Marketers spend an enormous time focusing on understanding and securing the Millennial market. This segment will spend approximately $49 billion across luxury categories in 2016, according to a new report by YouGov.
The older generations, which typically include the Baby Boomers and Generation Xers, control the “lion’s share” of luxury spending across nine all the categories, from fashion to travel. This group is projected to have a combined spend of $215 billion – this is big news for the luxury hotel field, in which our boutique travel PR firm specializes. In the “2016 Affluent Perspective Global Study,” YouGov delves into the difference between the two main demographics and how each approaches and interacts with luxury brands.
“It’s important not to lose sight of the fact that this year Boomers and Gen X together will spend 4.5 times more than the Millennials across the nine categories we monitor,” said Cara David, managing partner at YouGov. “Marketers should be careful not to sacrifice one for the other.”
The study surveyed individuals from the top 10 percent of households, who earn more than $150,000. That category also travels and stays in luxury hotels.
Foreseeable spending
Millennials in the U.S. comprise 400,000 of the wealthiest households and their spending is projected to increase by 8 and 10 percent,. Research points that discretionary spending by the top 10 percent will reach approximately $2 trillion.
The study showed travel spending increased from 2015 to $119 billion. Notably, each market segment studied spent more on travel – upwards of 16 percent.
Where To Focus Brand Awareness
The study suggests the best approach is to focus on brand awareness among Millennials by targeting along with their parents, rather than directly reaching out to the younger, coveted demographic exclusively. There is so much in the news about the younger generation this is an important piece of news for marketers of luxury.
For Millennials, the price of luxury goods and experiences signifies its quality. It is interesting to note that while 69 percent of Millennials subscribe to this perception, only 51 percent of Gen Xers and 39 percent of Boomers weigh in similarly.
“Millennials cite price as the number one indicator of luxury,” the study said. “For luxury brands and luxury brand managers, this means that there is a need to help them evolve from a relatively immature consumer to one that will come to appreciate the true value of luxury including the artistry and craftsmanship of the product or experience itself.”
Luxury hotel marketers should heed these projections in their approaches to capturing the greater spending anticipated by all the groups studied.