Luxury?

What is luxury? Is luxury how many square feet you have in your home? Is luxury the number of classic cars that are in your garage? A new generation of consumers is hitting the market with a new idea of what luxury is. The Y Generation is growing into that segment of buyers that businesses need to focus on. For the sake of this article, I'm going to call them the "Y Buyer". The Y Buyer is someone who was born, roughly, between 1978 and 1994. There are about 60 million Y Buyers, which is more than 3 times as many as the X Generation. Y Buyers can also be referred to as the Net Generation, First Digitals, or Digital Natives.

This tech savvy, internet experienced group of consumers creates a set of problems for companies who have relied on brand loyalty. With the introduction of the internet came a new resource for consumers to find information about products and services. Advances in web development, and new social networking sites has allowed consumers to have more discussions about their consumption. Y Buyers now are more focused on the specific product then the company that is producing it. The state of the "luxury brand" is coming to a crossroad. According to the Luxury Institute, "62% of wealthy consumers say that the current state of the economy has changed their view of the luxury industry." It also discusses pricing for these luxury goods, "64% of wealthy consumers believe luxury goods prices are too high relative to the value they deliver." (www.luxuryinstitute.com) The current recession is going to have a huge impact on consumer spending and which products are bought. Y Buyers are going to be more focused on the quality of a product than anything else.

Quality is going to be a keyword that needs to be utilized by businesses in the future. Y Buyers will become a lot more reluctant to buy on credit, which will decrease the number of products that they purchase. This will increase the amount of research time spent to purchase an item. Y Buyers are becoming professional shoppers because of the easy access to information online. This means that companies need to become more transparent with product information. They also need to acknowledge the intelligence of Y Buyers. If companies are able to do this through creative means, then they may be able to create some of that brand loyalty that was so prevalent with the Baby-Boomer Generation.