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Millennials’ spending has caused a surge in the global sales of luxury goods, according to a report.
Multinational consultancy Bain & Company has reported that the luxury market, which is comprised of goods and experiences, has increased from $289 billion last year to $1.4 trillion this year. Around 85% of this growth is attributed to millennials, or those born in the ’80s until the mid-’90s.
However, the consultancy revealed that millennials are not that keen on purchasing traditional luxury goods, or material things. This market segment is more likely to indulge in luxury experiences, such as cruises, and “experiencing goods”, such as food and beverage.
On a similar note, Deloitte [de-LOYT], another international consultancy, also looked into the spending habits of millennials. It found that millennials spend on things to please themselves, rather than to show off to others. These consumers also consult different sources such as magazines, blogs, and videos before making a purchase.
Because of the challenge of engaging millennials in buying traditional luxury items, fashion houses have found ways to woo them. These businesses are now banking on social media and celebrity endorsers to communicate with millennials.
In addition, they have shifted their style from upscale designs to streetwear, such as denims, T-shirts, and rubber sliders with fun designs. According to Federica Levato, a partner at Bain & Company, streetwear is a large-scale trend that cuts across generations.
Bain & Company predicts that the streetwear sector will continue to experience a five-percent growth until 2020.