Essentials vs. Luxury: How Millennials Are Blurring the Lines
Reworking of luxury and essential categorisation by millennials
The millennial generation has witnessed rapid socio-economic changes that have shaped their values, purchasing habits, and desires. One of the significant shifts in their thought process has been the categorisation of luxury and essential items. The transformation of what baby boomers considered luxury and essentials and what millennials think of it is a notable transition. Millennials’ take on luxury has driven numerous societal and economic changes.
Both ‘essentials’ and ‘luxury’ can be considered terms with flexible boundaries. Unlike the previous generations, millennials value experiences, sustainability, and authenticity more than material possessions which have revolutionised the essence of things considered luxury and essentials.
Millennial culture and their view of luxury and essential is formed by many factors, the following five points are the key among them:
- Shift towards experiences over material possessions
The change in priorities has led millennials more towards activities to create memories as opposed to accumulation of luxury items. The increase in the understanding amongst millennials that experiences have a deeper impact on overall happiness than owning material goods has led to this significant shift.
They seek experiential luxuries like travel, adventure, and exploration. However, this perspective on luxury changes across demographics and cannot be confined to Millennials as a whole.
Millennials spend not as per what they can afford but according to what they believe is worth putting the money into, which is highly derived from factors such as financial literacy, peer pressure, family background, changing marketing techniques, etc.
- Prioritization of sustainability and ethical living
Social challenges that sculpt the values of society and the increased awareness about sustainable living have an ongoing effect on how millennials think of basic goods and high-end products. The millennial mindset supports and invests in banks that align their operations with sustainability and social ethics. Luxury brands across various industries have to adapt to the ‘new normal’ of luxury that supports not only opulence and extravagance but also sustainable growth and ethical living.
Unlike previous generations who didn’t care to educate themselves about the brand’s undertakings, Millennials seek knowledge about the brand’s sourcing, labour practices, and manufacturing processes.
This eco-friendly approach of the Millennials provides various industries with scope and opportunity to refine their operations and approach attract a socially and environmentally conscious customer.
- High-paced technology and digital needs
Millennials belong to a generation that has witnessed rapidly evolving technological advancements and digitalisation. As per a report published by Bain and Company, the purchase of any luxury commodity is highly influenced by digital interaction with peers. Digital traffic to the websites of luxury brands is way more than the store visits, which indicates that millennials prefer convenience and fast purchasing to spending time at the stores like the previous generations to buy a luxurious item.
Ever-evolving technological changes have led to the need for digital commodities over traditional items. Millennials find digital gadgets and services like a stable internet connection highly essential amongst the necessities of human life.
As a result, the online presence of a brand is vital to attract the target millennial customers. With the rise in technology and digitalisation, tech companies are taking over the multiple markets – video entertainment, cars, kitchen appliances with more to come. Additionally, this has also led to the emergence of fintech companies that cater to the financial needs of the millennials digitally.
- Rising minimalism and essentialism
As millennials are inclined towards gathering experiences rather than possessions, they prioritize a minimalist lifestyle. This inclination towards decluttering is amongst the prominent reasons why millennials seek essential and luxury items that contribute towards a streamlined and clutter-free way of living.
Instead of desiring excessive materialism, millennial women and men look for items that align with a purpose and sustain their values and ethics.
This mindset of essentialism has affected both luxury and essential item categorisation. For the luxury segment, millennials tend to prefer products that are not only high quality and beautiful but also serve a practical purpose. This has caused luxury brands to manufacture products that go beyond opulence and provide functionality, utility, and premium appeal as well.
Whereas for the essential segment, millennials’ minimalist mindset gravitates towards products that are multi-functional, durable, and well-designed, which enables them to replace multiple products for one, which eventually leads to decluttering.
- Increased awareness of wellness and self-care
Rising awareness about wellness and self-care among millennials is a big reason for the revaluation of the categorisation of luxury and wellness products. Millennials are often observed comparing themselves to others on the internet, which subconsciously makes them invest in self-care and wellness to better themselves.
Additionally, increased awareness on social media about mental wellness has increased the understanding of it amongst the millennial generation and hence decreased the stigma around it.
This has blurred the line between luxury and essentials, as millennials prefer high-end products when it comes to keeping themselves groomed and healthy. The previous generation often needed to pay more attention to the prioritization of self-care. Premium products that add value to health and fitness have become the new essentials for millennials, whereas the old essential list is being evaluable by them as per various parameters.
Millennials and the blurred lines between luxury and essentials
The socioeconomic factors that influence the mindset of baby boomers are significantly different from the factors that mould the mindset of millennials. Traditional notions of luxury and essentials are consciously being changed by millennials whose purchasing decision is value-driven.
This blurred line of categorisation of luxury and essentials provides businesses with the opportunity to strategize as per the mindset of the millennial generation. Understanding the socioeconomic factors affecting the millennial mindset can make brands evolve their approach and connect better with this influential consumer group.
