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A new research shows that millennials are the key to success for the luxury goods sector, demonstrating that this generation is far from regarding leather products as old fashioned.
A recent study conducted by UBS has shown that young people in Asia and in the U.S. market, in particular, are emerging as the next big market.
“There are some signs from our survey that the U.S. millennials are perhaps more positive on European luxury, a bit more brand loyal and spend a bit more than older consumers,” said Helen Brand, Luxury Goods Analyst at UBS London. “Perhaps the luxury brands should be targeting the U.S. millennial consumer, as opposed to the older generation,” she added.
According to the research, if American consumers have, traditionally, held back on extravagant retail purchases compared with other developed markets, this is about to change as U.S millennials are more open to spending than their 35+ counterparts, and have a more optimistic outlook for their future.
On the other hand, the Chinese millennials feel less optimistic about personal finance and are less loyal to their preferred brand, meaning that luxury-goods companies may have to work harder to win over youngsters in China, the UBS report said.
As millennials become the dominant group in both the U.S. and China, the key for luxury goods makers is to step up their online and digital marketing. Companies such as Burberry, Gucci and Louis Vuitton which have a strong online presence are presenting the right brand image and are gaining the market, according to the report.
After a difficult 2015, Goldman Sachs predicts a 20% share price jump in the European luxury-goods sector in 2016.