The lucrative affluent millennials set is a coveted target market – but how can luxury brands ensure they effectively capture their attention and brand loyalty? Adam Van Paris, Assistant Brand Manager and Content Curator at millennial research firm Futurecast, offers some insights.
Millennial affluence is a growing focus among some of the top brands and marketers today.
As millennials are quickly becoming the largest generation by population size, many of them are obtaining higher levels of affluence and are affecting the way premier and luxury brands are approaching their consumers.
According to our latest FutureCast study, Money Matters: How Affluent Millennials are Living the Millennial Dream, there are about 6.2 million millennial households that report earning an annual household income of at least $100,000.
Even more shocking than this number itself is the fact that this massive group of people is expected to continue to grow and is set to become the most significant audience for luxury-brands within the next five years.
“ Having a holistic view of this nascent consumer is the key to maximizing sales potential ”
Regardless of industry, having a holistic view of this nascent consumer is the key to maximizing current and future sales potential.
Today, we generally accept that millennials are trendsetters for the overall consumer economy, but who is setting the trends within the millennial generation?
Who are the millennial consumers that influence their peers to believe that organic is better and buying local is important? Who can afford to travel to Europe and share their experiences across any and all digital platforms and make the vast majority of their peers green with envy?
You guessed it; the answer is the affluent millennial group. Unlike their non-affluent millennial counterparts, affluent millennials have the means to live out millennial trends such as organic, fresh food and conscious capitalism, which are often merely aspirational to the rest of the millennial cohort.
Couple this ability to convert aspirations into reality with the fact that affluent millennials are far more likely to post online than their non-affluent peers, and it is clear to see who the influencers are within this massive group of consumers.
“ Affluent millennials do not want a brand’s constant involvement in the decision-making process ”
From a brand’s perspective, this is a crucial point to leverage. Appealing to the group of individuals who are essentially the trend leaders within a massive group of influencers can snowball into a consumer movement that spans multiple generations.
So, now the question moves from why to how. We know that this group of people is important, but how, as marketers and brands, can we win them over?
It starts with understanding that these people are very independent. Instead of looking for brands to hold their hands throughout a purchase decision, affluent millennials do not want a brand’s constant involvement in the decision-making process.
“ Every time affluent millennials purchase, they view themselves as buying stock in that company ”
Rather than peppering these people with constant communication across the purchasing path, brands should aim to be absent-but-present, or in other words, there when they are needed but absent when they aren’t.
Remember, when we say absent we are not saying not present, rather focusing more on listening than talking. Essentially, these people want to be able to make decisions on their own but feel supported by brands when they need them.
Below are a couple of case studies of luxury brands who have managed to win over the coveted millennial set via initiatives and a language which resonates most effectively with this lucrative target market.
American Express has always been a winning brand among small business owners. Now, as millennials are entering the workforce and gaining more affluence, they are opting for premium financial brands that support their entrepreneurial desires like American Express.
The most recent American Express campaign, The Journey Never Stops, features key millennial entrepreneurs talking about their journey to the top and how American Express supported them.
The key to the campaign is that it is not focused on the benefits of an American Express membership. Instead, millennial role models, like Mindy Kaling, share their stories with the implication that they would not be where they were without American Express.
“ Affluent millennials will hold brands in which they buy stock to higher standards ”
Next, it’s key for brands to understand that every time affluent millennials purchase a product or service from one of their favorite brands, they view themselves as buying stock in that company.
This goes beyond co-creation and moves into a space that establishes affluent millennials as the co-owners of the brands they love. This means that they want brands to acknowledge them as co-owners by looking for opportunities for engagement and message socialization.
This also means that affluent millennials will hold brands in which they buy stock to higher standards and will not hesitate to disassociate themselves with brands that do not meet those standards.
It is easy to understand how co-ownership plays a role in the purchase decision of affluent millennials when we narrow in on big-ticket purchases. Mercedes is a premium luxury brand and not something you would typically associate with young adults between the ages of 18 and 34.
However, the auto manufacturer has scored big among the affluent millennial population because it is a brand that millennials want to invest in.
While affluent millennials are less likely to “show-off” their affluence in a similar way as previous generations, they are more willing then non-affluent peers to make a premium purchase and feel good about that purchase because of what it means. The Mercedes brand is often associated with “making it” and affluent millennials are invested in taking part of that movement.
“ The way affluent millennials behave as consumers constantly forces luxury brands to prove their worth ”
The main takeaway here is that affluent millennials, armed with significant influence and an independent spirit, are the enforcers of their generation. The way they behave as consumers constantly forces luxury brands to prove their worth and rethink their strategies for a new generation of affluent consumers who align with general millennial trends but have their own set of standards regarding quality, value and participation.
By understanding this crucial point, and adjusting brand strategy accordingly, brands can increase their chances of winning over affluent millennials and, transitively, their non-affluent millennial counterparts.
To further investigate the millennial consumer and brand innovation on Luxury Society, we invite your to explore the related materials as follows: