There is a lot of discussion in the media and online about the millennial generation, how they interact with luxury brands and the effects of consumer changes within the generation. We have touched on the age of the internet and quality over quantity in past blog posts which are important factors for consumers within this demographic. The changes in buying habits come largely from being the first generation growing up in this technological world, where the internet and devices are simply logical. The confidence in technology and the possibilities it holds has altered the expectations millennials have in every day life.
By the year 2035, millennials will be the largest spending generation in history, making them particularly enticing to any person or business marketing a product. Particularly as millennials grow into more financial security (older millennials), they have more disposable income for life’s luxuries. International luxury brands that work with powerful millennial influencers and have forward thinking and authentic campaigns will be the ones that will reach these millennials. For a millennial, there’s nothing worse than a company trying too hard for their attention – it has to be natural, authentic and ingrained in the ethos of the brand. With the powerful tools of social media and the internet, it is very difficult to pull the wool over the consumers eyes therefore companies that are transparent with their supply chain and working standards are gaining the trust of these young consumers.
Popular fashion blog Man Repeller says of this group; “The internet is obsessed with millennials because millennials are basically the internet.” This stereotype unpacks the idea of influence and power that millennials have within society. Their wants and needs are starting to be recognised by the world’s major fashion houses, creating a snowball effect that gives the group even more power. Millennials, despite being a huge group in society, are individualistic, and generalised assumptions about them instantly deters their interest.
What is a millennial?
Typically, millennials are described as people that are born from about 1980 – 2000 although not all millennials are created the same. With a quick online search, there are more factors that qualify a millennial: they are the last generation of the 20th Century and are also interested in travel, technologically savvy, vocal, active, educated and have strong values that influence their spending habits. They have larger debts than their parents generation, which flows into their lifestyle choices by buying houses, marrying and having children later in life when they are more financially secure. In America alone, millennials make up 25% of the population and spend approximately US$170 billion per year, creating a swarm of marketing campaigns designed to entice them. Not only do millennials have large buying power that consumer industries want to target, they also influence older and younger generations in the ways they consume.
The millennial buyer follows a different set of rules when spending their money than the generations before them. They use the tools of their generation, especially the internet, to research products before committing to major purchases. Millennials are influenced by peer reviews, online forums and the integrity of a product and the company before committing to a purchase. They want products that support a cause, choosing brands that align with their moral and ethical beliefs. Additionally, millennials are vocal, sharing with their peers and essentially the world their opinions of product performance, customer service and overall assessment of the brand or product, made easy by social media and online forums.
Post-millennials or Gen Z, are now coming to be a consumer force all of their own. This group grew up with the internet – for them there isn’t a time in their lives when the internet didn’t exist. They are incredibly savvy and ready to hustle for luxuries, on selling, building social media audiences to the size where luxury brands are making money off their endorsements, in some cases even collaborating with these young influencers for marketing campaigns.
What is luxury to a millennial?
The differences in millennial perceptions and expectations of luxury is changing the luxury industry culture. Luxury is now more than physical items like designer handbags and watches, it also includes experiences, cuisine and travel, which in turn shifts the way brands present their product to the demographic. Length of life and practicality are considerations of millennials when buying into a brand, as is integrity of brand values. Innovation and modernity, effects on the environment and people making the product are also considered factors.
Growing up with environmental and social issues such as climate change, exploitation of workers in developing countries and pollution from textile waste have all contributed to the way millennials consume goods. ‘Sustainability’ and ‘ethical’ are words influencing both consumer and brand, as a trend towards concious purchases continues to emerge. Organic fabrics, fair-trade certifications, responsible supply chains and locally produced goods are more than the product, as is a luxury good. It is also about experience, perceptions and aligning with the emotional need to be a decent human. Some luxury companies are awake to the wants and needs of this group, catering to this demographic and creating a brand culture that aligns with millennial values.
Technology and consumption now go hand and hand with consumers in 2017. Millennials need the brands they follow to have mobile friendly, effective, streamlined websites to be worth their time. Millennials care about the values of brand and use technology and online reviews to understand how they treat staff, where they source products from and user experience. Not only do Millennials expect luxury brands to have a good use of technology to make them accessible, they also value a sense of collaboration, or a recognition of the consumers ideas and opinions.
So what can luxury brands to learn from millennials?
- Millennials do have money to spend, however they are selective about the brands and trends they wish to spend it on. Customer experience and brand integrity are important factors to entice millennial spending.
- Online presence and innovative use of technology is integral to a brand, as are online forums and reviews of said brand.
- Products need to be of high quality and responsibly made as well as beautifully designed and packaged.
- Millennials have moral and ethical values that they expect to be catered to by luxury brands. Luxury brands need these values ingrained into the culture of their corporation to have the integrity that millennials expect.
A digital marketing to millennials 101 from the perspective of a millennial. The writer – Dakota Shane, implores non millenial marketers to be themselves, research well and understand their own brand enough to know if marketing to millennials is the way to go. If all else fails – hire a millennial for the job!