The luxury marketplace, where the high-end goods reside and the affluent in society are frequent visitors, has been beginning to feel a bit of a shift over the course of 2014, and may continue to follow this trend of change for some time. As the old adage goes, the rich get richer. What does this mean for the older generations of the affluent, the Baby Boomers?
They hold some of the largest bank accounts in the country; and not only that, but they also make up the plurality of the wealthy totaling in at nearly 40%. However, despite their majority stake and massive net worth (the average net worth of the affluent being $1,006,000), studies from Unity Marketing suggest that they may not actually be the drivers of this luxury market anymore.
As these affluent Baby Boomers have become used to living lavish lives, and have spent the majority of their days purchasing luxury brand items, it seems they have reached the tipping point where their desire for luxury goods does not outweigh the costs needed to secure them. By this point, the desire to have goods that show off their status in society has worn off.
They’ve been there, they got the t-shirt, those who know them are aware of their wealth, and those who do not know them… well, they really do not care what they think by this stage in their life. They have everything they could ever need and more, and have begun to focus on other things.
This leads us to the question of who will continue to drive the luxury market. A study from Unity Marketing suggests that the young affluent, ages 24-44 with incomes over $100,000, will be the key to this market’s success. Findings show that the young affluent are now spending ~50% more on luxurious items than those in the age bracket of 45 and older.
They are newly successful and more inclined than the older affluent to seek out status symbols to publicly display their wealth; however, although this is true, the study from Unity Marketing claims that what they really want are “brands that reward them with pride of ownership and send a smart shopper message.” Brands such as Michael Kors, Uniqlo, Black Box Wines, Top Shop, and Havaianas have “successfully captured the generous spending of young affluents by playing to their unique sensibility.”
Marketers of luxury brands should consider following a similar strategic plan in order to set themselves up for continued/future growth. The young people of today continue to shape our society. Following their desires’ lead will help pave the way for success.