Generations of Luxury: What 'Young Affluents' Want and What It Means to Luxury Marketers : Market Research Report

Generations of Luxury: What 'Young Affluents' Want and What It Means to Luxury Marketers

Published: Apr. 1, 2007 - 220 Pages

CHAPTER 1: STUDY OVERVIEW: Research Objectives; Today’s affluent market is dominated by different generations at different life stages 13; A generational shift in the luxury market is coming; Baby Boomers and older consumers represent three-fourths of today’s luxury market15; In 2010 the leading edge of the Boomer generation will start to retire; Key question for the study: What do the 40 and under luxury consumers want and how does it differ from the over 40 crowd?; Luxury Marketers need insight to help them see ‘Over the Horizon’; Baby Boomers will still be an important segment of the luxury market through 2020; Luxury marketers must bridge the generation gap to reach the GenXers and Millennials; Qualitative Research Methodology; Topics Discussed in Focus Groups; Quantitative Research Methodology; Income of the Survey Sample; Younger consumers come from more prosperous family backgrounds; Age distribution of survey sample; Income by age; Gender of survey sample; Marital status of survey sample; Number of people living in the household; Home ownership; Where they live; Ethnic diversity; Educational levels; Generational differences not exclusive to age, but associated with age; Life stage plays a major part in the luxury consumer market, helping explain what luxury consumers buy and how much they spend; Different life stages bring different priorities in spending
CHAPTER 2: ABOUT THE GENERATIONS & THEIR SPENDING ON LUXURY: Younger luxury consumers spend more on luxuries; Equal levels of income but higher levels of spending; The young affluents out-spent the older consumers in all luxury goods categories; Spending on luxury experiences is about equal for both generations; Younger luxury consumers are invested heavily in all aspects of their luxury lifestyle - Older luxury consumers focus more on the experiences; Younger consumers spent more on home luxuries; Younger consumers spent 31 percent more on personal luxuries in 2006; The generations spent about the same on experiential luxuries in 2006; About Luxury Pleasures and Satisfactions; Older luxury consumers obtain greatest luxury pleasure from things they do, while younger consumers gain more pleasure from material things
GENERATIONAL TREND #1: TWO DEFINITIONS OF LUXURY: One word — Luxury — with two totally different meanings; Consumers express their definition of luxury; How luxury consumers define the materialistic side of luxury; How luxury consumers define luxury as an experience; The Luxury of Jewelry vs. The Luxury of Travel; Implications of Trend #1 for Luxury Marketers
GENERATIONAL TREND #2: ACQUISITION VS. DISPOSITION: Older Luxury Consumers Own More of the ‘Good Things” in Life; Implications of Trend #2 for Luxury Marketers
CHAPTER 3: ABOUT THE GENERATIONS & WHY THEY BUY LUXURY: Luxury Consumers Just Want to Have Fun, Regardless of Age; Index where the average is 100 shows how specific motivations rank in the consumers’ value system; Putting Motivational Research Findings to Work; How Luxury Consumers Describe their Motivation for Luxury; All luxury consumers are motivated toward luxury for pleasure and enjoyment; What influences the generations to buy home luxuries; Influencers on home luxury purchases differ by age; Young affluents are more influenced by several key factors that home luxury marketers can control; What influences the generations to buy luxury automobiles; What influences the generations to buy personal luxuries; Which comes first when shopping for personal luxuries — The store or the product brand?; That depends on the target consumers’ age; What influences the generations to buy experiential luxuries; Experiential luxury marketers have to approach the younger luxury consumers differently that the older luxury consumers; Role of exclusivity in the luxury market; Status and the Luxury Generations — Status Defined; Americans tend to reject the notion of ‘Status’ and take an ‘Anti-Status’ point of view; Luxury consumers’ attitudes about status investigated; Personalities of Status; Consensus Connie Goes Along with the Status Quo; Sarah the Status Seeker Places a Priority on Prestige; Quality Magnet Martha Is Driven to Buy the Best; Anti-Status Andy Rejects the Trappings of Status; Lifecycle of Luxury Brands’ Status Tied to Consumers’ Age
GENERATIONAL TREND #3: STATUS VS. ANTI-STATUS: Anti-Status Attitude Is Taking Hold; Implications of Trend #3 for Luxury Marketers; Maintaining luxury consumers’ desire for status through the acquisition of luxury is; good for luxury marketers
CHAPTER 4: THE GENERATIONS AND HOME LUXURIES: In 2006 young affluents purchased luxury electronics, kitchenware and cookware and; tabletop more actively; Why Younger Luxury Consumers Buy More Home Luxuries; Young Affluents Undertake More Home Changes; Primary Influencers on Consumers’ Luxury Home Purchases; Art & Antiques — Purchase Detail by Age; Type of Art & Antiques Bought; Where Art & Antiques Were Purchased; Art & Antiques Brand Purchase; Art & Antiques Purchase Influencers; Electronics — Purchase Detail by Age; Type of Electronics Bought; Where Electronics Were Purchased; Electronics Brand Purchase; Electronics Purchase Influencers; What Makes Electronics Luxurious; Luxury Furniture, Lamps and Floor Coverings — Purchase Detail by Age; Type of Furniture, Lamps and Floor Coverings Bought; Where Furniture, Lamps and Floor Coverings Were Purchased; Furniture, Lamps and Floor Coverings Influencers; What Makes Home Furnishings Luxurious; Garden & Outdoor — Purchase Detail By Age; Type of Garden and Outdoor Luxuries Bought; Where Garden and Outdoor Luxuries Were Purchased; Garden and Outdoor Luxuries Influencers; Luxury Home Decor Fabrics, Wall & Window Coverings — Purchase Detail by Age96; Type of Home Decor Fabrics, Wall and Window Coverings Bought; Where Fabrics, Wall and Window Coverings Purchased; Fabric, Wall and Window Coverings Influencers; Kitchen Appliances, Bath & Building Products — Purchase Detail by Age; Type of Kitchen Appliances, Bath & Building Products Bought; Where Kitchen Appliances, Bath & Building Products Were Purchased; Kitchen Appliance, Bath & Building Products Purchase Influencers; What Makes Kitchen Appliance, Bath & Building Products Luxurious; Kitchenware, Cookware, Bakeware, Cooks’ Tools — Purchase Detail by Age; Type of Kitchenware, Cookware, Bakeware, Cooks’ Tools Bought; Where Kitchenware, Cookware, Bakeware, Cooks’ Tools Were Purchased; Kitchenware, Cookware, Bakeware, Cook’s Tools Purchase Influencers; Linens & Bedding — Purchase Detail by Age; Type of Linens & Bedding Bought; Where Linens & Bedding Were Purchased; Linens & Bedding Purchase Influencers; Tabletop — Purchase Detail by Age; Type of Tabletop Bought; Type of Crystal/Glassware Bought by Age; Type of Dinnerware Purchased; Type of Silverware/Flatware Purchased; Where Tabletop Products Were Purchased; Tabletop Brand Purchase; Tabletop Purchase Influencers; Overview of Home Products Favored by the Young Affluents; Art & Antiques; Electronics; Furniture, Lamps & Floor Coverings; Garden/Outdoor; Home Decor Fabrics, Wall & Window Coverings; Kitchen Appliances, Bath & Building Products; Kitchenware, Cookware, Bakeware, Cooks’ Tools; Linens & Bedding; Tabletop
GENERATIONAL TREND #4 — BUYING FOR HOME VS. ACQUIRING LIFE’S EXTRAS: Implications of Trend #4 for Luxury Marketers; Luxury consumers perceptions of ‘luxury’ changes over time; Spending on Experiences and Spending on Home Luxuries Are Correlated
CHAPTER 5: THE GENERATIONS AND PERSONAL LUXURIES: In 2006 young affluents purchased luxury clothing and fashion accessories more; actively; Primary Influencers on Consumers’ Personal Luxury Purchases; Clothing & Apparel — Purchase Detail by Age; Type of Clothing & Apparel Bought; Where Clothing & Apparel Was Purchased; Clothing & Apparel Brand Purchase; Clothing & Apparel Purchase Influencers; What Makes Clothing & Apparel Luxurious; Type of Fashion Accessories Bought; Where Fashion Accessories Were Purchased; Fashion Accessories Brand Purchase; Fashion Accessories Purchase Influencers; What Makes Fashion Accessories Luxurious; Fragrances and Beauty Products — Purchase Detail by Age; Type of Fragrances and Beauty Products Bought; Where Fragrance, Beauty Products, Cosmetics Were Purchased; Fragrances, Beauty Products, Cosmetics Influencers; What Makes Fragrance, Beauty Products and Cosmetics Luxurious; Jewelry — Purchase Detail By Age; Type of Jewelry Bought; Type of Women’s Jewelry Bought; Type of Men’s Jewelry Bought; Material & Gemstones of Women’s Jewelry; Material & Gemstones of Men’s Jewelry; Where Jewelry Was Purchased; Jewelry Brand Purchase; Jewelry Influencers; What Makes Jewelry Luxurious; Watches — Purchase Detail by Age; Type of Watches Bought; Type of Material of Formal/Dress Watches; Where Watches Were Purchased; Watch Brand Purchase; Watch Influencers; What Make Watches Luxurious; Pet Products — Purchase Detail by Age; Where Pet Products Were Purchased; Wine & Spirits — Purchase Detail by Age; Type of Wine & Spirits Bought; Pens & Writing Instruments — Purchase Detail by Age; Where Pens & Writing Instruments Were Purchased; Automobile — Purchase Detail by Age; Luxury Automobile Brand Purchase; Luxury Automobile Purchase Influencers; Overview of Personal Luxury Products and Brands Favored by the Young Affluents; Clothing & Apparel Products & Brands; Fashion Accessories; Fragrances & Beauty Products; Jewelry; Watches; Wines & Spirits; Automobile Brands
GENERATIONAL TREND #5: WE-THINK VS. ME-THINK: Implications of Trend #5 for luxury marketers
GENERATIONAL TREND #6: BRAND LOYALTY VS. RETAILER LOYALTY: The Question of Brands; The Store as It Relates to Brands; More About the Luxury Shopping Experience; Implications of Trend #6 for Luxury Marketers
CHAPTER 6: THE GENERATIONS AND EXPERIENTIAL LUXURIES: In 2006 young affluents purchased entertainment, spa and beauty services and travel at a higher rate than the more mature luxury consumers; Figure 106: Spending on Experiential Luxuries by age, 2005 & 2006; Primary Influencers on Consumers’ Personal Luxury Purchases; Dining — Purchase Detail by Age; Fine Dining Purchase Influencers; More about Luxury Fine Dining; Entertainment — Purchase Detail by Age; Entertainment Purchase Influencers; Home Services — Purchase Detail by Age; Home Services Purchase Influencers; Spa and Beauty Services — Purchase Detail by Age; Spa and Beauty Purchase Influencers; Travel — Purchase Detail by Age; Type of Luxury Travel Bought; Travel Purchase Influencers; What Makes Travel Luxurious
GENERATIONAL TREND #7 — TIME IS ULTIMATE LUXURY VS. LIFE-CHANGING EXPERIENCES: Implications of Trend #7; The Internet Saves Time for Busy Luxury Consumers; Internet Widely Used to Research and Purchase; Entertainment and Recreation Lead Internet Purchases; Young Affluents Take to Lead the Internet Spending Pack; Time Spent Online; Convenience and Comparison Shopping Are Key to the Appeal of Internet Shopping; Shopping by age; Shipping and Handling Charges Discourage Luxury Internet Shoppers; Luxury Consumers’ Attitudes about Internet Shopping; Young Affluents Have a More Technically-Enhanced Lifestyle
CHAPTER 7: GENERATIONS AND OTHER LIFESTYLE FACTORS: Majority of Luxury Consumers Trade Down - Not Up - to Luxury; Differences found between the age groups in the specific luxuries they are more likely to; indulge in; Young affluents are more bargain conscious when buying experiences; Young affluents collect points and redeem rewards
GENERATIONAL TREND #8 — FRUGAL VS. INDULGENT: Young Affluents Are Passionate About Getting More for Less; Implications for Trend #8 for Luxury Marketers
GENERATIONAL TREND #9 — NEW CASUAL VS. BUSINESS CASUAL: Implication of Trend #9 for Luxury Marketers
CHAPTER 8: THE “WANT-IT-ALL” GENERATIONS AND IMPLICATIONS FOR LUXURY MARKETERS: Today’s Young Affluents Are the ‘Want-It-All’ Generation; Key Trends that Distinguish the Young Affluents from Older Luxury Consumers; Generational Trend #1 — Two Definitions of Luxury: Material vs. Experiential; Implications of Trend #1 for Luxury Marketers; Generational Trend #2 — Acquisition vs. Disposition; Implications of Trend #2 for Luxury Marketers; Generational Trend #3 — Status vs. Anti-Status; Implications of Trend #3 for Luxury Marketers; Generational Trend #4 — Buying for Home vs. Acquiring Life's Extras; Implications of Trend #4 for Luxury Marketers; Generational Trend #5 — Generational Trend #5: We-Think vs. Me-Think; Implications of Trend #5 for luxury marketers; Generational Trend #6: Brand Loyalty vs. Retailer Loyalty; Implications of Trend #6 for Luxury Marketers; Generational Trend #7 — Time Is Ultimate Luxury vs. Life-Changing Experiences 225; Implications of Trend #7; Generational Trend #8 — Frugal vs. Indulgent; Implications for Trend #8 for Luxury Marketers; Generational Trend #9 — New Casual vs. Business Casual; Implication of Trend #9 for Luxury Marketers

Abstract

Meet the Young Affluents. The fresh, unexpected needs and desires of this "Want-It-All" Generation will be the most important trend to impact the global luxury market over the next decade and beyond. And savvy marketers need to be poised to meet the demands of this unique new force in the luxury marketplace.

Young affluents -- roughly corresponding to the Generation X and Millennial generations -- will play an increasingly important role in the target market for global luxury marketers over the next ten to twenty years. This is true not just in the United States (with a median age of 36.5 years) or in the European countries (where the median age ranges around 40 years old), but in the developing luxury markets, like Brazil (median age 28.2 years), India (24.9 years) and China (32.7 years), where the population as a whole is more youthful. This report presents information that is vital to the future success of luxury marketers worldwide.

This report will help luxury marketers and retailers 'think young' in order to understand the young affluents and to position their brands for the future in the developed and the developing markets. To prepare for the future, luxury marketers must understand the unique desires of the young affluents, how they express luxury in their lifestyles today and how they will do so in the future. Understanding the young luxury consumers is critical for marketers to target their marketing communications, advertising and product development efforts effectively now and for years to come.

This report presents the nine key trends that distinguish the young affluents from the more mature luxury consumers, based upon the latest research combining both qualitative and quantitative methodologies conducted by Unity Marketing. These nine trends form the basis for a strategy to help luxury marketers understand and reach out to the young affluents who will be their primary consumers for the next decade and for years to come.

What Do the Young Affluents Want and How Does It Differ from the Over 40 Crowd?

The global luxury market is going young so luxury marketers must learn to think young in order to survive and thrive. Global luxury marketers have gotten used to the passions and nuances of the maturing Baby Boomers after so many years of targeting this generation with their luxury goods and services. Now they have a new challenge to appeal to the young affluents who have different ideas about luxury and different priorities in how they spend their wealth.

Looking to the future, the global luxury market will be less culturally bound. Given the rise of the internet and other global media embraced by young people, trends in the luxury market will cross borders at alarming rates. The future of the international luxury market will be a 'global village' made up of young affluent citizens of the world.

To prepare for the future, luxury marketers must understand the unique desires of the under 40 year olds, how they express luxury in their lifestyles today and into the future. Understanding the young luxury consumers is critical for marketers to target their marketing communications, advertising and product development efforts effectively now and into the future.

This study reveals:

Nine key trends that distinguish the young affluents from the older generation -- and the implications for luxury marketers for each of these nine trends in terms of branding, marketing and retailing
What luxury categories are most appealing to the young affluents -- In which luxury categories the young affluents represent the core target market
Where the young affluents shop for their favored luxuries and what marketers need to do to capture those customers when they are shopping
How marketers can influence young affluents in their luxury purchases
Why young affluents spend more and how luxury marketers can capture a bigger share of their wallets

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Generations of Luxury: What 'Young Affluents' Want and What It Means to Luxury Marketers

Table of Contents

Abstract