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By: Pam Danziger
Posted: May 3, 2007, from the May 2007 issue of GCI Magazine.
page 6 of 7Luxury Lesson #8—Luxury consumers exhibit differences of degree, not of kind
The differences we find within the luxury market are primarily behavioral, not motivational. Behaviorally, different luxury consumers might buy more or less of a certain type of luxury product—for example, the more affluent buy more luxuries and spend more when they do simply because they can—but as far as the motivations for buying luxury go, the differences are minor because all luxury consumers up and down the income scale gain their greatest luxury thrills from experiences.
Unity Marketing’s latest study of the luxury market examines and compares the 40-and-under and the over-40 luxury consumers. The report, Generations of Luxury, details what the young luxury consumers want and how their tastes and perspectives differ from the over-40 set. It includes eight key trends that distinguish the young affluents from the more mature, as well as the marketing implications of these trends for luxury brands.
Young affluents—roughly corresponding to the Generation X and Millennial generations—will play an increasing[ly] important role in the target market for global luxury marketers over the next ten to twenty years, not just in the United States (median age 36.5 years) or in the European countries where the median age [is] around 40 years, but in the developing luxury markets, like Brazil (median age 28.2 years), India (24.9 years) and China (32.7 years), where the population as a whole is more youthful.
The global luxury market is going young, so luxury marketers must learn to think young in order to survive and thrive. Global luxury marketers have gotten used to the passions and nuances of the maturing baby boomers, after years of targeting this generation. Now they have a new challenge to appeal to the young affluents who have different ideas about luxury and different priorities in how they spend their wealth.