How Millennials are Shaping Luxury?

Representing a big proportion of the population with a growing purchasing power, Millennials and Gen Z have become crucial players in the luxury industry, so much so that all brands need to consider this new customer base. These young consumers have very different needs, expectations, and consumption habits than their parents and grandparents. This is not only due to them being born or growing up in an era governed largely by digital, social networks and image, but also because the level of demand of this generation is very high, having today the possibility to compare, analyse, be inspired and criticise.

Who are these Millennials and Zoomers? How does their buying behaviour impact on luxury brands? First, we must make a difference between Millennials and Gen Z, both often confused. Millennials, or Generation Y, were born between 1981 and 1996 and represent young people aged 26 to 41. Zoomers, or Generation Z, on the other hand, were born after 1996.

Gen Z is the first generation to grow up on digital platforms. They get their fashion, travel and luxury inspirations from their favorite influencers or micro-influencers on Instagram, TikTok and Youtube. These inspirations are also found in the varieties of places they discover, physically or digitally. And they influence Millennials, whose concerns about climate change and sustainability have deepened. These young consumers are increasingly turning to the high-end and very high-end, bringing new expectations to luxury brands, especially in terms of new technologies and sustainability.

According to payment services company Klarna, Members of Generation Z and Millennials purchased more luxury items than their older, Generation X in the past 12 months.

A Shift to Digital

Luxury brands have already recognised the importance of investing in digital and communicating through this channel. Even if there is a real pleasure in entering a luxury store and having an extraordinary shopping experience, luxury is nowadays largely bought on the internet. With the pandemic and the numerous online purchases, luxury brands have had to accelerate their transition to digital.
With an ever-younger clientele, luxury brands must not neglect their presence on social networks either. 83% of Generation Z consumers and nearly two-thirds of Millennials say they follow luxury brands on social networks. And almost as many say they have bought something after discovering a product on a social network, led by TikTok.

Always More Novelty and Creativity
The new demands of Millennials and Gen Z are pushing luxury brands to look even further for new concepts, new ideas and new interpretations of luxury. This is where collaborations and co-branding take a big part in the new trends, striving for design innovation as well as unique collections that purchasers will snap up.

These collaborations, often presented in limited editions, create such a high demand from consumers that a kind of hysteria is created around these different pieces. Handbags, sneakers and luxury watches have become iconic objects that sometimes result in waiting lists of several years to finally become the happy owner. For examples, the famous Louis Vuitton and Supreme sneakers or the iconic Birkin by Hermès come to mind. “There used to be a waiting list, but now you have to be rich or important,” notes Business Insider regarding the Birkin.

When Millennials and Gen Z go luxury shopping, they’re not looking to buy an It Bag with a logo found at the local mall. They want something unique, sought-after, with clearly stated values. A promise that luxury brands must be able to deliver.

Sustainability, the Best Luxury Asset

Generation Z is also the one with strong opinions on sustainability and ‘repair and rewear’. Luxury brands must therefore naturally orient themselves towards this new trend displayed by young consumers. As an example, Alexander McQueen has partnered with the platform Vestiaire Collective to take back the old products of its customers and authenticate them for resale. For Farfetch, sales of their ‘conscious’ brands have grown 3.4 times faster than the rest of its market. A considerable number of its customers are indeed looking for animal-free, quality and sustainable products.

Between quality, artisanal techniques, local circulation and the investments made by customers, isn’t luxury finally more sustainable than the so-called ‘classic’ brands? About 59% of luxury buyers say that their luxury purchases are more sustainable.
These new generations of demanding and seasoned consumers have clearly changed the luxury industry and what it has to offer. This industry must constantly renew itself to surprise and fulfill the expectations of these young end users.