Trends Shaping the Luxury Market by 2025
Boston Consulting Group (BCG) and Altagamma published a recent study on the transformation of luxury market by 2025. The report shows that Millenials will be leading consumers of the luxury market and they will be expecting much different things from previous generations. Today Millennials( born from 1978-1992) represent only about 32% of spending in the personal luxury market, but by 2025 they are expected to make up 50% of the total market . Some 130% of market growth in the next seven years will be attributed to the Millennial generation.
The study has concluded a list of transformational trends that influence Millenials and Gen-Z in the luxury market through a survey carried out with luxury consumers.
Millenials demands non-traditional ideas from luxury brands. “Millennials are looking for innovation in design, along with unique collections that reflect their individuality and values.” Sarah Willersdorf, partner and managing director at BCG told Forbes. Some examples of the most purchased collaborations among true-luxury consumers are Fendi&Fila, Nike&Off-White, Chanel&Pharell etc. These collaborations are often presented in limited editions and timed drops, handsbags are the most in demand (purchased by 47% of true-luxury consumers surveyed) and then followed by sneakers (33%).
2) The second-hand luxury market
The second-hand luxury market is predicted to grow and the leading country is the U.S. in which consumers surveyed with 50% participating in it either as a buyer (18%) or seller (11%) only or both (21%). Scarce, limited-edition, special sold-out collaborations that were missed the first launch or vintage items are the reasons true luxury consumers are attracted by buying second-hand besides the lower price. Highly rated second hand platforms like Vestiare Collective and Vinted makes trading accessible with their professional services and guaranteed authencity and quality.
3) Sustainability in luxury
More than half of the luxury consumers (56%) in this study are concerned about the sustainability efforts and it affects their purchase decision. Luxury consumers are more informed about sustainability which have led them in desiring to be socially responsible before consuming. Millennials prioritize the environment and animal treatment more, while Boomer’s primary concern is ethical manufacturing.
4) Gen-Z as the next luxury generation and the trends that matter
Gen-Zs will carry and enlarge the trends driven by Millennials but at the same time remain different from them. Gen-z have their own sets of behaviours and values. They are predicted to be more influenced by sustainability and be more active in the second hand luxury market. Gen-Z prefer mix and matching luxury brands with premium, niche, sports and fast fashion brand. “As these brands, which we call ‘aspirational,’ become better quality and more sustainable, traditional luxury brands will have to get even better faster to stay in the lead,” Willersdorf explains.
Gen-Zs are also deeply influenced by social media influencers like Chiara Ferragni. Social media influencers are relevant in shaping consumers purchase decisions.
Last but not least, many of Genz are still living at home and they are an influence to their Boomer and Gen-X parents when purchasing. Luxury brands need to take a closer look and give attention on Gen-Zs in the future in order to strengthen the luxury market.
Read Other Articles Here :