Daily Management Review

Deloitte: New generation of millionaires is more lavish than previous


04/16/2019


Despite the slowdown in economic growth around the world, the luxury market continues to grow. According to Deloitte, revenue of the largest companies in the luxury segment in fiscal 2017 increased by 10.8% to $ 247 billion. Such high rates occurred thanks to the younger millennials and the Z generation, who turned out to be more inclined to spend money than their predecessors.



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pixabay
Companies operating in the luxury segment are beginning to focus on the growing consumer class, the so-called HENRYs (High Earners, Not Rich Yet). Those are people who in the future will become richer and richest, says Deloitte. We are talking about wealthy millennials and representatives of the Z generation. Today, these people earn from $ 100 thousand to $ 200 thousand a year, the average age is 43 years, they understand technologies, prefer online shopping and love big expenses.

According to analysts, these generations are looking for individual and seamless relationships with the brand, both in stores and online. Thus, the largest brands worldwide are investing in the development of artificial intelligence and work with big data.

In the future, new HENRYs should become the richest members of society, so luxury brands start building fruitful and business relationships with them today, focusing on the same values as their customers. Social networks have become one of the key communication channels.

The revenue of the 100 largest companies in the luxury market in 2017 fiscal year amounted to $ 247 billion, and was $ 217 billion a year earlier. Thus, year-on-year growth was 10.8%.

According to Deloitte, new HENRYs are more wasteful than their predecessors: on average, such a family spends about $ 86 thousand on purchases, while the earlier generation - X - spent about $ 67 thousand.

Perhaps it is precisely because of this that the global market for luxury goods continued to grow in 2018, despite the slowdown in global economic growth around the world, including the United States, China, and the EU countries. Experts of the British Consulting Corporation predict the growth of the middle class - more than 50% of all consumers by 2020. Thus, the luxury market will grow with them. The most promising are the markets of countries such as China and India.

Speaking of Europe, the segment of expensive products also continues to grow, but more unevenly. Spain and France, for example, showed a large growth rate, while Germany and Italy, on the contrary, ended 2018 with negative indicators. China, which showed a slowdown in the economy for the first time in 28 years, remains the main consumer of luxury goods both domestically and abroad. Meanwhile, more and more new HENRYs are appearing in India.

source: deloitte.com






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