What’s the trend? A shift in the meaning of luxury away from materialism and exclusive, designer products towards a premium on lifestyle and experiences, with a strong push coming from the millennial generation.
What’s New
Traditionally, luxury referred to something enjoyed by certain people and not others. Luxury was associated with privilege, exclusivity and nonattainability.1 Now this definition is being redefined. Flash sales from online companies like Gilt are making luxury items more accessible and blurring lines of previously unattainable products. People also feel better when they purchase high-quality goods at a lower price. Savvy shoppers and mindful consumers have become especially enviable by their peers after the economic crisis.2 Further, the economic crisis and following recession highlighted how quickly money can disappear, and demonstrated for some that culture and enriching life experiences are the only secure form of wealth.3 Technology has contributed as well, making people infinitely more aware of what exists outside of their immediate realm, fueling a desire to travel, see and experience all the world has to offer.4 It has particularly opened the eyes of passionate millennials, who often sacrifice stability and the traditional sense of luxury to experience more and follow their dreams.
According to Pam Danziger with Unity Marketing (a consulting firm focused on the buying behavior of luxury consumers), millennials forgo style in preference for substance in their spending and travel pursuits.5 A 2014 Eventbrite nationwide study of millennials found that 78% of millennials would choose to spend money on a desirable experience or event over buying something desirable and 82% said they attended or participated in a live experience in the past year ranging from concerts and festivals, performing arts, and sports competitions. In addition, 72% say they plan to increase their spending on experiences rather than physical things.6 Food has also become a big part of this new meaning of luxury for millennials. It is not just about the food, but also about the experience and environment while consuming a new dish, cooking a new recipe or trying a new restaurant.7 Moreover, according to a study conducted between UCI and GFK, the desire to own objects has dropped as evident through an 11% drop in the total population thinking that “the Good Life” means owning a luxury or second car. Millennials, particularly Hispanic Millennials, are ahead of this curve as they are embracing this new status by choosing access (through companies such as Citibike and Zipcar) over ownership, because, it is the experience that matters not the object itself. 8
Why it Matters
Much of this shift to experiences over things can be attributed to a search for authenticity. Brands that want to remain appealing and competitive will need to provide authentic products and experiences for their consumers. In the same UCI and GFK study, one of the top five commonalities found among millennials includes ‘authenticity.’9 This is particularly relevant to the Hispanic consumer as they are fiercely loyal to brands that are transparent, authentic and help empower their cultural relevancy.10 Opportunity exists to employ experiential promotional tactics for Hispanics that, highlights their culture and heritage, and values the brand experience as much as – if not more than the brand’s products. How can your brand create “luxury” via a meaningful experience?
References
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Saletta, Lindsey. (2015). “The New Meaning of Luxury.” The EveryGirl. http://theeverygirl.com/the-new-meaning-of-luxury.
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Havas Worldwide. “The New Consumer and the Sharing Economy.” Prosumer Report, Vol. 18, 2014. Source: Warc.
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Sophocleous, Andrea. (2014, March). “Diageo adapts to changing definitions of luxury.” Event Reports – WFA Global Marketers’ Conference. Warc.
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Saletta, Lindsey. (2015). “The New Meaning of Luxury.” The EveryGirl. http://theeverygirl.com/the-new-meaning-of-luxury.
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Merlino, Diane. (2014, June). “Millennials Redefine Luxury Travel.” Northstar Travel Media. http://www.travelagewest.com/Travel/Trending/Millennials-Redefine-Luxury-Travel/#.VMEzsEfF98G.
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“Millennials: Fueling the Experience Economy.” (2014). Eventbrite. http://eventbrite-s3.s3.amazonaws.com/marketing/Millennials_Research/Gen_PR_Final.pdf.
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Bliss, MaryLeigh. (2014, October). “Is Food The New Status Symbol?” Engage: GenY MediaPost. http://www.mediapost.com/publications/article/235941/is-food-the-new-status-symbol.html. Also See Trend Lab December 2014, Millennials: The Foodie Generation
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Sheehan, Kathy. (2014). “Decoding Y: Millennials Revealed.” Study between Univision Communications Inc and GFK.
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Sheehan, Kathy. (2014). “Decoding Y: Millennials Revealed.” Study between Univision Communications Inc and GFK.
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Llopis, Glenn. (2012, May). “Don’t Sell to Me! Hispanics Buy Brands that Empower Their Cultural Relevancy.” Forbes. http://www.forbes.com/sites/glennllopis/2012/05/14/dont-sell-to-me-hispanics-buy-brands-that-empower-their-cultural-relevancy/.
