According to the Bain & Company study, the overall luxury market, encompassing both luxury goods and experiences, grew by 4 percent at constant exchange rates to an estimated 1.3 trillion Euros globally in 2019. The growth is coming largely from Asia and from younger generations.
It is predicted that while millennials accounted for 35 percent of the luxury market in 2019, by 2025, that will rise to 45 percent. The members of Generation Z, however, are said to reshape the industry as per the study. By 2035, Gen Zers could comprise up to 40 percent of luxury buyers.
The study author Claudia D’Arpizio said, “Gen Z customers are the new frontiers of tomorrow’s luxury market — and they already represent a growing portion of luxury consumption in Asia, luxury brands will need to connect with customers in an increasingly personal way. The products, experiences, and ideas that they deliver will need to flow together to appeal to the emotions of younger customers, who are diverse, global, and opinionated, and also more pragmatic than millennials.”
She predicted experiential travel will progressively evolve into “achievement travel” for Gen Z, with an emphasis on travel experiences that allow them to align with the community. Those experiences will need to be designed to be more sensitive to ethical and environmental standards, as Generation Z “will be more committed to social responsibility than prior generations.” Moreover, the relevance of social responsibility is aligning among nationalities, with Asia catching up with the West.