In 2014, the standard understanding of a luxury shopper is out the window thanks to the growing number of wealthy millennials. Once defined as the “man or woman who owned a lavish penthouse condo” with a healthy investment portfolio, The Washington Post took a look into the changing times.
“That single definition of the customer is being shattered,” said David Selinger, chief executive of RichRelevance, a retail services company.
Instead, luxury shoppers now include a wider age range, have differing tastes, values and involve “a transformation that is pressuring high-end retailers to recast their brands.” This was a major point raised by Selinger at the National Retail Federation’s Big Show on Sunday (Jan. 11).
“Luxury is about where it was made, how it was made,” said Matthew Woolsey, executive vice president for digital at Barneys New York, said at the panelist group at the NRF event. Millennials are shifting the retail paradigm by looking for quality, craftsmanship and authenticity over brand names.
Selinger said that the luxury shopper in today’s retail world seeks out particular products over brands thanks to easier searching capabilities through smartphones and the growing number of ways to shop online. That has also created a fiercer competition among retailers to compete for that generation’s shopping dollars, he said.
This particular group of wealthy millennials are referred to as a “HENRY, which stands for a person who is a “high-earner not rich yet.” Ken Nisch, chairman of retail design firm JGA, told The Post that their stead cash flow without having wealth accumulated changed their spending habits. For example, more consumers are turning toward the services that allow them to engage in luxury without owning it. He named services such as Rent the Runway and Uber as a car service as examples.
“They are using luxury without owning luxury,” Nisch said. He also said millennials are likely to fall into the “functional luxury” shoppers, which includes products that are more frivolous than functional. Examples of this include Apple products or shopping at Whole Foods. Either way, whatever is driving younger shoppers to spend their money differently, shopping trends and spending habits of young consumers seem to be changing, which means luxury retailers may have to adapt with the trends.