- Rich millennials are giving the luxury world a facelift.
- Like other millennials, they spend on experiences— but they're opting to pay for VIP treatments and customization.
- In luxury fashion, rich millennials are reinventing the meaning of expensive sneakers and streetwear.
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Rich millennials' spending habits are turning the luxury sector on its head.
Like the rest of their generation, rich millennials prefer to spend on experiences — but unlike the rest of their generation, they pay extra to heighten these experiences with VIP treatments and customization.
Rich millennials are also creating new trends and status symbols, namely expensive sneakers and streetwear, the latter of which has become entwined with luxury fashion. This is largely due to the role of social media — as more millennials take to Instagram, brands and fashion magazines are losing some of their clout to influencers.
That's not to mention millennials' preference for the share economy, which has trickled into the luxury world. Rental services like Rent the Runway have made luxury goods more accessible to others.
Here are seven ways rich millennials are redefining luxury.
SEE ALSO: 5 things rich millennials do differently with their money than the rest of their generation
DON'T MISS: 7 ways rich millennials spend and display their money differently than rich baby boomers
They spend extra on VIP experiences.
Like the rest of their generation, rich millennials prefer to spend on experiences instead of things. What sets them apart is their willingness to pay more for heightened comfort or service during these experiences to match their lifestyles, wrote Larissa Faw in a post for Forbes.
"For instance, millennials, regardless of socioeconomic status, attend the music festival Bonnaroo, but while non-affluent guests stay in basic tents and use communal showers, affluent Millennials pay more for the VIP experience with a gourmet private chef and golf-cart chauffeur service," she wrote, adding that many festivals and concerts have developed VIP programs for this reason.
She added: "Likewise, millennials may party at the same nightclub, but only the affluent are escorted past the velvet rope to a separate (often elevated) section."
They seek exclusivity and customization in their experiences.
Affluent millennials also prefer to customize their experiences — an added bonus they're willing to spend extra money on. As the elite shift their focus away from goods, "they want personalized experiences that are either inherently unique or specifically tailored to them,"Business Insider's Lina Batarags wrote.
This is especially true for the affluent millennial traveler, who seeks luxury hotels that offer personalized amenities and attention like cocktail butlers mixing drinks in your room or drink trolleys in the hallways, Batarags reported.
According to Deanna Ting of Skift, luxury hoteliers are using customization to win them over.
"Personalization is what they want," Jenni Benzaquen, vice president of luxury brands in Europe for Marriott International, told Ting. "Luxury used to be one thing to one person but it's no longer about white gloves and white tablecloths. There's no more formality in luxury and hotels need to understand our guests. They want what's unforgettable and unique, and they have a thirst for the unknown and they are going to markets where their friends haven’t been before."
They choose brands based on their mission and values.
But heightened experiences aren't the end all, be all. Instead of replacing the role of brands in wealthy people's lives outright, experiences are augmenting the significance of and consideration that goes into buying a particular brand, Batarags reported.
"Younger generations are less likely to be staunch loyalists to a single brand when compared to their parents and grandparents," Mike Phillips, Wealth-X's vice president of marketing and communications, told Batarags. "They're more likely to try something new if it speaks to their personal values and passions."
He continued: "More and more, the wealthy are evaluating a brand in terms of: What mission does this brand represent? How does it contribute to the greater good ... If I choose to purchase this product, what does that say about me and my values?"
That kind of awareness extends beyond just products, too.
Entire industries are developing or adjusting services to cater to this customer interest, Batarags wrote. Consider wellness, which is increasingly regarded as a modern embodiment of luxury. Accordingly, an array of spas and studios offering treatments like cryofacials, weeklong retreats, and vitamin IV drips are delivering those experiences.
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