Why Do The Millennial Generation Become A Luxury Fashion Pet?

There is no doubt that the millennial generation is now.

The darling of fashion industry.

According to the world clothing and shoe net, the definition given by the millennial generation is that people born in 1985-1995 years are full of personality, do not follow the crowd, and are very clear about their needs.

They are more eager to be free, proficient and love social media than their parents or grandparents.

According to Deutsche Bank's Pambianco, a consultancy in Italy.

The global luxury industry's total revenue in 2017 is expected to reach 250 billion euros, according to a report released on the Fashion&Luxury Summit of Luxury Summit.

Among them, the millennial generation is the main consumer group of luxury consumption, accounting for 27% of the total number of luxury consumers, and this proportion will rise to 33% by 2020.

According to the Pambianco study, the current generation of luxury goods consumers account for 25%, and this proportion will rise to 40% in the next 5 to 7 years.

In China, there are about 200 million such groups.

The millennial generation has a certain purchasing power, not yet a family member, and has little family burden and pays much attention to quality rather than price. Now social media and word of mouth have replaced the traditional media which have been occupying high opinion level, and become the main position of the dissemination of luxury brands.

A media survey of the millennial generation in China found that more than 25% of the post-90s had bought luxuries.

On the current domestic luxury goods

For consumers, they fall into four categories.

The first category is those who dream of having luxury goods. Most of these groups want to have a luxury item, but their consumption is not about those top luxury items, but some of the entry level brands of luxury brands, such as beauty perfume series and shoe series.

The second category is consumers who save money to buy luxury goods. This part of consumers is not a loyal consumer of luxury goods, and the frequency of purchase is small. It is often a luxury item that needs to be saved to buy.

The third category is fashion lovers. This part of consumers want to give people the appearance of fashion, keep up with the trend of the image, consumption frequency slightly higher.

Under normal circumstances, those who dream of buying luxury goods are always younger, consume less but have more people, and can easily change into second and third types of consumers through age and work.

The total number of consumers at each level is decreasing.

The last category is the rich consumers, who are originally the most loyal and loyal consumers of luxury brands, but now these consumers are more rational.

It can be seen that the millennial generation is a consuming group of luxury brands. This leads to the fact that the future of luxury consumption is not in the last category. Luxury brands need more power from the bottom of the demand for Pyramid.

According to the WeChat survey released by i2i group, the top four brands of China's millennial generation's most popular overseas brands are Dior, Prada, Gucci and Coach.

Alexander Glos, chief executive of i2i, says this shows that there are many Chinese millennials who want to be different from their parents' luxury brands.

These young Chinese shoppers are also the largest group of Chinese outbound tourists who contribute most to the market. They account for 50% of the total number of Chinese outbound shoppers.

These consumers' expectations of Dior and Gucci are expected. The competition between the 2 luxury brands for the millennial generation has also been reflected in performance data.

Thanks to the youth, Gucci is at its peak, pulling Hermes out of revenue for two consecutive quarters, stirring the market of luxury brands that tend to solidify.

In the first three quarters of this year, about 55% of Gucci's sales came from consumers under 35.

According to a new report by Bain consulting, an international management consulting firm, this proportion is much higher than the average of luxury brands. The Z generation of the millennials and their successors accounted for about 32% of the total consumption of luxury goods this year.

In addition to the Gucci of Kai Yun group, Dior has become the most rapidly developing luxury brand, and their common point is to conquer the millennial consumers.

In its earnings report, LVMH group stressed that its Dior fashion department, which was purchased for 6 billion 500 million US dollars this year, has made a great contribution to the growth of sales volume.

According to statistics, Dior recorded an organic growth of 12% in the first three quarters. The Group expects Dior fashion sales to expand to 3 billion euros in 2020.

As a manifestation of brand younger, the importance of digitalization is constantly being demonstrated.

Just as luxury brands are afraid of "no longer young", no luxury brand wants to be marginalized in the future competition.

However, for the big trend of luxury to seize the younger market, Hermes group CEO Axel Dumas said earlier that the brand did not deliberately cater to the preferences of young people. At present, the group has no special marketing strategy for young consumers, and is still developing according to its established rhythm.

Some analysts told reporters that in the fast changing fashion industry, how to achieve the balance between new and old consumers and the best interests is the biggest headache for Hermes. Obviously, Hermes does not want to bet on the influence of the millennials and stars on young groups.

How to connect the millennial generation, anxiety continues to spread.

In order to contact more young people, luxury brands have chosen young stars as spokesmen or brand ambassadors. A century old luxury brand suddenly chooses a more popular social media red label as spokesperson. This contrast shows the worry of luxury brands.

MICHAEL KORS announces Yang Mi to become the world's first brand spokesperson

In the short span of two years, the major luxury brands began to announce the star spokesmen of various product lines. Michael Kors announced that Yang Mi was the first spokesperson in the world. Burberry announced that Wu Yifan was the first spokesperson for non British images, including Liu Shishi of Tod 's, the spring and summer of Longchamp, the ancient girl of Fendi, the Tang Yan of Bally.

Behind the appointment of the celebrity spokesperson and ambassador, it is actually a competition for luxury brands for young consumers.

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But celebrity endorser is not a panacea.

Estee Lauder group closed the young product line The Est e Edit endorsed by Kendall Jenner earlier.

There are people in the industry who say that if you push too hard, consumers will think you are just acting cool. The Est e Edit's cooperation with Kendall Jenner is a failure case.

Worse still, policymakers find that they are becoming increasingly unable to understand young people's preferences.

Millennial consumers are for the sake of personality rather than show off. They are full of self-confidence, doubt authority and no rules. They do not bode well for traditional luxury and fashion brands. They do not know what young people like now. This is the most terrible thing.

Some analysts say that building a luxury brand takes time, resources and patience, but luxury brand shareholders are impatient. They are more concerned about performance improvement and profit rise.

Bain predicts that the millennial generation and Z generation will account for 45% of the global personal luxury market by 2025, but this is not only an opportunity for luxury brands, but also a challenge, because the way of thinking and shopping of the millennials has changed greatly compared with the previous generations.

According to Claudia D'Arpizio, a partner of Bain Research Institute, the consumers born after 1950 have a clear and stable goal for their life, such as getting a high degree, finding a well paid job, then getting married and having children, and setting up happy families. Their desire for a prosperous life is largely reflected in their consumption patterns. They generally want to show their status by buying luxury brand products.

However, a stable and prosperous life is no longer the ideal life expected by the millennial generation. Especially in developed countries, they are born at a time when economic and technological development is developing rapidly. The life that the previous generations yearn for is just a normal day for them. For them, it is more meaningful to achieve spiritual goals than material goals. This is also one of the reasons why the luxury brands are now starting to digitally reform.

In the era of digitalization, time, space and feasibility are the concepts of integration. Marketing management mode is more diverse, flexible and novel. This is the premise of new retail and full channel marketing.

Previous analysis has suggested that millennial consumers are looking for novelty rather than uniform life.

In other words, it's new and old.

Jasmine Gupta, a luxury brand consultant in London, believes that the millennial generation has three attributes. First, the millennials do not need to gain identity through brand names. They do not want to be tagging for buying a product.

Second, the digital retail channel is important, but it is not the only choice for the millennial consumers. The experience in the shop is also important to them.

Thirdly, most of the millennials have high incomes but are not rich. The idea of timely enjoyment makes most people moonlight.

Earlier analyst Jasmine Gupta criticized Tiffany's younger Hardwear series, saying that the brand was good enough to do bad things in order to curry favor with the millennial generation.

But in recent months, Tiffany&Co., once a lagging American luxury jewellery brand, has begun to return to the eyes of young consumers.

The Blue Box Caf e, which was built by Tiffany&Co., was officially opened in the flagship store of Fifth Avenue in New York, USA in November 10th. The cafe employs a large brand of classic Tiffany&Co. turquoise blue.

With the marketing of movie sentiment, the cafe quickly became the red spot of New York, and the appointment was regularly scheduled for two weeks.

When more and more young people lose interest in marriage, how to attract millennial consumers is a difficult challenge faced by jewellery brands including Tiffany.

In order to cater for the millennial generation, Tiffany's immediate priority is to weaken the brand's marriage culture.

As for the consumption scenario, with the brand concept of engagement ring and wedding culture as the core, the millennial generation is more respectful of women's self reward and "spoil themselves", and the opportunity to buy luxury jewelry products will not only relate to the wedding, but may be any reason and any occasion.

Neil Saunders, managing director of GlobalData Retail, an American retail data provider, said in an e-mail that Tiffany is trying new things and attracting consumers' attention.

As a result, the millennial generation is also reshaping the fashion retailing industry.

Based on the survey of more than 660 million online products worldwide, Edited, a fashion big data company, predicts that the fashion retailing industry will have a price war next year.

Edited analyst Katie Smith said in the report that as the millennial consumers become more sophisticated, brands will try to attract more consumers at preferential prices in 2018. For example, consumers can get extra discounts by cancelling free refund service, and there will be price wars in the fashion retailing industry.

According to the global wealth report released by the Credit Suisse Research Institute in 2017, the wealth outlook of the millennial generation is more challenging in the past generations.

Surprisingly, the data reflect the "Millennium disadvantage", which includes more stringent mortgage regulations, rising housing prices, income inequality and reduced income mobility, which impede the accumulation of wealth by young office workers and savers in many countries.

From the overall perspective of the millennial generation of the whole world, this group will not only face greater challenges in future wealth creation, but also will continue to face more unequal distribution of wealth than previous generations.

But in response to the report's worries over the future challenges of the millennial generation, the luxury industry believes that social pressures such as rising housing prices may increase the willingness of young consumers to be happy and buy luxury goods, while the more wealthy young millionaires are showing greater interest in luxury goods.

This is good news for the luxury industry.

Under the changing luxury environment, the millennial generation is becoming the driving force for the structural change of the fashion retailing industry.

The question is not whether luxury brands cater to the millennial generation, but how to establish emotional connections with the millennials, not just stars.

Analysts pointed out that the new design style of Gucci is very clear about objects, and it is the millennial generation.

The boundaries of the past are gradually hidden in this generation. They do not care about the so-called definition and rules.

Then, how long will the growth of performance last?

Risk still exists.

Skeptics believe that in order to please young people, the brand once regarded as an eternal luxury symbol has become a changeable fashion brand.

The fashion industry is full of variables all the time, traditions and rules will be overthrown at any time. Now the hottest luxury brand Gucci is also vigilant.

Now Gucci has been paying close attention to the frequency of brand customers' patronage.

At the earlier investor call conference, Jean-Marc Duplaix, chief financial officer of Kai Yun group, pointed out that the brand's millennial customer retention rate has been increasing and is now close to the customer retention rate of other age groups.

Obviously, when the fashion ring is weakening, Kai Yun group needs to constantly improve the loyalty of the millennials, and the link still depends on the product, because the barriers always exist, and the young consumers who value the values will become more and more changeable.

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