By: Dr. Adilla Anggraeni, MBA.

Luxury product is an inseparable part of our life. The need for personal gratification and aspirations has led to greater emphasis on having things which make life better and easy. It means that consumers want to improve their life (Srinivasan, Srivastava & Bhanot, 2014). It has been understood that Luxury brands possess a desirability that extends beyond their utilitarian functions and provide the consumer with a perceived status through ownership (Latter, Phau and Marchegiani, 2010).

Nowadays, wearing luxury product is not associated to a certain type of age. The luxury brands themselves have started to realize that the young consumers are the ones injecting lives to their business sustainability.

It is interesting to note that emerging markets of this luxury companies consist of younger customers compared to their more traditional clients. These clients also happen to like novelty; always seeking for new variety of product and often obsessed with it. Generation Y is often characterized as always wants to be surprised and constantly pleased by their purchase (Temperley, Jones and Ruckelshausen, 2012). These characteristics set them apart from their predecessors.

Asia and Asians in particular have an exciting love story with luxury products (Chadha and Husband). In some Asian countries such as China and Taiwan, wearing revealing dress is often frowned upon. Using a luxury handbag is seen as a way to stand out without having to break the norms. A particular luxury handbag may differentiate them from the other women, and it functions as a not-so-subtle fashion statement that also projects their individuality and personal characteristics.

In China, the luxury consumers fall under the age of 20 and 30 and are a part of a generation with one child policy. These individuals have become a significant segment for luxury consumption (Atsmon, Dixit, Leibowitz and Wu, 2011). Accounting for about 300 million people, these young consumers are not only unique as a collective group, but they also are highly individualistic (Moor, 2005).

The Western market shows similar trends. According to American market research agency Unity Marketing, the millennials/Gen Y consumers (people currently aged 18-34) will become the largest generational segment in the luxury market in the US in the year between 2018 and 2020. Megan Wintersteen, lead planner at New York-based digital agency Huge, stated that giving a behind the scene glimpse of a luxury brand fashion show would enable them to develop stronger attachment and brand identity that millenials would be able to relate to.

Millennial generations tend to question everything (www.livelymag.com). Thus, it becomes an additional task for the brand owners to be able to build strong brand meaning if they want these individuals to have brand loyalty. Brand meaning should be fostered at the early interaction with the customers as a tool to drive growth.

Another trend of millennial shopping trend is e-commerce and enhanced retail shopping experience. Millennial consumers are already well attuned to the premise of shopping via non-traditional, inspiration-based sources such as shoppable print magazines, and expect to see retail enhanced by content. Entice millennials by emphasizing the wider lifestyle aspects of your brand stories.

References

Atsmon, Y., Dixit, V., Leibowitz, G. and Wu, C. (2011), ”Understanding China’s growing love for luxury”, McKinsey Consumer & Shopper Insights, McKinsey Insights China, McKinsey & Company, New York, NY, March.

Latter, Chelsey, I.Phau and C. Marchegiani (2010) Luxury and Haute Couture in the Generation Y Market: Consumers’ Need for Uniqueness and Status Consumption, ANZMAC 2010

Srinivasan, Dr. R.K. Srivastava & Prof. Sandeep Bhanot (2014) Attitudes of young Indian consumers towards luxury brands

Temperly, John, B. Jones and B. Ruckelshausen (2012) Generation Y’s luxury fashion consumption behaviour – A comparative qualitative study of the male consumer in Leeds (UK) and Frankfurt (GER)

Electronic resources: https://www.economist.com/news/special-report/21635762-young-people-choose-and-buy-differently-marques-millennials

Dr. Adilla Anggraeni, MBA. is currently the Deputy Head of Business Management and Marketing and Faculty Member in Business Management and Marketing Program at Binus Business School International Undergraduate Program. Further about her profile can be found here.