What will luxury be like for the Alpha Generation?

Introduction

In an ever-changing world, the definition of luxury has never been static. What we consider luxurious has evolved over time, reflecting shifts in society, the economy, technology, and more recently, our relationship with the environment. In this dynamic scenario, luxury brands face the challenge of adapting and reinventing themselves to remain relevant and desirable. But what will luxury look like for the next generation of consumers, Generation Alpha?

This article delves into this intriguing topic, exploring the intersection between luxury, technology, and sustainability as we venture into the world of Generation Alpha. But first, we must understand who these young consumers are and how their life in a digitally native world might influence their perceptions and expectations of luxury. Next, we will trace the evolution of luxury across generations to better understand how we have arrived at where we are today.

Luxury for Generation Alpha will reflect their unique values and experiences. From their innate relationship with technology to their growing awareness of sustainability and social justice, these factors will influence their purchasing decisions and their perception of what constitutes a luxury item. Through examples of luxury brands that are already adapting their strategies to capture this emerging audience, we will outline some of the trends and opportunities we can expect to see in the future.

In addition, this article ventures into the future of luxury in the age of Generation Alpha. How will the definitions of luxury change as this generation grows and begins to influence the market? How can luxury brands adapt and evolve to remain relevant and desirable for these young consumers?

We will conclude with a reflection on the challenges and opportunities that this generational shift presents for luxury brands. Are luxury brands ready for Generation Alpha? How can they prepare to meet the demands of these young consumers?

Who is Generation Alpha?

Generation Alpha, a term coined by demographer Mark McCrindle, refers to children born from 2010 onwards. They are the children of millennials and are growing up in a world inextricably linked to digital technology. Unlike their predecessors, they will not know a world without smartphones, social media, or real-time streaming. They are immersed in the digital world from their birth, which gives them an innate understanding and fluency with technology that no other generation has had before. This understanding and familiarity with digital technology will enable them to interact with the world in new and exciting ways.

The Concept of Luxury across Generations

Luxury has had many meanings throughout history. For older generations, luxury was often associated with opulence and ostentation: large houses, luxury cars, expensive jewelry, clothing from renowned designers. It was a way to demonstrate status and wealth. However, over time, the concept of luxury has evolved. For Generation X and Millennials, luxury began to move away from material goods and towards experiences. A trip to an exotic location or a dinner at a Michelin-starred restaurant began to be considered luxurious. Luxury became a way of self-definition and personal expression.

The Evolution of Luxury

In the past decade, the concept of luxury has evolved even further. Now, luxury is not just about physical goods or experiences, but also about time, exclusivity, and sustainability. In an era of mass production and rampant consumption, products and experiences that are unique or limited in quantity are seen as luxurious. Similarly, in a world increasingly aware of environmental and social issues, products and services that are sustainable and ethical are becoming the new luxury.

Luxury for Generation Alpha

For Generation Alpha, luxury is likely to focus even more on experiences, personalization, and sustainability. Generation Alpha will grow up in a world where personalization is the norm, not the exception, and they will expect their luxury experiences to be tailored to them. Additionally, as sustainability becomes an increasingly important concern, Generation Alpha will value brands and experiences that are environmentally conscious and ethical.

Key Factors: Technology and Sustainability

Generation Alpha is the first generation that will grow up in a world where digital technology is ubiquitous. Their fluency in technology will enable them to interact with luxury brands in new and exciting ways. From augmented and virtual reality to artificial intelligence and machine learning, technology will provide a wealth of opportunities for luxury brands to create unique and personalized experiences for Generation Alpha.
Sustainability will be another key factor in Generation Alpha’s perception of luxury. As awareness of environmental and social issues increases, luxury products and experiences that are sustainable and ethical will be increasingly valued. Luxury brands that adopt sustainable and transparent practices in their production and operations will likely be more attractive to Generation Alpha.

Examples of Luxury Brands Targeting Alpha

In response to these changes in the perception of luxury, many luxury brands are already beginning to adapt their strategies to attract Generation Alpha. For example, some luxury brands are incorporating technology into their stores and products to create immersive and personalized experiences. Other brands are emphasizing their commitment to sustainability and ethics, highlighting their use of sustainable materials and their commitment to fair labor practices.

1. Balenciaga: In December 2020, Balenciaga launched its fall/winter collection entirely in video game format (Afterworld), where players traveled through a Wonderland-style future world, encountering avatars dressed in ripped jeans and metallic armor boots.
2. Moncler: Moncler entered the in-game merchandise market selling accessories and skins in Fortnite at prices ranging from 8 to 18 dollars.
3. Burberry: In China, Burberry designed outfits for the characters of Honor of Kings, one of the country’s most popular video games. The new skins developed for the game, available only to Chinese players, feature the brand’s signature trench coat and tartan.
4. Kering, Moncler, adidas, and LVMH: These brands have taken the lead in their gaming-related initiatives. Games can contribute to the sustainability efforts of luxury brands, as they offer numerous opportunities for people to try on and wear “virtual” garments.
5. The smart toys market: This market, which reached $11 billion in 2020, reflects Generation Alpha’s search for the most innovative and disruptive. Furthermore, the incorporation of new technologies like augmented reality in advertising is key to connecting with this generation. Luxury brands are expected to increasingly adapt to these trends.

The Future of Luxury and Generation Alpha

As Generation Alpha grows and begins to form their own consumption patterns, we are likely to see even more significant changes in the luxury market. The integration of technology into luxury experiences will become increasingly common, and sustainability and ethics will continue to be key factors in luxury purchasing decisions.

Challenges and Opportunities for Luxury Brands

For luxury brands, these changes represent both challenges and opportunities. On one hand, they will have to adapt and evolve to meet the changing demands of Generation Alpha. This may require significant investments in technology and changes in production operations to be more sustainable and ethical. On the other hand, brands that can successfully meet these demands will have a great opportunity to stand out and capture this emerging group of luxury consumers.

Conclusion

Generation Alpha is poised to redefine luxury in exciting and novel ways. With their innate familiarity with technology and their growing awareness about sustainability, they have the potential to transform the luxury market. For luxury brands, understanding and adapting to these changing perceptions of luxury will be key to their success in the era of Generation Alpha.