Millennials with incomes over $100,000 will define the next wave of luxury spenders.
That is among the findings of two studies presented by George Scribner, senior vice president, people planning, at advertising firm Digitas, during a program on “Affluence in America — The New Consumerism Landscape,” held by the Luxury Marketing Council this month in New York. The findings were based on data from the Mendelsohn Affluent Survey and the Mendelsohn Affluent Barometer.
Given their age and income levels, the Digitas study indicated, these emerging millennials — those between 18 and 35 who already have annual household income between $100,000 and $199,000 — have the greatest chance of hitting the $200,000 mark. While this group is buying Armani, Cartier, Gucci and Mercedes, also ranking high on their brand preference list are Diesel, Sephora and Marc Jacobs — plus Google.
In the U.S., affluence requires a minimum of $200,000 in annual household income, according to Digitas.
Scribner told the marketing professionals attending the presentation that while millennials constitute only about 12 percent of the consumer base, this is the group to go after, as they will likely achieve significant wealth over the next decade.
Those 35 and up with incomes under $200,000, dubbed “aspiring consumers,” make up 70 percent of the population, who work primarily in service-related occupations. Many are overleveraged.
“They’re back to being middle class [and the] younger [Baby] Boomers are squeezed by the recession, with many now thinking about their retirement,” said Scribner.
These Boomers prefer brands such as Seiko and Lee Jeans, while younger Generation X consumers favor Gap, Diesel, Cover Girl and Nicole Miller.
The remaining three groups covered, making up the remaining 18 percent of the population, are the affluent, defined as having incomes of $200,000 to under $500,000; the wealthy, at $500,000 to under $1 million, and the rich, with $1 million-plus. The affluent, those largely employed in software design, advertising and public relations, are buying Missoni, Elie Tahari, Burberry and Marc Jacobs. The wealthy, core C-level executives and business owners, said favorite brands include Chopard, Ermenegildo Zegna, Hermès, Armani and Thomas Pink. The rich prefer Hermès and Bergdorf Goodman.
The latter two groups also have a preference still for the daily newspaper, even though they, too, have become active participants in the digital mobile age.