Millennials & Generation Z are now more inclined than previous generations to value luxury
27 January 2022, Mumbai:
We already knew that Generations Y and Z have become great targets for big luxury brands, but a recent survey shows that, even more than previous generations, these generations' customers had made a significant shift toward luxury purchases in the last year.
And these younger customers carry with them new expectations, particularly in terms of modern technology and sustainability. Who said that Boomers were the only ones who could afford luxury? This is no longer the case; on the contrary, younger generations are increasingly gravitating toward high-end and even ultra-high-end things.
One of the conclusions of the current research from payment services business Klarna* is as follows: In the last 12 months, Gen Zers (63 percent) and millennials (63 percent) bought more luxury things than their elders (45 percent for Gen Xers and 25 percent for Baby Boomers).
With the epidemic, luxury firms have realised the significance of hastening their digital transformation. Something that has grown increasingly important as their client base has shifted to younger generations.
The research, titled "The State of Smooth: Unpacking Luxury in 2022," claims that eight out of ten luxury buyers consider a brand's dedication to innovation and new technologies to be a crucial purchasing factor, and that more than a third prefer to make luxury purchases online via mobile applications.
From social media to the internet of things, there's a lot to take in. "A new generation of younger, technologically aware luxury buyers is developing, with changing preferences for how they purchase and pay," said David Sykes, Klarna's Head of North America.
"While the attractiveness of brand names (52%) and exclusivity (39%) continue to drive luxury purchases, today's high-end buyers want more flexibility and innovation across their shopping experiences.
Faced with these ever-younger customers, luxury firms must also pay attention to their social media presence. Almost two-thirds of Millennials and almost eight out of 10 Gen Z customers (83%) say they follow premium brands on social media.
Almost as many, 75 percent and 63 percent, claim they've bought anything after seeing it on a social media platform, with YouTube and TikTok leading the way. The rush of major fashion firms into the metaverse is unlikely to change this trend.
More than six out of ten respondents who have heard of the metaverse indicate they want to buy luxury products through this new channel. In general, customers are becoming more interested in new technology, such as virtual fitting rooms that allow them to try on clothes without having to leave their sofa (22 percent ).
Is luxury a sign of long-term viability? Can luxury not readily accept sustainability when it comes to quality, artisanal skills, and local circuits?
This appears to be the mindset of today's buyers of so-called high-end goods.
Almost six out of ten respondents (59%) believe that their luxury purchases are more sustainable, and more than four out of ten believe that the quality of the items even delivers long-term savings, with Gen Z in particular having a "buy-less, buy-better approach."
In October 2021, Klarna conducted a luxury study in partnership with research agency Dynata among a representative sample of nearly 4,000 customers aged 18 to 65 in five countries, including 1,060 respondents in France.