With over 35 years of experience in the home industry, our team at Ramey has witnessed the evolution of the luxury market firsthand. Historically, the purchasing power for luxury goods has been dominated by Generation X and Baby Boomers. However, the landscape is shifting, and brands must prepare for the rising influence of a new generation of buyers.
Younger Generations will account for 80% of the global luxury market by 2030.
By 2030, working Millennials (ages 28-43) are expected to account for 50-55% of the global luxury market, with Generation Z capturing an additional 30%. That means that younger generations will represent 80% of the market in just six years. These emerging consumers may not make as much as the generations before them, but they are more likely to spend money on luxury products.
Millennials care more about products that promote their status and self-expression.
This new generation is more inclined to buy luxury goods, especially if it will further their positive appearance in the world. They care about their status and want to ensure the brands they buy positively represent them. Their interest categories include: Fashion Apparel, Jewelry/Watches, Beauty, Health and Tech. It has become evident that this generation is more motivated by material goods than trips or experiences.
88% of Millennials use social media in decision making.
Millennials grew up with social media, posting about how they look, what they wear, where they go on vacation, and how they feel. The influence of social media drives a lot of their behavior, and brands need to capitalize on reaching this audience through their preferred channels (i.e. Instagram, Facebook, TikTok, etc.).
We do not need to forget Generation X and Baby Boomers.
It’s crucial to continue catering to Gen X and Baby Boomers, as their traditional affluence will continue to drive luxury sales in the current market, even amid economic uncertainties. However, for long-term success, brands must start focusing on the evolving needs and desires of the younger generation.
All generations hold luxury to the highest standard.
Both groups, however, share a common expectation: luxury must maintain the highest standards. 73% of consumers believe that luxury experiences should be exceptional. To meet these expectations, brands need to emphasize quality craftsmanship, durability, and the potential for creating memorable experiences, alongside personalized service.
Looking forward, luxury brands must balance the needs of both traditional affluent consumers and emerging buyers. This will require a strategic approach to marketing and thoughtful product placement. By balancing their interests, luxury brands can continue to thrive in a competitive and evolving market.
Resources:
Mintel: The Impact of Millennial Buying Trends on the Consumer Landscape
Mintel: Luxury Consumer – US – 2024
Unity Marketing: Conspicuous Consumption Is Back: Navigating Millennial Status Motivation For Luxury Brands
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