NEW YORK: Over the next decade luxury brands will have to rethink their marketing approach as the millennial generation moves into its peak earning years, according to a new report which anticipates a spending boom in 2026.
In Millennials on Road to Affluence: Mapping a Path to the Next Luxury Generation, Unity Marketing says that this age group is set to become the main customer for marketers "at the high-end and low-end of the market and everywhere in between".
And those same marketers are going to have to "learn a new bag of tricks" to appeal to their very different tastes, attitudes and perceptions.
"They will need to understand that millennials are going to be as different from their parent's generation [the baby boomers] as the baby boomers were from their World War II/Swing generation parents," Pam Danziger, president of Unity Marketing, told Luxury Daily.
She added that "millennials will define luxury in a brand new style and express luxury in brand new ways".
Older millennials are already entering their peak earning period, but Unity Marketing suggested another ten years would pass before their numbers reached the critical mass that would spark a consumer boom.
And at that point they would not be following the conspicuous consumption path of their parents.
Danziger explained that Unity's research had established that millennials on the road to affluence had middle-class tastes rather than luxury ones when it came to possessions like homes and cars.
"What they did aspire to was a lifestyle that gave them time to express their personal passions," she said.
That meant eschewing long working hours and adopting a more modest lifestyle in order to gain time "to goof off and play with family and friends and plenty of vacations".
Brands are no longer regarded as status symbols to be aspired to. Instead, said Danziger, marketers "need instead to focus on inspiration … inspiring their customers to desire their brands as the best-of-the-best and quality that will last and be a true classic".
Warc's Toolkit 2015 also highlighted the role of millennials in the year ahead, noting that even though they were among the most-researched generation ever, many marketers still struggled to find the right way to engage them.
The reverse also holds true, as this generation is the most clued up about the brands it is buying and has high expectations of them.
Data sourced from Luxury Week; additional content by Warc staff