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Next Luxury Consumer Target Market

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Who are the next Luxury Market consumers?

Who are the next Luxury Market consumers?

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  • 1. Millennials: The Next Luxury Consumerby VICKI M. YOUNGPosted WEDNESDAY JULY 6, 2011From WWD ISSUE 07/06/2011Millennials with incomes over $100,000 will define the next wave of luxury spenders.That is among the findings of two studies presented by George Scribner, senior vice president,people planning, at advertising firm Digitas, during a program on “Affluence in America -— TheNew Consumerism Landscape,” held by the Luxury Marketing Council this month in New York.The findings were based on data from the Mendelsohn Affluent Survey and the MendelsohnAffluent Barometer.Given their age and income levels, the Digitas study indicated, these emerging millennials —those between 18 and 35 who already have annual household income between $100,000 and$199,000 — have the greatest chance of hitting the $200,000 mark. While this group is buyingArmani, Cartier, Gucci and Mercedes, also ranking high on their brand preference list are Diesel,Sephora and Marc Jacobs — plus Google.In the U.S., affluence requires a minimum of $200,000 in annual household income, according toDigitas.Scribner told the marketing professionals attending the presentation that while millennialsconstitute only about 12 percent of the consumer base, this is the group to go after, as they willlikely achieve significant wealth over the next decade.Those 35 and up with incomes under $200,000, dubbed “aspiring consumers,” make up 70percent of the population, who work primarily in service-related occupations. Many areoverleveraged.“They’re back to being middle class [and the] younger [Baby] Boomers are squeezed by therecession, with many now thinking about their retirement,” said Scribner.These Boomers prefer brands such as Seiko and Lee Jeans, while younger Generation Xconsumers favor Gap, Diesel, Cover Girl and Nicole Miller.The remaining three groups covered, making up the remaining 18 percent of the population, arethe affluent, defined as having incomes of $200,000 to under $500,000; the wealthy, at $500,000to under $1 million, and the rich, with $1 million-plus. The affluent, those largely employed insoftware design, advertising and public relations, are buying Missoni, Elie Tahari, Burberry andMarc Jacobs. The wealthy, core C-level executives and business owners, said favorite brandsinclude Chopard, Ermenegildo Zegna, Hermès, Armani and Thomas Pink. The rich prefer Hermèsand Bergdorf Goodman.The latter two groups also have a preference still for the daily newspaper, even though they, too,have become active participants in the digital mobile age.