Millennials are buying luxury goods
A new UBS study on millennial spending reveals that the largest upcoming generation in the workforce still will spend on luxury items.
In the recent Evidence Lab study on European luxury goods, UBS learned that millennials will spend on brand name European luxury items such as expensive purses.
“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 in London.
This is noteworthy for a generation that is known for being strapped with student loans and not being particularly involved in the housing market, a traditional indicator of economic strength for a generation.
Marketwatch reported Brand explaining in her report, “Key going forward is whether the U.S. millennial consumer is more open to luxury spending. Encouraging is that the U.S. millennial consumer tells us that they spend more on luxury than 35+ consumers and feel markedly more optimistic about their personal financial outlook.”
The report also found that spending by US consumers was outpaced by Chinese millennials who spend even more on luxury, often online and through the grey market which can potentially negatively impact brand value.
“Having a strong online presence is important to presenting the right brand image to millennials,” Brand said in the report. “Companies advanced here, such as Burberry but also Gucci and Louis Vuitton, are well placed to win,” Brand noted.
Marketwatch reports Burberry sales are up 13% YTD, Louis Vuitton is up 7%, and Goldman Sachs is forecasting European luxury goods sector sales up 20% for 2016.
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