- Recent statistics suggest that millennials will be spending more in the luxury market.
- Millennials respond to a different brand than previous generations.
- Marketing to millennials requires understanding their motivation to buy luxury.
The YouGov 2016 Affluent Perspective Global Study notes that millennials, as well as the 400,000 wealthiest households in the U.S., will increase their spending by 8 percent and 10 percent respectively during the current year.
According to YouGov, millennials will spend $49 billion overall (retail, entertainment, real estate and so on) this year.
Of course, that does not mean that luxury real estate agents should limit themselves and market only to millennials. Opportunities exist for luxury real estate agents among all affluent groups, including with baby boomers and Generation X.
Recent data indicate, however, that millennials are set to increase their spending. Therefore, luxury real estate agents should keep that in mind. After all, millennials are a different breed who respond to a different brand than their parents.
What luxury real estate agents need to know about millennials
- According to YouGov, 90 percent of millennials are introduced to luxury by the time they reach 37. Compare this statistic to other groups; only 72 percent in Generation X, 61 percent of boomers and 55 percent of matures had a similar initial introduction by that age.
- Fifty-eight percent of younger millennials (ages 18 to 29) and 37 percent of older millennials (ages 30 to 37) claim that another party paid for their first experience with luxury. For example, it could have been a high-end gift, invitation to an upscale event, someone’s opulent home or being asked to join a holiday trip. In 61 percent of these cases, it was the young person’s parents (boomers) who introduced them to luxury. On the other hand, YouGov states that more than 60 percent of Gen Xers and boomers paid themselves for their first adventure into the world of luxury.
- Millennials say price is the main indication of luxury.
- Millennials know the true value of luxury. Luxury real estate agents — never underestimate your millennial clients. They understand about upscale real estate, high-quality workmanship and the luxurious lifestyle itself. Millennials might not have years of experience behind them, but they are not immature consumers.
The study found that millennial spending on travel is expected to increase by 16 percent — the largest rise of any age category.
More travel leads to more knowledge about global properties and expanded interest in real estate opportunities around the world. Therefore, luxury real estate agents should view millennials as extremely knowledgeable and valuable clients.
An extra note: YouGov expects a travel spending increase of at least 8 percent to 12 percent across all groups.
Do not dismiss millennials as a young, inexperienced group; you would be doing a disservice to yourself as an agent who wants to succeed in luxury real estate.
The key to success
Of course, every client deserves the utmost in respect and professionalism as individuals. It does not matter if their “group” (boomers or other) is not predicted to spend much in a specific period.
Statistics change and markets vary, but excellent customer service — to each and every client — never goes off the market.