The 15th edition of the Bain Luxury Study, published annually by Bain & Company, underlined in statistics what we've all known for some time; we are in the middle of a shift in luxury spending away from luxury goods and toward luxury experiences, such as travel and gastronomy. Indeed, the travel sector grew faster than luxury goods by at least 5 percentage points last year.
The Luxury Futures Report by The Future Laboratory, posits that much of this change is being driven by demographic shift,"Baby Boomers have been the dominant force in luxury consumption, but by 2025, 85% of luxury spending will be in the hands of Generations X, Y and Z. This demonstrates a consolidation of power and influence among those under the age of 52 who have very different priorities to their older counterparts. Younger Millennials and Generation Z – what we refer to as Generation D, or Generation Digital – demonstrate attitudes that are in some ways incompatible with the current articulation around luxury."
We asked some of our favourite luxury brand managers for their View on the redirection of luxury spending worldwide, and how established brands can meet the challenge of appealing to these younger consumers without alienating their traditional core.