It’s a good bet that Samuel Taylor Coleridge was not contemplating high-end real estate development whilst in the grip of the opium-fueled fever-dream that inspired the original Kubla Khan. However, I cannot think about the amount of money spent on marble steam showers, Sub-Zero appliances, built-in Bose surround sound, or 2000-thread count sheets without it evoking images of ancient kings and the old-fashioned extravagance of the super-wealthy. It’s not that fancy things aren’t awesome – hell, if you have the cash to install a wine cellar or wood-fire pizza oven in your palatial estate, then I say go for it – it’s just that they are not necessary. Specifically, you don’t need to go overboard to attract Gen Y. In fact, there is a certain sense in which this could be a detriment.
This is a good time to reiterate the standing caveat: Gen Y is not a homogenous group. While Solving for Y does make some generalizations, based on sociohistorical context, it’s important to recognize that individual results may vary. In the United States, this is particularly true when it comes to the privileges borne from being born rich. The young Astors and Vanderbilts and others who qualify as “old money” in this country will certainly have a different perspective. But, chances are if you are reading this, you don’t know any of the horsey set anyway. So, here is my take on the changing relationship of Gen Y to the notion of luxury.
Tightening the (Bvlgari) Belt
We know that this generation has grown up with constant praise and attention, producing a certain sense of entitlement. And while I prefer to focus on the confidence that comes with it, there is no denying that many in the group feel that they “deserve” the best in life. This is good news for providers of high-end goods and services, as Gen Y is far less likely to view these purchases as “frivolous,” or to associate them with feelings of guilt. The marketing department should be aware, however, that positioning an expensive product as an “indulgence” or a spontaneous “splurge” will not likely resonate. Better to put forth the idea that luxury is an investment in one’s self.
This notion carries over into what Gen Y expects in return. Having lived through the Great Recession, they are very much aware of the need to set a budget, and to live within their means. While they may not always stick to it (who among us does?), their willingness to justify spending big is usually tied to some utilitarian purpose. For example, a nicer car or wardrobe might lead to a better job, or a relaxing vacation might result in greater productivity. The justification needn’t be huge, but it does mean that they are looking for value for their money. A higher price tag needs to be commensurate with a higher quality of product. Gen Y doesn’t want to just throw cash at the hottest label; they want it to be a gateway to a better experience.
Sorry, Donatella, It’s Not All About You
Speaking of names, luxury providers should be very careful with their branding. Gen Y can be fantastic brand advocates, and will happily spread the word about companies that win their business, but ostentatiousness is out. Plastering your name and logo all over the place does not impress this group. In fact, because individualism is so important to them, the last thing they want is to be labeled – literally – the same way as everyone else. They prefer to mix and match the things they like, customize their own style, and tell their story through a sort of “identity collage.” Overtly status-grabbing brands might find that their flashiness works against them in other ways. For example, a fashion-saavy Gen Yer is probably more likely to brag about how little she paid for a flawless Louis Vuitton knockoff than to shell out for the real thing.
Finally, back to the Xanadus, Versailles, and Hearst Castles of the world; Gen Y is extremely aware of their place in the world, and the need to give something back. They are far more impressed with a Gold LEED certification than a brushed-platinum sink handle. Where once a lush, verdant lawn was seen as proof of care in landscaping, it is now seen as lack of care in water conservation. This generation enjoys comfort and quality, but will not tolerate the sort of conspicuous consumption that all-too-often goes hand-in-hand. For them, having the resources to spend on luxury means also having the responsibility to leave a place better than you found it. So, while 24-hour concierges, pet spas, and turn-down service are nice, sustainability and social consciousness make a much bigger impact. Besides, think of what you will save in pillow mints.