We asked Millennials what luxury products they’re actually buying. Find out where they’re allocating their spending power…
Yesterday, we told you about the luxury brands Millennials most want to own. And while their answers give us insight into their aspirational purchases—and into what brands are staying relevant—what they’re actually buying today tells a bit of a different story.
Traditional luxury stores and brands are striking out with young consumers. In 2016, the global luxury market shrunk for the first time since 2009, according to CNBC, and Forbes predicts that 2017 is not expected to fare much better. A recent brand equity poll shows Nordstrom is losing favor with Millennials as they skip luxury department stores for off-price options, and MediaPost reported that while the full-price store’s sales showed a 2.8% drop from 2016, discount chain Nordstrom Rack’s sales spiked 2.4%. In other words, Millennials like their premium products, but not at a premium price: a recent Ypulse monthly survey found that 60% of 18-35-year-olds say they’d prefer to buy products that are a “good value for the money” and 33% would prefer things that are “premium but affordable,” versus 5% who prefer to buy “top quality.”
This gets at the heart of the issue for Millennials: it’s all about their bottom line, and their values. According to Forbes, the biggest problem with the luxury market is that today’s consumers “look at what the luxury brands offer and see that they are heavy on marketing, but light on authentic values that really mean something to them personally and in their current lifestyle. While this is giving whole new industries the chance to be considered luxury, it’s also creating an atmosphere where luxury is in the eye of the beholder. All of which begs the question: what kinds of luxury products are they actually spending their money on? According to Ypulse’s research, 41% of 18-35-year-olds have purchased a luxury product, and we asked these 18-35-year-old luxury buyers to tell us the last luxury product they owned or purchased.* Here are the top ten results:
*These were open-end response questions to allow us to capture the full range of luxury products 18-35-year-olds are actually buying. As with any qualitative question, the responses include those that are top of mind and those that are most wanted. The lists are ordered according to number of responses received, and alphabetically when ties occurred.
What Luxury Products Are Millennials Are Actually Buying?
- Bag / Wallet
- Jewelry / Watches
- Makeup / Beauty
- Laptop / Computer
- Furniture / Home Décor
- Shoes / Sneakers / Boots
- Food / Restaurant
Of the top five products on this list, three fall into the fashion and accessories category, long associated with conspicuous consumption. Does that mean Millennials really do care about luxury brands? Well, sort of. While our list of Millennials’ most-desired luxury brands hits some of the mainstays (BMW, Louis Vuitton, and Gucci all made the top five), it’s important to remember that those are aspirational purchases, not what they’re actually buying. On top of that, one third of the respondents were not able to name a luxury brand they wanted to own, hinting at something else happening on this list: with the Millennial definition of luxury far different than previous generations, the brands that fall into the categories they’re actually buying are far broader than the heritage brands we typically associate with the title “luxury.” Organic cotton t-shirts, sustainably made wallets, and all-natural beauty products from boutique brands could fit the bill as much as a Coach handbag or Rolex watch. Indeed, respondents listed everything from “a super good burrito” to “a pair of jeans that cost me $1000” as their recent luxury purchases, and while some named heritage brands, others stuck with simple descriptors like “shirt” or “coat,” leaving the definition of luxury open to interpretation. When asked why they have owned or purchased a luxury item, only 4% of respondents answered that “it represented a status or image I wanted to portray,” while 34% said “it was high quality,” and 30% said “to treat myself.”
And true to Millennial form, the top ten list for recent luxury purchases wrapped up with “food / restaurant,” showing that experiences are truly turning into luxuries in their minds. According a recent Ypulse monthly survey, 50% of Millennials consider themselves foodies, and with terms like “organic” and “local” becoming synonymous with “luxury,” high-end food purchases only stand to become more important to Millennials.
It’s also interesting to note that “car” came in number six for 18-35-year-olds, showing a growing trend of Millennial car ownership at a time when the headlines might lead you to believe that Millennials are killing the car industry. In fact, cars made the top 5 list for Millennial males:
Among Millennial males, cars tied with laptop/computer to come in at the number five kind of luxury product they’ve purchased recently—among females it was a close sixth place. Males were also more likely than females to name furniture/home décor as a luxury product they’ve purchased, while females were more likely to name bag/wallet and makeup/beauty than males.
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