The oldest of the millennials – generation born between 1980 and 2000, are now 35 years of age and form a part of the target consumers of most high-end luxury brands. This generation is technology savvy and thrives on availability of global information.
According to the Cassandra Report, published by Jamie Gutfreund, chief marketing officer for Noise/The Intelligence Group, 72% of the millennials mention that luxury is about quality and 41% say that luxury is about the endurance of the object. This generation invests in luxury items looking at the resale value of those items – i.e. like investors and not consumers.
The involvement of this set of consumers extends beyond the product, to the brand. They put emphasis on the brand’s reputation, reviews of other users and the brand’s story, before making a purchase. The advent of social media has made it easier for communication between a brand owner and the consumer to be two-sided. Millennials participate in this conversation to contribute to the brands that they believe in. Milton Pedraza, CEO of the New York City–based Luxury Institute, says that millennials consider themselves as ‘consultants’ to the brand and expect themselves to be heard. By making a purchase from a brand they like, they are investing in the value of the brand.
According to McKinsey report – “A multifaceted future: The jewelry industry in 2020“, two of the major trends that we will witness are ‘Internationalization of brands‘ and ‘Growth of branded jewelry‘, where it predicts that branded jewelry will constitute about 30-40% in 2020 up from 10% in 2003. Whereas according to another report by McKinsey “Perspectives on the diamond industry“, other luxury goods are growing in the market and for success of the diamond category, it is imperative that the industry is able to differentiate itself and present an image of diamonds being more valuable and attractive than other luxury goods. The key to do that may lie in effectively communicating with and engaging millennials.
This generation of consumers is just beginning their careers and will contribute increasingly to demand for luxury goods. For jewelers and retailers the study of thinking pattern of this generation is the passcode to long-term success.