THE DEMOGRAPHICS OF LUXURY Millennials and Gen Z

THE DEMOGRAPHICS OF LUXURY Millennials and Gen Z Changing the Course of Luxury and Beyond

Luxury demographic cohort targets Demographic not geographic • Luxury brands are reconsidering the ways they market themselves Who do luxury brands target? • • • Affluents earning $125 K HENRYs (more to follow) Yummies (more to follow) Millennials Gen Z Consumers with $500 K in annual discretionary income

Luxury demographic cohort targets HENRYS High Earners Not Rich Yet • Income between $100, 000 & $249, 999 • 22. 5 million households Affluent • • Top 20% of US households based on income ($100, 000) 25 million households Account for 40% of total consumer spending Spending power is twice that of the middle class Growth demographic (Danziger, 2014)

Luxury demographic cohort targets HENRYS Heavy hitters in big national retailers, box stores & chains Cheap chic – combining high-end with low-end Don’t purchase luxury often Retailers should work to attract this group (Danziger, 2014)

Luxury demographic cohort targets HENRYS Two strategies • • Mass-market Focus on value – return on spending investment Luxury-market Deliver high quality goods & services while making consumers feel pride of ownership & belonging

Luxury demographic cohort targets Yummies • • • Young, urban males Twenty-something men with smartphones Metro-sexuals Something to prove Brands taking note of menswear • Michael Kors • Coach • Prada

The ‘millennialization’ of luxury 85% consumer growth in luxury in 2017 “Millennial state of mind” • Changing purchasing habits for multiple generations (Bain & Co. 2017) • Expectations are radically different than previous generations (Danzinger, 2019) • Pushing brands to examine content and how content is delivered (Bain & Co. , 2017) • Millennials will contribute to the massive growth in luxury of the next seven years (Danziger, 2019) • Currently, Millennials, represent 32% of spending in the personal luxury market, by 2025, they will be 50% of the total market (Danzinger, 2019) • Millennials will radically transform the luxury market by 2025 (Danzinger 2019)

The ‘millennialization’ of luxury

Gen Z and luxury Younger Gen-Z’s will influence the depth & velocity of changes in the luxury marketplace Misunderstood by many luxury brands Currently, Gen Z is about 4% of the luxury market, by 2020 they will grow to 8% Powerful influence in the marketplace with different values & ideals than Millennials

For further examination 1. How are Millennials influencing other generational cohorts? 2. What is the Millennial attitude about luxury? 3. How have Millennials changed the luxury business? 4. How will Gen Z influence other generational cohorts? 5. What is the Gen Z attitude about luxury? 6. How are Millennials and Gen Z different?