The Alexander Report

Meet the Young Affluents. The generation of 40-and-under consumers – roughly corresponding to the Generation X and Millennial generations – is the “Want-It-All” generation that is coming into affluence with a ravenous appetite for the ‘good life.’ The fresh, unexpected needs and desires of the young affluents will be the most important trend to impact the global luxury market over the next decade and beyond. And savvy marketers need to be poised to meet the demands of this unique new force in the luxury marketplace.

Young affluents – consumers born after 1966 with rapidly rising incomes – will play an increasingly important role in the target market for global luxury marketers over the next ten to twenty years. This is true not just in the United States (with a median age of 36.5 years) or in the European countries (where the median age ranges around 40 years old), 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.

Luxury marketers and retailers must ‘think young’ in order to understand the young affluents and to position their brands for the future in the developed and the developing markets. Luxury marketers must understand the unique desires of the young affluents, how they express luxury in their lifestyles today and how they will do so in the future.

What Do the Young Affluents Want and How Does It Differ from the Over 40 Crowd?

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 so many years of targeting this generation with their luxury goods and services. 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.

One key difference that distinguishes the young affluents from the older generation of luxury consumers is their dedication to expressing their luxury lifestyles by acquiring more luxury goods. Older luxury consumers, by contrast, are more focused on acquiring new life experiences and are less materialistic in their consumer orientation. For example, in 2006 the most vibrant segment in the luxury market was the young affluents. They spent a stunning 31.9 percent more on luxury goods and services in 2006 than the over 40 year olds, according to the latest research on the luxury market conducted by Unity Marketing.

Pamela N. Danziger is a nationally recognized expert specializing in consumer insights, especially for marketers and retailers that sell luxury goods and experiences to the masses or the ‘classes.’ She is president of Unity Marketing, a marketing consulting firm she founded in 1992. http://unitymarketingonline.com/