Millenials were responsible for the disrruption in economy and especially in the luxury industry. This is actually old news, discover the iGen generation: fully connected, less rebellious, more tolerant and clearly unprepared for Adulthood. Yes it is a mess and it is coming for you, luxury brand!
Why Millennials were the gold pot?
Millennials are below 25 years old and some of them have money. They have more than $US200 billion to spend and they contribute to $US500 billion indirectly through influencing their parents (source: US Chamber of Commerce). By 2017, this generation is supposed to outspend the BabyBoomers. They are “hyperly” connected and engage with luxury brands in ways we would not imagine. They are also very demanding and traditional luxury is not enough. They seek very exclusive experiences and products, more than previous generations. Also called generation Y, they are young adults born between 1980 and 2000. so they are between 17 and 37 years old. It is clearly a large age bracket. Brands have been focusing on the older part, 30 to 37 years old because they have finished school, have a job and they are fully independant from their parents. This also mean they have, for some of them a high-revenu and a great interest on brands. The more the luxury industry can anticipate the venue of such a new generation of customers, the better. Not an easy job as luxury brands will still need to talk to us, the old guys.
iGen, a new beast not so wild
iGen are people born between 1995 and 2015. This means they are 22 years old maximum. They grew up with cell phones and do not remember the time before Internet. Most of them had an instagram account before going to high-school. They like iThings like iPhones or iPads but also other words with i like individualism or irreligiosity. They are always connected and their life would not be possible without an internet connection. We also call them Generation Z, Centennials or Post-Millennials. Brand consultant and author, Crispin Reed, posited the term Generation Z in an article for Brand Strategy magazine in February 2007. In the article, titled ‘What Makes ‘Y’ Tick’ he wrote: ‘Will we meet generation Z? This apocalyptic sounding group might signal a new set of young people who take media fragmentation and multitasking to even further lengths. We also tend to say it is a much less rebbelious and “silent” generation. They will spend a lot of time online, interacting in social media, online gaming and blogging. They are not used to traditional media. For them it is all about story-telling and no matter the size of the “screen” or the technology that powers it.
iGen is also the generation realizing that the previous generations have broken the system (ecology, politics, religion, family, communication…). They feel they should not break it more, so they tend to align better with major systems and follow rules by the books. In Japan we call them the Neo-Digital natives. While Millennials communicate by voice and text, iGen utilizes Video and virtual reality.
According to experts, they will be better future employees. With the skills needed to take advantage of advanced technologies, they will be significantly more helpful to the typical company in today’s high tech world. Their valuable characteristics are their acceptance of new ideas and a different conception of freedom from the previous generations. Cooperation will be a great word.
Luxury brands and Generation iGen, a rising story
We tend to believe that iGen tend to become bigger luxury customers than Millennials. Indeed, the report highlights slight differences between millennials and Gen Z: While millennials grant their traffic to discounters over more pricey retailers, which might be due to their experience during the Great Recession, iGen seems perfectly willing to shell out the extra cash for more upscale brands. Of course iGen do not have the sufficient revenue to purchase luxury brands but they are more sensitive to premium brands that the 2 previous generations. The challenge for luxury brands will be to integrate mobile and online into the in-store world as these hyperly-connected customers will navigate from online to offline and back to online. The user-journey for these future customers will have no walls between paid, owned and earned platforms. As their predecessors, 53% of iGen like to go to physical stores no matter if they would also purchase online or not. This means that brands with an integrated retail approach will for sure leverage more attention and sales than the ones leaving each channel separate.
It is important to notice that iGen people were born and raised with internet, therefore they were exposed from a younger age to brands and marketing online techniques. They are great detectors of authenticity and their approach of luxury will definitely be around a plausible lifestyle. Technology and design will be a driving force for brands and we tend to think this generation will be interested in more active and sportive brands or products.
When Louis Vuitton collaborates with Supreme, this is a perfect illustration for an iGen target group.
For the incoming years, luxury brands will need to evolve their user journey model to a more versatile approach and yet keep talking to their “good old customers” who might be under 40 years old anyway. And what about the generation born after 2016, called the Alpha Generation? Well, that will be a story for another time…
Info sourced in Forbes, Time, New York Times, The Luxury Group, Wikipedia and Euromonitor. All content is copyrighted with no reproduction rights available. Images are for illustration purposes only.