When he’s not jet-setting to Tahiti or hobnobbing with his best friend Tom Cruise*, Sean O’Brien is just a regular guy. He’s 29, single, never pays full price when shopping online and likes to snowboard with friends in Tahoe.
It’s the dichotomy of today’s affluent millennial: they are accustomed to consuming luxury items, but they don’t like paying full price and aren’t motivated by the status of those goods. They rely on social media for showing off their lifestyles and to obtain incentives from their favorite labels, but they will reject brands that don’t operate within certain social parameters.
Today’s 20-something professionals are chasing ideals far more intangible than marriage, diapers and a Roseville-sized mommy mobile.
“Millennials, with their additional income, look to spend it in terms of a social life: going out to dinner, travelling and more of an active lifestyle,” says O’Brien, a local financial adviser and chair of Metro Edge.
For this generation, it’s not a goal to own a Rolex or a pair of Louboutins. As the first generation in history largely raised by wealthy parents, they grew up accustomed to name brands. They like to consume these brands, but they’re not motivated to buy them. According to a 2012 survey by American Express Publishing and Harrison Group, 34 percent of affluent millennials age 18 to 33 have been wealthy throughout their lifetime, compared to less than 10 percent of other generations.
Past generations gained wealth during their careers, so a Luis Vuitton handbag was a status symbol of hard work. Emilie Cameron, senior account executive for Lucas Public Affairs, says today’s status means having the time to fly to Ibiza.
“For my generation, it’s more about being there — or saying you were — than anything else,” says Cameron, age 31. “Competition is no longer about who has what purse. That’s easy to obtain. Time has additional value. Our generation wants work/life balance. Tangible things represent the work we grew up seeing in our parents, but experiences represent the life. Time is something our parents generally didn’t have.”
This doesn’t mean that a generation of 20-somethings are forgoing luxury items. By 2020, millennials are predicted to be the largest generational segment of luxury consumers, according to an October report by Unity Marketing.
Thirty-four percent of affluent millennials age 18 to 33 have been wealthy throughout their lifetime, compared to less than 10 percent of other generations.
American Express Publishing and Harrison Group
But marketing to them is tricky. They’re skeptical of high-priced items that don’t demonstrate a higher-quality experience. It’s not just about the label. They want brands that understand their priorities, according to Unity.
In a recent survey by the Luxury Institute, 75 percent of affluent millennials said they are looking for brands that are pro-social, and 85 percent said they are looking for brands with a reputation for design.
O’Brien says he places importance on buying high-end goods locally.
“I am a sucker for a custom Ryan Douglas or Steve Benson suit,” says O’Brien, referring to S. Benson & Co. and R. Douglas Custom Clothier.
Benson, owner of the East Sacramento shop, has been crafting custom suits for generations of Sacramentans. He sold O’Brien’s father his wedding suit in the early ’80s.
“I see a lot more customers in their late-20s to early-30s returning and buying quality clothes,” Benson says. “I think they are more conscious of appearance and local quality over quantity.”
Benson estimates about one-third of his clients are around age 30 and under. Most of his clients are by referral. He has a Facebook page but doesn’t use it much.
“Old people and young people do not place much importance on the social media presence of a luxury brand, with some even reacting negatively to a brand’s association with these mass market channels,” according to the Luxury Institute’s Wealth and Luxury Trends, 2012 and Beyond. “Many see Facebook, Twitter and other platforms as strictly social, and they resent the commercialization of social media.”
Still, Cameron follows high-end retailers Tory Burch and Kate Spade because they offer exclusive discounts via social media. “I don’t often follow brands that don’t offer some kind of incentive,” she says.
O’Brien agrees, though the incentives he’s looking for aren’t always monetary. “Personally, I enjoy any of the companies that have a humorous side,” he says. One such brand is Dos Equis, which doesn’t push product on its website but instead engages with consumers through “the most interesting” games, photos, recipes, stories of adventure and contests. The site is witty and plays to the interests of millennials.
Millennials also turn to Facebook, Twitter and Instagram for socializing. It’s the modern way of keeping up with the Joneses, since they’re sharing experiences, not purchases. This is where the pictures and comments are posted to share that trip to Tahiti, photograph with a celeb or diamonds you keep in a purple Crown Royal bag. Don’t believe me? Check out richkidsofinstagram.tumblr.com.
OK, maybe that’s not the norm, but it’s still entertaining.
Cameron says that while her generation is craving experiences and sharing those experiences with friends through social networking, they are not looking for validation.
“We’re more connected than any other generation before us, whether through social media or technology itself, and our relationships with friends have become just as important as those with our families,” she says. “So it’s second nature, whether you’re the affluent millennial or just the friend, to want to include your “family” in memorable experiences, not just show them what you can afford.”
*O’Brien met Tom Cruise at a wedding once. Cruise has no idea they are best friends. And yes, ladies, O’Brien is single. That has been fact-checked.
Call them the face of the new frugal. Erica Rhyne-Christensen and fiancé Bryant Giorgi, both 27, don’t vacation much. They hardly eat out. Until recently, they rented rooms in a group house for $400 a month each instead of getting solo apartments, and they didn’t have TV.
Brian Collins is a 26-year-old director of accounts at Sacramento-based mobile applications marketing firm Appency. He makes what he calls “decent money,” is putting lots of it into a 401(k) and has an eye on his financial future. And, like most people his age, he’s decided that buying a house is not part of the plan.