BY: JAMES HALE
Luxury. It’s a phrase that, for many, conjures images of extravagance: Growling sports cars, champagne in hot tubs, caviar, and priceless jewelry all spring to mind. For centuries, the basic concept of what luxury is has remained fairly static – but things are changing.
Jean-Claude Biver, chairman of Hublot, a luxury watchmaker, said to CNBC, “Every generation brings its own trend, its own taste, its own way of living. The younger generation is more disruptive.” He wasn’t wrong – millennials are rejecting the traditional model of luxury in favour of a more transient, experiential existence.
In its essence, luxury is the industry that provides consumers with products and services of the most exclusive nature. Traditionally, these products are steeped in heritage and top craftsmanship, and are attached to a brand whose name alone is enough to guarantee a high price.
As Generation X is gradually being replaced by their millennial offspring, one thing has become clear: millennials don’t want the same things as their parents. The idea that ‘luxury’ is a definable thing at all – is being redefined.
Travel
Luxury travel has for decades been associated with all-inclusive 5-star resorts, picturesque beaches, and a jet-setting lifestyle. While there’s still a huge market for this type of travel, the younger generation quite literally aren’t buying it.
Seventy-eight per cent of Millennials, according to a Harris Group study, would rather spend money on experiences than things. For Generation Y, it’s all about doing things, not buying things. This is at odds with the classic mode of luxury travel – millennials would rather go exploring or backpacking than lay on a beach all day. Furthermore they would rather stay with a local, couch surf or use Airbnb than spend a week in a top notch hotel.
The rise of voluntourism is another example of how young people are interested in spending their time as they travel, and new options are appearing constantly. Industry giants like Airbnb have dramatically altered the way we can holiday, and some holiday providers are using this as a basis for even more unique and exciting travel choices – fancy becoming a vagabond in a campervan for a week? No problem.
When it comes to travel, social responsibility is also something millennials take seriously. The luxury travel industry particularly, with its expensive and resource-draining offerings, often has a heavy toll on environments and economies.
With local communities fighting back against the negative impact of numerous, oft-empty, second homes, there has been a surge in popularity of fractional ownership of luxury homes. Property investment funds are emerging which cater more to modern sensibilities, by offering shared ownership of luxury homes – reducing damage to local economies, and appealing to wealthy millennials who don’t want to feel tied down.
There has clearly been a shift in the way Generation Y want to experience the world, which doesn’t match up with traditional values of luxury, and travel providers are adjusting their offerings accordingly.
Food
Millennials really care about food. They don’t, however, think about food in the way that luxury consumers traditionally might; it’s no longer all about elusive or unique products like caviar, truffles or lobster, it’s about responsibility and quality.
The surge in popularity of farm-to-table restaurants and markets is a good indicator of how the younger generation think about food. They want to know where their food comes from, and they care about the impact their eating habits have on the world. Movements geared towards sustainable produce supported by chefs like Jamie Oliver have helped pioneer a new way of eating, and millennials would rather eat responsibly than indulge in expensive foods that negatively impact the environment.
Sustainability isn’t the only thing that millennials care about – quality is just as important. The younger generation aren’t willing to shell out a small fortune on food and drink just for bragging rights – they want their money to be well-spent, on high quality products.
The huge and growing popularity of craft beer, and brewers who take real pride in creating the highest quality produce, supports this idea – with The Guardian reporting an 8 per cent rise in the number of breweries in the UK in 2016.
When it comes to food, the old-hat notions of luxury are being thrown out by millennials who are far more conscious of ensuring that the quality of the product matches the price, and who are aware of the impact their choices have on the environment.
Material goods
It would be naive to suggest that all millennials have abandoned any sense of materialism. There will always be a market for luxury goods, and people of all generations will continue to buy expensive and upmarket products.
The millennial generation, however, does seem to be less interested in paying for something purely because of its brand. The backlash on Twitter and other social media platforms when Kanye West’s ‘Yeezy II’ line was released is indicative of this. Many millennials aren’t buying into paying top dollar for something purely because it’s associated with a celebrity or big brand name.
Millennials are more interested in goods and products that serve a specific purpose. That purpose might be simply to supplement the way they want to present themselves (think ‘hipster’), but the key thing is that old school luxury, and modern flash are no longer the main priority for Generation Y.
It’s clear that as the modern world rapidly advances and changes, its citizens are carving out new identities for their own future. The world is no longer a stable place, and the long-accepted traditions of the luxury industry are being subverted by a generation that, more than anything, is stopping and questioning the things it’s spending money on.
Gone are the days when the majority would aspire to the same ideals of luxury. Gone are the days when a brand name alone qualified something as top-tier. Gone are the days when consumers accepted something packaged as ‘luxury’, without the same scrutiny as everything else they spend their hard-earned money on.
Whether or not you agree with Jean-Claude Biver, that Generation Y is ‘disruptive’, it most certainly is the future of our world and our economy. It’s crucial that we pay attention to what millennials really want, and when it comes to luxury, they clearly have a very different idea of what that should mean.
