Millennials,
silver and even rainbow masks. “Masks used to be a teeny category but they are very visual,” she says. “You can display your face [on Instagram] and show that you know about lifestyle, that you take care of yourself.”
Technology has not eliminated a millennial desire for community experience. Shared workspaces are expanding — the co-working company WeWork was valued at $ 20 billion last year — members’ clubs such as Soho House are growing and festivals have proliferated. Live music alone had global revenues of $ 26 billion in 2016, according to PwC. “I laugh about the terms community and experience, but they are exactly what we provide,” says Nick Jones, founder of Soho House.
BIG SPENDERS IN ASIA
Asia’s millennials, the biggest generation of all, share many attributes with those in the west, but not their insecurity. They are confident of living better lives than their parents, particularly in China, where baby boomers lived through Maoism and the cultural revolution of the late 1960s and 1970s. Even in south-east Asian “tiger” economies that achieved rapid growth, families often saved all that they could.
Millennials in China, many of whom are single children, behave quite differently. “They are very optimistic about the future and they are willing to spend money,” says Jessie Qian, KPMG’s head of consumer markets in China. McKinsey, the consultancy, describes young Chinese adults as “confident, independent minded, and determined to display it through consumption.”
It is having a profound effect on global patterns of consumption, with more to come. Emerging and developing economies are home to 86% of millennials, and the World Bank estimates that Chinese millennials’ income will overtake that in the US by 2035. The luxury industry has tilted towards Asia, where prestige brands are seen as guarantees of quality. A third of Chinese millennials said in one survey that they were very likely to buy a Swiss watch.
Like others, the luxury industry is having to adjust to what these consumers want. It was once tightly controlled, with seasonal fashion shows to unveil designs that were then pushed through stores. Now, social media influencers such as Chiara Ferragni, an Italian fashion maven with 13 million Instagram followers, set the trends and the pace has quickened. “They need more regular product, more drops, something new on Instagram,” says Helen Brand, UBS European luxury analyst.
The surprise is the degree to which Asia’s luxury consumers have been joined by a segment of millennials in the west. “A few years ago, millennials were seen as young people who could not afford luxury,” says Ms. Brand. The bank estimates that they account for 50% of Gucci’s sales and 65% of Yves Saint Laurent’s. It is a taste of millennials’ buying power — their collective annual income will exceed $4 trillion by 2030, according to the World Bank.
This also reflects the divide in fortunes among millennials in the US and Europe, not just between high and low earners but between those born to asset- rich baby boomers and those lacking familial wealth. Accenture estimates there will be a transfer of at least $ 30 trillion in wealth from US baby boomers to millennials during the next three decades. The move has started with parental loans to young adults to buy homes, and will continue through death and inheritance.
Other millennials are out of luck, along with the institutions that flourished in the baby boom era and are being disrupted. Ms. Kieran of WPP has little sympathy for the consumer giants. “We can’t win on anything else, so if we rattle the cage of corporations on sustainability, that’s good.”
Hers is the voice of a generation that now wields greater power than even some of its members realize. The companies that cannot meet their demands are in trouble.