How Millennial Consumers Are Redefining Luxury and Wealth
For any brand, the days of luxury being synonymous with wealth are effectively over. Today, luxury can mean authentic craftsmanship, a one-of-a-kind experience, or something that saves consumers time.
“What luxury means to me is different than what luxury means to you,” said Mercedes Abramo, president and CEO of Cartier North America, at Fortune’s Most Powerful Women Summit in Laguna Niguel, Calif. on Tuesday. “It’s a word that encompasses personalization, authenticity, and emotion, but it’s all about how you interpret it yourself.”
In the last few years, luxury experiences have undergone a seismic shift, explained Marriott International’s global chief commercial officer Stephanie Linnartz. In addition to the long-standing staples of quality, service, and comfort, consumers today are demanding ultra-personalized experiences that bring them self-actualization and personal fulfillment.
The driving force? Millennials.
“Millennials’ consumption of luxury experiences is tied to how they see themselves as people,” Linnartz said. “It’s about experiencing something new — something that’s Instagram-worthy.”
In other words, a new generation of consumers is demonstrating wealth in a different way than their parents.
Compass COO Maelle Gavet said she’s seen the trend rip through the real estate market as well. In previous years, people were looking for large, ornate homes with roomy reception areas to entertain guests. Today, home-buyers are seeking homes in more discreet, secluded areas with living rooms that are set up for intimate get-togethers with friends and family.
“The biggest criteria that defines luxury in Silicon Valley is how convenient it is for you to get to work,” she said. “People are willing to pay a premium to live close to their jobs and not sit in traffic every morning. That’s considered luxury.”
The biggest challenge for brands such as Cartier, Estée Lauder, and Marriott is keeping up with the rise of the influencer who sells directly to her followers. Think Kylie Jenner and her $900 million makeup fortune.
So how do traditional brands respond to the rising trend of influencers across travel, beauty, and retail? Linartz says Marriott has leaned into it and often partners with travel influencers who have a large following on social media. “It hits you hard that these folks have tremendous influence over consumers who trust and believe them,” she said. “It’s important we do it thoughtfully, but that we do it.”
Jane Lauder, the global brand president of Clinique, says she spends a lot of time thinking about what kind of effect the trend has on her business’s bottom line.
“When you see a person on YouTube putting on makeup in their bathroom, you feel a personal connection,” she said. “We’ll see more of that, and we’ll further see the rise of the micro-influencers. It makes it more challenging for us, but it definitely also makes it more interesting.”