THE AM PANEL€¦ · Affluent Millennials luxury brands study The following study was conducted in October 2017. The study explored the topic of luxury brands amongst Millennials

2018 Affluent Millennials Luxury Brands Study

THE AM PANEL

Affluent Millennials actually embodied more of the traits we often associate with Millennials as a whole, in particular…

They are very status conscious, and use brands as a reflection of their status to others. And they treat what brands stand for as a reflection of their own personal values.

They demand a lot from brands – including the usage of sustainable practices and fair working conditions. However the reward is an extremely high degree of brand loyalty.

BBC Global News produced an award-winning study into Millennials and their relationship with brands. By exploring Affluent Millennials in particular, we learned three things:

In 2016…

In 2018 we want

to take this

further…

In 2017/2018, we are exploring how Affluent Millennials engage with brands from specific categories such as:

Leisure Travel

Luxury Goods

Consumer Technology

Banking and Finance

For each of these, we want to know: • How do Affluent Millennials consume in the category? • What do they look for from brands and service providers? • What advertising strategies are Affluent Millennials most receptive to? • What ways can brands effectively engage with Affluent Millennials?

Affluent

millennials and

luxury brands

For many generations, Luxury Brands have been synonymous with success and achievement.

Millennials and Luxury Brands

Purchasing and owning luxury brands has served as a marker of success and achievement throughout ones life.

25 years old

30 years old

35 years old

45 years old

50 years old


However, Millennials are “the first generation to approach adult life in less favourable economic conditions than their parents”1, and this has changed their perception of the role of luxury brands:

SOURCE: 1. D’Arpizio in ‘How Millennials Will Reshape the Luxury Market’, Forbes, Jun 2017

With economic instability, the prospect of success and achievement coming from hard, sustained work is less certain.

Changes in financing and credit means that luxury products can be obtained anytime, and therefore erode their position as achievement markers.

Social media has moved status signaling online, where ownership of brands has become a reflection of what you stand for.

Global awareness has changed Millennial’s value system and what they expect from brands and corporations.


Millennials came of age in a time of disruption, where a lot of the rules about career, success and status had gone out the window. It might seem that luxury brands have to rethink how they engage with this generation.

But how much of this is true for Affluent Millennials? This group make up around 17%1 of all Millennials, but have tremendous buying power. Do they embody what we think we know about all Millennials, or are they something else entirely? And what does this mean for Luxury Brands? This study aimed to find out…

SOURCE: 1. GlobalWebIndex Q1-Q3 2017 (n=134K) Analysis of 16-34’s across 40 countries. Affluent defined as top 25% for HH income in market

Affluent Millennials luxury brands study

The following study was conducted in October 2017. The study explored the topic of luxury brands amongst Millennials. 2,692 respondents aged 16-34 from 8 countries around the world participated in an online survey: Australia, France, USA, Germany, Canada, Singapore, South Africa and Hong Kong Millennials were defined as those aged 16-34. ‘Affluent’ was defined as being in the top 25% by household income for your market. The fieldwork was carried out by GlobalWebIndex (GWI).

Key take-outs

10.4%

8.5% 7.9%

SOURCE: GlobalWebIndex Q1 & Q2 2017 BASE (n=38.8K) respondents across 40 countries. Affluent defined as Top 25% by HH income in market.

Have purchased any of 17 top luxury brands in last 2 years (%)

They are more frequent buyers of luxury goods than the affluent in other generations

Affluent Millennials

Affluent 35-54s

Affluent 55-64s

1. Whilst we know all affluent consumers love to buy luxury goods, it is affluent Millennials who are the luxury goods generation

Agreement with statements on brands and products (%)

…and are more conscious of brands and premium products than the affluent in other generations

Non-Affluent Millennials

‘I am a brand conscious person’ ‘I tend to buy premium versions of a product’

52%

53%

62%

58%

59%

66% Affluent Millennials

Affluent 35-54s

Affluent 55+

1. Whilst we know all affluent consumers love to buy luxury goods, it is affluent Millennials who are the luxury goods generation

SOURCE: GlobalWebIndex Q1 & Q2 2017 BASE (n=38.8K) respondents across 40 countries. Affluent defined as Top 25% by HH income in market.

2. Affluent Millennials across our 8 markets spent twice as much on luxury goods in the past 12 months than their non-affluent counterparts

SOURCE: 1. BBC Affluent Millennials Oct 2017 BASE: (n=2,189) 16-34’s in the Top 25% by HH income for their market. (USD) = approximate conversion to USD currency.

Spending in luxury goods in past 12 months by Affluent Millennials, and comparison to non-affluent millennials1

Market Spent in past 12

mths % Difference to

Non-Affluent

Australia AUD 2.2K (USD 1.7K) ↑45%

Germany EUR 1.7K (USD 2K) ↑88%

USA USD 2.3K ↑178%

Singapore SGD 3K (USD 2.2K) ↑103%

Canada CAD 1.78K (USD 1.4K) ↑90%

Hong Kong HKD 27K (USD 3.4K) ↑77%

France EUR 2K (USD 2.4K) ↑113%

South Africa ZAR 43.6K (USD 3.5K) ↑115%

AVERAGE ↑101%

63% of Affluent Millennials say that they purchase luxury goods multiple times per year versus 49% for Non-Affluent Millennials.

3. Affluent Millennials plan to spend 2.5% more on luxury goods next year than they spent this year

Average planned spend on luxury goods in next 12 months by Affluent Millennials, and YOY comparison

Market Planned spend in

next 12 mths % Diff YOY

Australia AUD 2.4K (USD 1.9K) ↑9%

Germany EUR 1.9K (USD 2.3K) ↑9%

USA USD 2.4K ↑5%

Singapore SGD 3.1K (USD 2.3K) ↑4%

Canada CAD 1.8K (USD 1.4K) ↑4%

Hong Kong HKD 27K (USD 3.4K) ↑0%

France EUR 1.8K (USD 2.1K) ↓-4%

South Africa ZAR 40.4K (USD 3.3K) ↓-7%

AVERAGE ↑+2.5%

Affluent Millennials most likely to increase their spending on luxury goods this year can be found in Australia and Germany

SOURCE: 1. BBC Affluent Millennials Oct 2017 BASE: (n=2,189) 16-34’s in the Top 25% by HH income for their market who have purchased a luxury product in the past 12 months. ↑↓% = percentage increase/decrease when compared to claimed spend in previous 12 months. (USD) = approximate conversion to USD currency.

46.5 40.2 38.8

30 25.4 24.7

35.2

26.8 29.3

17.9 18.7 15.3

Luxury brands are the highest

quality, and I like to have the

best

Luxury brands make me feel good

about myself

I like to have the best-regarded

products available

Luxury brands are a measure of

success and achievement

I like to be looked well upon by

my peers

Luxury brands define who I am

and what I represent

AFFLUENT MILLENNIALS

NON-AFFLUENT MILLENNIALS

Q: ‘Why do you buy luxury products? Please select all that apply’ (%)

Having the best is important for all Millennials, regardless of affluence.

SOURCE: 1. BBC Affluent Millennials Oct 2017 BASE: (n=2,189) 16-34’s in the Top 25% by HH income for their market who have purchased a luxury product in the past 12 months.

4. All Millennials who buy luxury products are mainly motivated by owning the highest quality, and having the ‘best’ product available…

They skew heavily on the link between luxury brands and achievement, status and self actualization.

Index % Diff to Non-

Affluent Millennials Affluent Millennials

4. …however Affluent Millennials are much more engaged with the social status implications of luxury ownership

#1 ‘Luxury brands are a measure of success and achievement’ i=172 ↑68%

#2 ‘Luxury brands define who I am and what I represent’ i=168 ↑61%

#3 ‘Luxury brands make me feel good about myself’ i=161 ↑50%


Top 3 reasons for buying luxury goods amongst Affluent Millennials by index [i] = Index (100 = All Millennials)

5. Affluent Millennials consider quality materials, design and craftsmanship as the most important features of luxury brands…

Q: ‘When it comes to choosing and purchasing luxury goods, how important to you are the following?’ (% = ‘Very Important’)

SOURCE: 1. BBC Affluent Millennials Oct 2017 BASE: (n=2,189) 16-34’s in the Top 25% by HH income for their market who have purchased a luxury product in the past 12 months. ↑ X% = Percentage uplift between Affluent & Non-Affluent Millennials

#1 ‘The quality of the materials used’ #2 ‘The design and craftsmanship’

46% 33%

43% 31%

AFFLUENT MILLENNIALS NON-AFFLUENT MILLENNIALS % DIFFERENCE

39% 42%

5. …however they are also much more likely to look for brands that have a conscience and represent their values

SOURCE: 1. BBC Affluent Millennials Oct 2017 BASE: (n=2,189) 16-34’s in the Top 25% by HH income for their market who have purchased a luxury product in the past 12 months. [i] = Index (100 = All Millennials)

Mindfulness is the new Luxury. Luxury brands that embody a compassionate and sustainable culture to their core can become emblems for Affluent Millennials.

Affluent Millennials index

‘The country in which the product is manufactured’ i=195

‘That the brand or company reflects my values’ i=184

‘The use of sustainable materials and practices’ i=163

‘Very important’ considerations when choosing luxury goods amongst Affluent Millennials [i] = Index (100 = All Millennials)

6. Affluent Millennials are less invested in the heritage of a luxury brand, and more interested in the experience it can offer them as an owner

AFFLUENT MILLENNIALS INDEX

Q: ‘When it comes to choosing and purchasing luxury goods, how important to you are the following?’ ([i] = ‘Important + Very Important’)


#1 ‘Access to a like-minded community of owners of the product’

#1 ‘The established

history of the company’

#1 ‘Important’ considerations when choosing luxury goods, by index [index: 100 = All Millennials]

NON-AFFLUENT MILLENNIALS INDEX 100 200 124 149 200

Q: ‘When it comes to luxury goods, which of the following do you find influential in your personal preference for luxury brands? #1 = ‘Brands that have a specific personality or identity’ [All Millennials: #1 ranking]

Despite all this, the most

influential factor for all

Millennials in personal

preference for luxury brands is a

DISTINCT PERSONALITY

Personality is important. There is a clear benefit to cultivating and messaging a strong brand personality that embodies responsible practices as a form of effective brand identity marketing.

7. …and peer approval plays a bigger role in luxury brand preference amongst Affluent Millennials


Most influential in personal preference for luxury goods brands (%)

1. ‘Brands that have a specific personality or identity’ (40%)

2. ‘What my friends are wearing or talking about’ (35%)

Affluent Millennials Non-Affluent Millennials

1. ‘Brands that have a specific personality or identity’ (39%)

2. ‘Brands that are active on social media and engage with their customers’ (28%)

Affluent Millennials listen to their friends more than they listen to brand comms. Creating a sense of peer validation and consensus is important in influencing their preference for luxury brands.

8. Success means something different to this generation. Life balance and freedom were more important markers of success than career stability


Success is having the means to live a healthy and balanced life’

‘Success means the freedom to discover and experience what I like’

‘Success is having the means to make smarter choices about what I buy and my impact on the planet’

‘Success means a long and stable career’

44.3

39

37.1

35.9

Top definitions of success amongst Affluent Millennials (% agree)

This has important implications for luxury brands, in aligning with new perceptions of success

#1

#2

#3

#4


116 121

144

92.2

79 81

Millennials index = 100

‘Success is having the means to live a healthy and balanced life’

‘Success means the freedom to discover and experience what I like’

‘Success is having the means to make smarter choices about what I buy and my impact on the

planet’

Top definitions of success amongst all Millennials (index)

8. …and while we might equate these sentiments to all Millennials, they are more keenly felt by Affluent Millennials.



54.8 50

27

47.6 49.1

38.2

20.2

55.2

The brand's official store The brand's website The brand's official app A department store

Where Millennials go to purchase luxury products (%)

In contrast to non-Affluent millennials, they want to purchase directly from within the brand environment, whether online or in brick and mortar stores



9. Affluent millennial purchasers want direct relationships with luxury brands


Advertising formats influential in purchasing of luxury goods (%)

In comparison to non-affluent millennials, they particularly skew towards sponsored content and television advertising



10. Affluent millennials are highly responsive to luxury product advertising

31.6 31.2 30.5 30.4

20.5 19

32.7

23.9

28.4

23.6

13.3 17.1

Online Television Social Media Magazines Sponsored DigitalContent

Billboards


31%

54%

Top advertising strategies most influential in winning over loyalty (%)

Desire for stories about sustainability and worker’s rights was 24% higher

11. Affluent Millennials are looking for advertising strategies that emphasize craftsmanship and values over heritage


54.7

49

37 38.5

45.1 46.9

29.8

40.2

Showing the materials and

craftsmanship of the product

Showing the values of the

company

Showing the steps the company

takes to protect its workers and

the environment

Showing the history and

heritage of the brand

24%

12. Affluent Millennials skew towards branded content and celebrity endorsement whereas non-affluent Millennials skew towards heritage

AFFLUENT MILLENNIALS INDEX

Q: ‘When it comes to choosing and purchasing luxury goods, how important to you are the following?’ ([i] = ‘Important + Very Important’)


#1 ‘Celebrity endorsement’

#1 ‘History and

heritage of the brand’

#1 Top advertising strategies, by index

NON-AFFLUENT MILLENNIALS INDEX 100 200 200 114 149

#2 ‘Interesting

content’

132

[index: 100 = All Millennials]

Affluent Millennials love luxury brands: • They are more likely to have purchased luxury products recently than other generations. • They are twice as likely to purchase luxury products than their non-affluent counterparts. The connection between Luxury brands and Success has changed: • Luxury brands aren’t markers for stages of success in life, as for previous generations. • They are communicators of values and lifestyle now. • What the brand stands for is as important as how it is made. • The experience the brand offers is an important as the product itself. The reasons they buy luxury brands is the same, but with a twist: • Quality and craftsmanship are still number 1, as with traditional perceptions. • However they buy these brands to communicate their personal values to others, which increasingly includes mindful and sustainable

practices. • For Affluent Millennials, the benefit of affluence is the ability to make responsible buying choices. They are responsive to advertising: • They are influenced by TV, digital, and branded content. • They are looking for interesting, original content, and prefer emphasis on craftsmanship over heritage. • They are looking for brands that cultivate a particular personality, and ones that can weave a message of sustainable, responsible

practices will get their attention.

What have we learned?

APPENDIX

General statements on luxury buyers and the BBC audience

Viewers of BBC World News and BBC.com are luxury buyers

In Europe: • BBC consumers have on average EUD 230K in liquid assets • BBC reaches more than half of those that:

• Own designer clothing worth EUD 2K+ • Own jewellery worth EUD 3K+

In the US: • 1 in 5 BBC World News viewers have a personal income of USD 200K+ • BBC reaches 1 in 3 of those that:

• Own a piece of jewellery worth USD 10K+ • Own a handbag worth USD 5K+ • Almost half of BBC.com users claim to be willing to pay more for luxury

In Asia-Pacific: • BBC World News viewers are 39% more likely to be millionaires than the affluent average • BBC reaches 1 in 3 of those that:

• Own luxury footwear worth USD 1K+ • Own a luxury watch worth USD 1K+

BBC World News and BBC.com are the home of Affluent Millennials across Europe: • BBC World News and BBC.com reach more Affluent Millennials in Europe than any other international news

provider* (38% reach) • The average Affluent Millennial BBC consumer has €230K in liquid assets

SOURCES: Europe: IPSOS Affluent Europe, 2017, USA: IPSOS Affluent USA, Fall 2017, APAC: IPSOS Affluent APAC, Q3-Q4 2016 *Cross platform competitive set: BBC, CNN, euronews, CNBC, Bloomberg, WSJ, NYT, Economist, FT

CONTACT

Dr. Hamish McPharlin

Head of Insight

BBC Global News

[email protected]

Documents

THE AM PANEL€¦ · Affluent Millennials luxury brands study The following study was conducted in October 2017. The study explored the topic of luxury brands amongst Millennials