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Marketing to the Growing Millennial Luxury Market [Issue 4; May, 2008]

There are 100 million "millennials", children born 1979 – 2000, currently age 8 – 29. Adult millennials are responsible for $629B in consumer spending and comprise 41% of the U.S. population. And, because they have grown up in the age of dotcom billionaires, wealth and success are a given. Like their boomer parents, millennials are said to be "poised to become the next great luxury consumers." Following is a summary of recently published information on this special group. [Time Style & Design, Spring 2008]

DO MILLENNIALS VALUE BRAND NAMES?
Millennials are much more psychologically engaged in luxury than their parents' generation. Compared to baby boomers, they have a more positive attitude toward high-end services and products and are also more interested in ownership.

• On average, millennials are less aware of most luxury brands, however they are highly aware of brands that target them specifically, such as Diesel, Marc Jacobs, Juicy Couture and True Religion.
• Millennials are less likely than boomers to own most luxury brands, but their interest in owning specific luxury brands is on par with or higher than that of boomers.

 

Despite millennials having lower incomes, In the past six months:

• 65% bought an average of six pairs of luxury brand shoes
• 59% bought an average of two pairs of luxury brand sunglasses
• 52% bought an average of seven luxury brand purses or bags

WHERE DO MILLENNIALS SHOP FOR FASHION & ACCESSORIES?
Millennials acquire their fashion and accessories at high-end department stores like their moms (50%) and on the Internet (52%). Outlet stores are also a source for these items (31%) among millennials.

WHAT DO MILLENNIALS SPEND ON HAIR & BEAUTY?
On average, millennials spend about twice as much as boomers on hair and beauty. The maximum ever spent on:

• Hair Care: millennials $213, boomers $71
• Skin Care: millennials $226, boomers $124
• Fragrance: millennials $226, boomers $178

WHAT ARE MILLENNIALS' TOP SOURCES OF INFORMATION ON LUXURY?
Magazines (61%) and catalogs (53%) are the most popular sources of information about luxury; however millennials also rely on word-of-mouth, including friends (50%), family (37%) and online social networks (26%).

WHAT CAN YOU DO?
Target millennials specifically to persuade them to purchase at your sales venues through event marketing and other communication vehicles with shopping tie-ins at Saks Fifth Avenue, Neiman Marcus and Nordstrom. Mother-daughter promotions would also resonate with millennials, since research has also shown that they love to shop with their mothers. (The number of 18-24 year-olds shopping with mom has grown 8% since 2005 according to NPD Group.)

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