Affluent Millennials and Luxury GuiltThursday, July 30, 2015
If you sell luxury goods or services, it's important to understand how affluent millennials (born 1979-2000) relate to money and higher-end products. While Boomers are known for keeping up with the Joneses and Gen X is known as the “Me Generation,” millennials are actually less materialistic. Their desire for money is tied to a desire to spend time with the people they love, not on the objects they can buy. Appealing to a sense of “stuff” won’t be effective in marketing to this generation as the prestige of "having more" doesn't motivate millennials.
Millennials are generally good with money. 84% consider budgeting an important aspect of their lives, two-thirds have a financial plan for the future, 28% have enough saved to cover at least six months of living expenses, and 37% are already saving for retirement. While this generation spends $172 billion per year, they also save $39 billion per year. It's no surprise then that Groupon was founded by a millennial.
Even if a bride or groom's parents are paying for the wedding, the couple will usually be more cautious in how they spend than their parents will. Affluent Boomers tend to shop to impress, so they are more likely to give the okay for a budget increase or green light a more expensive wedding professional. Affluent millennials take more convincing.
Even though they're young, millennials already have a high earning power. Further, their mindset about wealth is different than previous generations. Most millennials who earn in the mid six-figures don't consider themselves wealthy and they describe themselves as staunchly middle class. Even the millennials who will admit they are affluent still describe themselves as having middle class values.
While millennials are close to outspending Boomers on luxury items (34% and 37%, respectively), this generation justifies luxury purchases as needs, not unnecessary splurges:
"I really need the Apple Watch because it is an investment in my health."
"I really need this expensive vacation because I've been working hard and I need to keep my stress levels balanced. It's not a frivolous splurge, it's an investment."
"I really need this piece of artwork for my house because I want to feel a certain way when I come home. It's an investment in my mental health."
"We really need these specific bridal professionals and items for our wedding because our friends and family mean so much to us and are flying all this way and we want to give them an experience they'll never forget."
If you work in the luxury wedding market, this is important: millennials do not relate to the word "luxury." Yes, they are spending on it, but to a millennial, the word luxury means "frivolous" and their wedding is anything but frivolous. It is a meaningful event and they expect it to be treated as such. Even though their budgets may fall into the high-end categories, marketing yourself as a "luxury wedding professional" does not connect with this age group as much as it did with Gen X. Furthermore, if your brand has the word luxury (or any variation of it: luxe, luxurious, etc) in your company name, you will not be connecting to this generation in a relevant, powerful way.
You may not have to change any part of your process in reaching the millennial generation, but the words you use do matter. De-luxing your language will make your marketing more relevant to this age group.
Originally published March 2012