The 'Millennials’ Part 2 - insights Into What’s Shaping their Buying Habits

Angelka

By Chris Benham, co-founder and director of Inspired Jewellery Ltd.

Creating a luxury brand amid the information overload on the internet is increasingly becoming a challenge. As jewelry companies look to position themselves for the next generation of purchasers, I took the opportunity to two professionals in their early 20’s (the “Millennial Generation”) to share their views on what’s shaping their buying habits and how they are filtering through the holiday sale season madness.

In part one we heard from Hunter. Now we meet Angelka. They both provide valuable views into what’s important to them and insights into what investment jewelry companies need to make to win their trust and future business.

Angelka:

I think brands need to almost redefine themselves when marketing to millennials. With so much going on in our fast-paced lives, it’s extremely difficult to gain my attention if you’re not doing something interesting and memorable. Price is less of a determining factor, at least in the first instance to gain that attention. Brands and products need to connect with my personal values and lifestyle first and then offer incentives for me to buy their products and remain loyal.

Sustainability may seem like a buzz word to some people, but it is a value that is only going to grow in importance. Brands like The Earnest Workshop build their company ethos around sustainability and creating products that are of high quality, stand the test of time, yet have minimal impact on the environment. It is a company that I only happened to have a chance encounter with, but one that will stay in my mind, and I now enjoy following their progress to see what new pieces of furniture they are making.

Quality is another deciding factor - but genuine quality. Trilogy skincare is an example of a product which, thanks to word of mouth, I know to be of high quality - you can’t get more genuine than the recommendations of trusted peers; therefore I don’t buy anything else, even though there are cheaper alternatives. Add to that their simplistic, natural, organic and sustainable focus, and you’ve got a brand that I love.

The sports and fitness clothing store Lululemon is another example of a brand creating a buzz by aligning themselves with the millennial lifestyle. They advocate a healthy, free-spirited way of living, focusing on making the most of experiences and living in the moment. They offer free yoga and barre classes. Their gear is still pretty expensive so I’m yet to buy anything - but it was top of my Christmas wish list, so they’re doing all the right things.

For me personally, working in marketing, I feed off brands that are doing clever things in the marketing space. Kiwi chocolate brand Whittakers, and Australian brand Mimco are always active on social media, engaging with their customers and above all, leading the trends. That’s another reality - especially for females my age - brands need to be perceived as style and trend leaders, not followers.

I feel that the discount madness is overwhelming and it’s causing me to not buy at all. Each day I receive up to 20 promotional emails - most of them I delete, and I know I should unsubscribe, especially from the daily deal website emails. Even daily deal sites that are focused on high-end offers from the likes of fashion brands don’t get much attention because the background and brand stories are missing. Interestingly, the experience-related deals such as dining out, holidays, flights and accommodation still appeal. We do like to get deals where it matters.

With technology, shopping has become a well-thought out process. Extensive research is carried out for most purchases to narrow down my choice to only a few brands or stores. While price is still a factor, if I didn’t do this research beforehand based on what brands and products appeal to me personally, I’d go out and feel lost amongst all the discounts and promotions going on at the same time. Shopping in general is being replaced by other activities - there is definitely a lifestyle shift amongst people my age to valuing quality over quantity and seeking leisure time activities other than shopping at malls and big retailers.

So while price can still be a determining factor in my daily purchases, brands that want my attention and loyalty need to reach me on a different level. As my disposable income increases, it will be those brands that are top of mind and that I ultimately purchase from, not the brands that are promoting 40% off in tacky flashing lights.

Jewelry News Network guest columnist, Chris Benham, is co-founder and director of Inspired Jewellery Ltd., Wellington, New Zealand, a global creative studio for specialist jewelry design. 

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Luxury Consumption Index Stalls, Responding to Mixed Market Signals

Unity Marketing's Luxury Consumption Index stalled at 78.3 points in July 2010 as affluent consumers display uncertainty about prospects for the economy in the next three months. The survey’s founder says this apparent lull in the luxury economy “is reason for concern.”

Significantly more luxury consumers (36 percent) say the country as a whole is worse off now as compared with three months ago—a 5 percent rise, according to the survey of 1,349 luxury consumers was conducted July 3-8, 2010 (Average income $306,700 and net worth $15.2 million; 44.8 years; 45 percent male and 55 percent female).

Value positioning is key for luxury success through third and fourth quarters 2010, says Pam Danziger, president of Unity Marketing, a marketing consulting firm.

“Without a doubt the luxury consumer market is in a much better place today than it was a year or so ago, but the latest survey warns marketers not to ease up or be over-confident that the recession's effect on the luxury market are over,” Danziger said. “Nearly three out of four luxury consumers surveyed believe that the recession continues, which in turn impacts spending on luxury goods and services. Marketers are advised to continue to position luxury as a value proposition, by keeping luxury connotations and image up front in advertising, packaging and service, but communicating in a very subtle, almost one-on-one way, affordable pricing.”

Survey findings in the quarterly survey, include:

* Spending on luxury rose a modest 7.7 percent quarter-to-quarter. Luxury consumer spending, however, rose dramatically year-over-year, up nearly 60 percent from $19,952 on average to $31,665. Unity expects the same trends toward modest quarter-to-quarter spending increases to continue throughout 2010.

* Categories that attracted higher levels of spending among luxury consumers in the second quarter included luxury beauty and cosmetics, high-end cooking tools, men’s luxury clothing and apparel, men’s luxury fashion accessories, home electronics and travel.

* Aspirational affluents (incomes $100,000-$249,999) started to trade up once again to luxury, according to the survey. They increased luxury spending by nearly 30 percent in the quarter, their highest levels of spending seen throughout 2009. High-end clothing, fashion accessories, personal electronics, wine and spirits, and beauty products were the most popular items.

The pace of growth in luxury consumer spending will remain modest over the next two quarters, according to Tom Bodenberg, Unity Marketing's chief consumer economist.

“Affluents still have a lot of uncertainty about the economy which dictates caution when it comes to spending on luxuries,” he said. “We don't expect to see moderation on this cautious attitude until the beginning of 2011.”

Final Results: Holiday Online Spending Hits a Record $37.2 billion

Retail e-commerce spending for the November – December 2011 holiday season (November 1 - December 31) increased 15 percent, year-over-year, to $37.2 billion, an all-time record for the season, according to comScore, a company that measures digital data and provides digital business analytics.

Ten individual spending days surpassed $1 billion in sales, as compared to just one day reaching that mark in 2010, the Reston, Va.-based company said. Cyber Monday (the Monday after Thanksgiving Day, November 28) ranked as the heaviest online spending day of the year at $1.25 billion, the second consecutive year it has ranked first for the season. The second heaviest spending day was Monday, December 5 at $1.17 billion, followed by Monday, December 12 at $1.13 billion. Tuesday, November 29 ($1.11 billion) and Tuesday, December 6 ($1.10 billion).

With the relative newness and growing acceptance of digital e-commerce, it’s common for online sales to exceed the prior year’s results. However, the 2011 holiday season was exceptional by any standard.

“With brick-and-mortar holiday retail estimated to have grown about 4 percent this year, it’s clear that e-commerce continues to gain market share from traditional retail due to the attractiveness of the Internet’s convenience and lower prices,” said Gian Fulgoni, comScore chairman. “Consumers were especially attracted to the deals and discounts available through digital channels—particularly free shipping, which occurred on well over half of transactions this season. Despite their continuing price sensitivity, consumers felt a bit more comfortable opening up their wallets this year, although this appears to have occurred as a result of a decline in the savings rate. Nonetheless, it’s clear that, at least on the basis of top line growth, this was a Merry Christmas for many online retailers. What will remain unknown until retailers report their financial year end results is whether the aggressive pricing and free shipping offers came at the cost of lower margins.”