchase motivations in the luxury market. Entitled “Bling it on: What makes a millennial spend more,” it examines a survey with over 1,000 millennials, aged 20-30 years, in the U.S., U.K., Italy and China who expressed an interest in luxury spending.
Many of the findings were not unexpected, such as their willingness to purchase luxury goods online and the influence of social media and brand websites as a source of information to propel their luxury purchases.
Many of the findings were not unexpected, such as their willingness to purchase luxury goods online and the influence of social media and brand websites as a source of information to propel their luxury purchases.
But one finding popped for me: American millennials trailed far behind the other markets in their purchases of high-end fashion or luxury goods. Over one-fourth of the American millennials report no luxury purchases of $500 or more in the last 12 months, whereas the survey average was only 16%.
This finding has significant implications for luxury brands marketing in America because consumers’ past purchase behavior is a good predictor of future behavior. If 26% of millennials who are interested in luxury goods haven’t purchased any recently, which was reported by the Bain Luxury Study, it certainly doesn’t bode well for the future of luxury brands in the U.S., the world’s largest luxury market.
The U.S. also leads the world in the number of affluent consumers. Credit Suisse reports that there are 13.6 million American adults with a net worth above $1 million. That is over 40% of the world's millionaires and more than the next eight countries combined.
In Unity Marketing’s in-depth “Millennials on the Road to Affluence” study, which included both qualitative and quantitative research, we studied young people’s attitudes about luxury. Our qualitative sample was a select group of millennials having post-graduate educational levels and who are pursuing careers that will lead to high incomes, such as law, medicine and health, engineering, tech and business. One of the respondents said “Luxury is nothing but a marketers’ label” which he said meant it was overpriced.
The millennials are nothing but smart shoppers who know how to use all the tools at their disposal to find the best value when shopping. While the Deloitte study shows millennials are most motivated in their purchases by quality, followed by uniqueness, the brand name, its ethics and image did not particularly motivate them when comparing a luxury versus a more affordable alternative. Applying the descriptor “luxury” to a particular brand may well turn these young people off more than it turns them on when it comes to attracting their attention and getting them to buy.
What luxury brands are selling may not be what millennials are buying
The U.S. also leads the world in the number of affluent consumers. Credit Suisse reports that there are 13.6 million American adults with a net worth above $1 million. That is over 40% of the world's millionaires and more than the next eight countries combined.
In Unity Marketing’s in-depth “Millennials on the Road to Affluence” study, which included both qualitative and quantitative research, we studied young people’s attitudes about luxury. Our qualitative sample was a select group of millennials having post-graduate educational levels and who are pursuing careers that will lead to high incomes, such as law, medicine and health, engineering, tech and business. One of the respondents said “Luxury is nothing but a marketers’ label” which he said meant it was overpriced.
The millennials are nothing but smart shoppers who know how to use all the tools at their disposal to find the best value when shopping. While the Deloitte study shows millennials are most motivated in their purchases by quality, followed by uniqueness, the brand name, its ethics and image did not particularly motivate them when comparing a luxury versus a more affordable alternative. Applying the descriptor “luxury” to a particular brand may well turn these young people off more than it turns them on when it comes to attracting their attention and getting them to buy.
What luxury brands are selling may not be what millennials are buying
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