- According to a report by Bain & Company, Generation Y and Generation Z are expected to account for all the growth in the luxury market in 2022.
- The report states that the younger generation will become the biggest buyer of luxury goods by 2030.
- Gen Z and Gen Alpha spending will grow three times faster than other generations by 2030.
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According to a report, by 2030 Generation Y, Z and Alpha will become the biggest buyers in the luxury market, accounting for at least 80% of global purchases.
Millennials born between 1980 and 1994 are referred to as Generation Y, while Generation Z refers to those born between 1995 and 2009. People born after 2010 are part of the Alpha Generation.
Not only will they be the highest spending group, Gen Z and Alpha Gen spending is also projected to grow three times faster than other generations by 2030, taking up a third of the luxury market.
The Bain report states that this is a reflection of the generation’s “precocious attitude towards luxury”.
These trends are already clear
Large numbers of young Americans between the ages of 18 and 29 are choosing to live with their parents, at a level not seen since the Great Depression era, potentially freeing up disposable income for luxury spending. Used to be.
Insider’s Dan Latu and Kelsey Neubauer took a look at young people’s spending habits and talked to 20-somethings who live at home and spend on cars, designer handbags and nightclubs.
These habits may also be a result of the rise of the luxury resale market, with Generations Y, Z and Alpha viewing luxury goods as valuable investments.
For example, a Chanel Medium Classic flap bag sold for an average of $3,900 in 2011, according to data compiled by Nasdaq. A decade later, the price has skyrocketed to an average of $7,800.
A bag bought in 2011 can give 200% return on investment in 2021.
Drawing parallels with the S&P 500 index, a dollar invested in 2011 could generate a return of approximately 149% in 2021.
Which shows that some luxury items are not only a fashion investment for self-indulgence, but have the potential to be profitable financial investments.
Clothing to lead growth in sales of personal luxury goods in 2022
The Bain report noted that luxury personal items performed well last year, with clothing leading the sector’s growth.
Generations Y, Z and Alpha are spending more on luxury clothing due to the “post-streetwear” phenomenon.
Some of the elements of later streetwear include gender fluidity, inclusivity, and a disregard for occasion. Instead of focusing on what’s hot, young consumers are more concerned with the technology, materials and functions of clothing, according to Bain’s report.
Bane sees record rise in luxury footwear, where generations Y, Z and Alpha aren’t splurging on the iconic Nike Air Jordan 1 sneakers, but buying Birkenstock-looking shoes, formerly known as “facebeat sandals” .
These sandals often have a raised platform made of a lightweight material and have straps or buckles to secure the feet.
Bain also stated that the luxury market will move away from traditional business models towards virtual shopping experiences such as Web 3.0 and the Metaverse.
This is expected to make luxury items more accessible and drive sales for Gen Y, Z and Alpha consumers.
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