Wealthy millennials spending on products over experiences: BCG
By Zach James
Boston Consulting Group (BCG) is revealing younger consumer’s luxury preferences.
According to its findings, millennials’ spending on high-end goods vastly differs from their older counterparts in multiple ways. The biggest variance is a desire for products over experiences, bucking the trend the prestige space has embraced in recent months and years.
“As millennials enter their peak spending years, understanding how these consumers think, behave, and spend is crucial for companies – or they’ll risk losing a once-in-a-generation opportunity,” said Jim Brennan, a managing director and senior partner at BCG, in a statement,
The “Worth’s Millennial Mindset Report: How Wealthy Millennials Earn, Invest, and Spend” study was published by New York-based Worth Media Group. For the report, BCG surveyed 2,600 U.S.-based millennial consumers with an annual household income of at least $250,000 and ranging upwards of $1 million; small groups of wealthy Gen Xers and baby boomers were also surveyed to compare attitudes and spending habits.
Visions of success
As millennials grow into their wealth potential, the appearance of being well-off is of great concern in the age of constant connection and social media.
Of those surveyed by BCG, 70 percent expressed “concern for their image and how others perceive them.” On top of this, 54 percent preferred to showcase their wealth and financial achievements, making a leaning towards high-end goods inevitable.
With the group’s wealth growing at an exponential rate, millennials lack time to travel due to heavy workloads and a focus on either their careers or starting a family. Just over half of the survey’s young participants, 54 percent, had spent money on upscale experiences in the past year.
Comparatively, luxury goods garnered a bit more attention, as 63 percent stated they had made a purchase within the sector within the last 12 months. During the same span, 55 percent and 48 percent bought fine jewelry and high-end watches, respectively.
This behavior shakes up the status quo, as prestige experiences have led the way for the industry post-pandemic. With Millennials also determining the future of the real estate market (see story), it is clear the largest generation in the U.S. has an increased pull on the economy and major industries.
Keeping trends consistent, more than two-thirds of respondents have invested in health and wellness products in the past year, with only 42 percent purchasing a vehicle as demand plateaus – which experts recently warned of (see story).
Generational divide
Meanwhile, Gen Xers and baby boomers are on the opposite end of the spectrum, being more likely to spend on travel rather than material things.
In particular, Gen X invests more money in experiences and trips than any other age group (see story), though upwards of 75 percent of baby boomers also purchased luxury hotel stays or other types of getaway expenses.
This behavior, according to BCG, is due to older consumers having more time on their hands as retirement looms, their children start their own families and their golden years commence. Travel remains a massive luxury market (see story), even if younger audiences prefer to show their wealth in more material ways.
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