Are You Ready to Serve the Next Generation of Customers?
Millennial-generation affluents bring a unique perspective to the luxury market --
Marketers must understand and deliver on those expectations like these hotel brands have done
October 2, 2012 Stevens, PA -- Congratulations! You have built a successful luxury brand with a loyal customer base of affluent customers 35 years and older. Your advertising messages hit home with these customers. Your brand is featured in all the best stores that attract the right customers. Your products exceed the customers' expectations of quality, design and workmanship. Given your past success, you are going to keep doing what you've been doing, so continued success is assured.
"Not so fast," warns Pam Danziger, president of Unity Marketing and author of a new study of the next generation of luxury consumers, entitled Wealth Wave: Millennials and their Luxury Aspirations. "In our new study we found that young people are increasingly skeptical about luxury brands and whether they really deliver a higher quality experience over more affordable products. For this generation, just calling something a luxury brand doesn't make it so. Using the label 'luxury' to describe a product or a service often means it is over-priced and hoity-toity. They are a generation in search of meaning and they will link up with brands that truly understand their needs and priorities."
These hotel brands model how to get ahead of the curve and adapt to young travelers' special needs
"Luxury marketers face a challenge repositioning their brands for this new generation of highly-educated soon to be affluent young people," Danziger says. "Luxury brands will have to adapt to meet this next generation of luxury consumers in the marketplace." She points to the hospitality industry as getting ahead of the curve to find connections with young travelers and build brands that will capture their dollars.
For example, many of the major hotel brands have adapted their hospitality experiences for hip, young, millennial-aged travelers. The Hyatt offers Andaz and Hyatt Place; Starwood has W Hotel and Aloft; InterContinental presents the Indigo and Marriott is opening EDITION hotels designed by Ian Schrager. With these new offerings these brands understand that this new generation doesn't want to same hotel experiences that their parents or even older GenX siblings did. The changes go beyond mere redecorating to totally new hotel brands that deliver comfortable lobbies that encourage socializing and bars than spill over into the lobby, hotel rooms with power centers, high-speed WI-FI throughout the facility, and state of the art fitness centers.
Unity Marketing's new investigation of the millennial generation and their luxury expectations will help marketers get ahead of the curve and prepare for the coming next generation of customers who will not want the same-old products, brands or experiences that previous generations did. Danziger says, "In my recent book, Putting the Luxe Back in Luxury, Peter Francese, founder of American Demographics magazine and authority on population trends, reminds us that young people are typically turned off by the very things that attracted older consumers. He said,
'If your aging Baby Boomer mother or father has been buying Louis Vuitton or whatever luxury brand, the chances are pretty slim that the next generation is going to buy into it. The way it always has worked is that whatever one generation embraces, the next generation avoids. It would behoove anybody who has been making money selling luxury to Baby Boomers to consider how they can reposition themselves to alter their products and perceptions for the next generation.'
Each generation defines what luxury is - Millennials will bring their own unique perspective and expectations into the luxury marketplace
The luxury market is poised to undergo a transformation as a new generation of affluent Millennial customers assume dominance in the marketplace. This transference of consumer power will occur on or about 2018-2020. Thanks to our understanding of the demographics of affluence, we can reliably predict who among this generation 71 million people strong are on the road to an affluent lifestyle. This study, Wealth Wave, is an in-depth investigation into the mindset of ambitious, highly-educated young people that will take the lead as luxury customers in the future.
Our Research Goals & Objectives
Unity Marketing set out to investigate the mindset and consumer psychology of young people (aged 24-31 years) on the road to affluence. They were selected to participate in a series of qualitative discussion groups by the following having advanced degrees in high-paying fields (i.e. medical, legal, business administration, computers/technical, architecture) and ambitious career goals. The discussions focused on:
- How will these young people behave as luxury consumers as their affluence grows?
- How do they feel about money and wealth?
- What luxury means to them?
- What is their American Dream? Where does materialism fit? What is the role of status and status symbols?
- What do they aspire to achieve in their lives?
- What does a luxury lifestyle mean to them?
Further, the discussion included a deep-dive into these consumers' expectations and desires for:
- Fashion apparel and fashion accessories
- Hotels and hospitality
- Fine Dining and restaurants
- Luxury retail including brick-and-mortar stores and online internet shopping experiences.
The people we studied were in no way representative of their generation. They were selected because they are exceptional, high achieving with ambitious personal goals. They will be luxury marketers' future customers, and their businesses' managers and leaders.
Anticipating the future needs and desires of luxury consumers is possible - Plan now for the evolution of a new luxury market brought about by a turnover of a new generation
As of yet, the Millennials have not yet made a significant dent into the luxury market, being still in school, just starting their careers and not yet ascended into the affluent market. Yet these ambitious, highly-educated young people are luxury brands' future customers, and the future leaders of businesses. By 2020 the Millennial generations' tastes, appetites and desires for luxury lifestyles will be strongly felt. For forward-focused marketers it could mean a coming luxury boom? Or a bust for those that ignore the profound changes this generation will bring.
"It's easier for companies to come up with new ideas than to let go of old ones." - Peter Drucker
Understanding the aspirations of Millennials for a luxury lifestyle is critical for luxury brands, including what money, status, and success means to them. They will need to both innovate with new products, services, marketing strategies and branding concepts, as well as let go of old ideas that will prove ineffective, even counterproductive for marketing to this new generation. Unity Marketing has solutions to help you understand the future luxury market.
This study, Wealth Wave: Millennial and their Luxury Aspirations ,includes both an executive summary of key findings and take action strategies (127 summary pages; see Introduction & Methodology pages above for a sample), plus the detail focus group report with quotes and summary of the discussion (103 pages; see Table of Contents above). It gives marketers new insights into the future direction of this generation that will come to the fore in the luxury market starting about 2018 or so.
Unity Marketing has solutions to help you understand the future luxury market and the customers you will encounter there:
- Putting the Luxe Back in Luxury-- My book looks at both the present and future direction for the luxury market and includes the forward-looking data on the demographics of luxury to help you plan for your business' future.
- Wealth Wave: Millennial and their Luxury Aspirations--" This in-depth report, which includes an executive summary of key findings and take action strategies, plus the detail focus group report with quotes and summary of the discussion, gives marketers new insights into the future direction of this generation that will come to the fore in the luxury market starting about 2018 or so. Get ahead of the curve by reading and studying your future customers. This solution will be especially valuable to luxury brands in these key core segments which were discussed in the groups: luxury jewelry; fine dining; luxury hotels and hospitality; luxury fashion, apparel and fashion accessories; luxury wine; and luxury retail including online and internet shopping destinations.
- Create a future strategy for your brand --Need a customized solution that will help you anticipate the future customers for your brand, then call me at 717-336-1600 or email firstname.lastname@example.org to discuss your needs.