As the luxury industry faces a slowdown, Kantar—in partnership with Altiant—conducted an exclusive study to identify the purchasing intentions, expectations, and motivations of "Affluents" under the age of 35* in France, the United States, China and the United Arab Emirates. Françoise Hernaez, Luxury Consulting Director at Kantar Insights, shares key learnings from the report and unveils areas to mine for luxury houses.
What are the purchasing intentions of young Affluents in luxury?
Françoise Hernaez: On average, 36% of those under 35 say they intend to buy more luxury this year, compared to 29% for those over 35. There are categories in which they are already investing—fashion and leather goods, notably—but what surprised us most is their high level of investment in ‘sensory’ categories, such as spas, luxury hotels, and gastronomy. This is quite unusual for consumers under the age of 35.
In which countries are young high-income individuals most inclined to make luxury purchases?
There are many nuances at the country level. Young Chinese consumers are very reserved, except for in the cruise segment, where they outperform: 50% want to spend more on cruises. In contrast, like China a few years ago, the UAE is 10 to 20 percentage points above the average. In the US and France, the preferences are clearer, with peaks in fashion and leather goods among young Americans, and in gastronomy and fashion among the French.
What are their motivations?
Again, there is great diversity. We see a continuity in the UAE, where young people advocate for trendy, sophisticated luxury; and in France, where they are attached to discreet luxury, craftsmanship, and an ethical dimension.
However, in the US, those under 35 say they prefer more sophisticated luxury. This is not common in this country and is diametrically opposed to those over 35, who favor discreet luxury. The second disruption concerns ethical issues associated with luxury, where Americans are not usually the champions. Yet, 69% of those under 35 now consider this a criterion for choice. For them, it contributes to brand selection.
In China, purchases for self-expression and affirmation are only at 7%, whereas they are generally stronger among those under 35. Young Chinese consumers are less focused on status and more on discreet luxury.
At a time when the industry is showing a decline in China, what is the relationship of wealthy young generations with luxury?
Across all countries, 42% of young people say that luxury is at the heart of their daily lives, while in China this figure rises to 52%—despite being more financially constrained and under pressure than in the past. This shows that there is no luxury fatigue. They are, in fact, the most curious about brands: 68% say they research, connect to content, and interact with luxury brands at least once a week. They do this most on the brands’ websites, and not necessarily always on social media.
Are these international brands or increasingly local ones?
For wealthy young Chinese, there are no predominant local brands. The same is true in the US: despite an underlying criticism of European brands, there is no preference for American brands.
The study highlights a trend towards "non-linear" luxury. What do you mean by this?
After exploring concepts of reboot, reinvention, and rebirth [in previous studies], this year we chose the concept of non-linearity. We define this as a kind of freedom—in relation to the purchasing journey, motivations...—with an intense, joyful, and somewhat informal experiential and sensory aspect.
How are purchasing journeys evolving?
Young consumers are turning away from traditional channels in favor of "hacked" journeys: they allow themselves to buy dupes (6%), to purchase second-hand goods (28%), rent rather than acquire (20%), or collectively purchase an item that they will share (17%)—what we call co-luxing, with the highest levels found in the UAE. There is a desacralization in the relationship with ownership, and a redefinition of value.
Do these new usages show that the perception of value for money is shifting?
In response to our open-ended questions, there are very few criticisms regarding brand quality. I think there is indeed a deep and predictive phenomenon. It’s interesting to note that consumers who have means resort to these practices [dupes, co-luxing…] because they believe that the relationship with value needs to be renewed. We have fewer insights into criticism of luxury and greed than into a desire for innovation, inventiveness, and new ways of doing things. Some people say that buying a luxury item with two friends seals their friendship... It's quite a different relationship with the product.
84% of respondents prefer to shop in-store. Does this signal a disaffection for e-commerce?
The [in-store experience] is somewhat the opposite of the streaming culture where one can repeat, relive things, etc. When you are in a store, it’s here and now, and that is appreciated. This doesn’t mean that young people don’t also buy online, but for them, the best place to shop is in a physical store. There are doubts about the market, but there are still many opportunities through renewal... And the renewal of retail may be what will save the desire for luxury.
Does packaging also play a role?
Young people have a need for surprise, innovation, and discovery. So, of course, design and packaging are linked. We didn’t ask the question directly, but in the narratives of respondents’ best luxury experiences, packaging is widely mentioned and is associated mainly with beauty and fashion. It contributes to the quality of the experience. In the open-ended question about their favorite brands, it is also widely cited, particularly when it comes to initiatives on sustainable packaging.
In this context, what is the challenge for brands and how should they build their strategy?
It’s complicated. We have identified three pathways. The first concerns the need for sensory experiences. Several houses are already engaged in cross-category approaches: they are thinking about their overall experience by creating beauty ranges and wellness spaces, investing in hospitality... This isn’t new, but there is still potential, such as merging with the world of art and entertainment.
The second pathway is more complex as it concerns the diversity of inspiration and the conversational aspect with brands. We mention best practices, such as Loewe, which launched a small bag resembling a tomato following a conversation on X that referred to a tomato as looking like a "Loewe design." This shows that brands are listening to users online and that there is mutual inspiration.
The purchasing journey is more complicated for brands because they are moving away from their everyday business to a certain degree. It is a subject of strategic reflection on the product’s life cycle, which is no longer just a new product that is bought and used. It’s not their business to engage in re-commerce, but it’s an issue they are all seriously looking into.
*Quantitative study conducted by Kantar in partnership with Altiant via the proprietary panel LuxuryOpinions®, among 600 Affluents & HNWI (high net worth individuals) in France, United States, China, United Arab Emirates. 50% of respondents are under 35 years old and have an average net worth of $2.6m.
Source: https://www.formesdeluxe.com/article/francoise-hernaez-kantar-insights-young-affluents-need-surprise-innovation-and-discovery.64922