Predicting the future of luxury has never been more nuanced than it is right now. Fortunately for luxury marketers, positive attitudes towards luxury act as powerful levers of purchasing behaviors. According to our Affluent Perspective Global Study, a majority of the world’s most successful people are happy with their lives, and luxury often plays a role in that sentiment.
The luxury market today remains driven by affluent Gen X (39-52) and Boomer (53-71) consumers by sheer population size but the future of luxury is in the hands of affluent millennials (18-38).Enthusiasm for luxury around the globe remains strong and stable in part due to the spending habits of affluent millennials.
This growing (and aging) segment is leading the pack with regard to enthusiasm for luxury — combining a positive attitude towards luxury with a strong desire to purchase, and for the moment, at a pace that shows no signs of slowing down. More than half (56%) of affluent millennials around the globe agree that they expect to spend more on luxury in the next year. Looking ahead, 67% of affluent millennials say they have a desire to buy more luxury in the future than they do now.
Why are so many affluent millennials over-the-moon about luxury? In the U.S., more than half (55%) of all affluent millennials grew up affluent, meaning many are predisposed to have an appreciation for luxury products and experiences — far more than other generations. Growing up with affluence means these millennials are maturing into adulthood with an experience and taste for luxury that their parents very likely did not have.
Nearly three-quarters (72%) of millennials agree that “once you experience true luxury, it is hard to scale back.” Many millennials have experienced the best that luxury brands have to offer, and they don’t want to relinquish this anytime soon. At the same time, this desire to buy more luxury may stem from a need to maintain their current social status. Fifty-five percent agree that their friends say they live a luxurious lifestyle. The only way to secure their desired lifestyle is to continue to have access to, or generate disposable income.
As a generation, millennials are portrayed as lacking focus and a work ethic that falls short of the “nose-to-the-grind-stone” mentality of Gen X and Boomer segments. Millennials purportedly do not work hard because they don’t aspire to more beyond living comfortably from the wallets of their parents well beyond their college years. But among affluent millennials, this narrative is proven false by their attitudes towards career, luxury, achievement, and success — which are all intertwined.
Three-quarters (74%) of millennials say that luxury brands communicate things about people that other brands don’t, the highest response of any generation. And they have a lot to communicate: status, success, and hard work. Luxury creates a beacon, communicating the results of the hard work and investment made by affluent millennials (not to mention their parents).
Having a successful career — amidst an employment climate that is rocky and unpredictable for people of all ages and economic levels — is especially important to affluent millennials. When asked if success in their career defines who they are, a resounding 72% of global millennials agreed, far outpacing other generations.
Sixty-three percent of global affluent millennials say that their parents put a lot of pressure on them to succeed — nearly twice as much as Boomers and Matures.
Affluent American millennials are not alone in recognizing there is immense pressure on them. Their parents also agree they set the bar high — 81% of parents of millennials agree they have created high expectations for their children. Their children agree wholeheartedly — 91% of affluent millennials say their parents have high expectations.
The strong work ethic instilled by their parents, combined with an excellent education and influential personal networks, is paying off. They are successful and use luxury to speak for their success and hard work. If this study has shown anything, it’s that brands and marketers should pay attention to what millennials embrace as their future.
True luxury brands, those with limited distribution and high prices, should be cautious about relying on business from most American millennials. The upper age bracket of millennials in the U.S. has less income and savings now than did boomers at the same age, and their career prospects don't look as good either. Some research shows they are skeptical about buying true luxury products even if they could afford them.
Hi Paula: The affluent millennials we survey earn on average $260K. They are prudent and respectful when it comes to their finances – they are saving 32% of their income and 73% indicate they pay off their credit card balances each month. Many (46%) have a strong desire to leave a financial legacy for their heirs – seeking professional advice is an important part of achieving that goal. The average affluent millennial engages the services of two advisors. (Caring for aging parents is not currently content we have in the study.)
Cara, just out of curiosity, what percent of all millenials qualify as "affluent" based on their own earnings, not their parents? There are a lot of media/marketing people who seem to think that a high proportion of millennials are "upscale" or something akin to being "affluent", however, the BLS and other stats for this population group as a whole, say quite the opposite?
Excellent question from Ed. I beleive it is a very small percentage, especially at the level of $260K average income, which was apparently the case for the survey sample.
Ed – Thanks for reaching out – I was preparing for a webinar yesterday – hence my delayed response. We define the millennial generation as those who are 18-38 years old and we consider a household to be affluent if their total combined annual income is $150,000 or greater. Each year our study includes a sample from the General Population, which reveals that just 7% of all millennials (18-38) are in affluent $150k+ households. When we look at affluent millennial households specifically, 89% are “head of household”, yet when we split by 18-24, just 18% are heads of household compared to 96% for the older group. There’s a lot more to it – those 7% are an interesting group. I’d be happy to discuss offline.