The luxury market has had a good year. Fashionista.com reports that companies like Hermes and LVMH have reported significant gains in their market-share, including the scandal-heavy Dior where the controversial John Galliano was let go after making anti-semetic comments. The same would not have been reported back in 2008 and 2009, when luxury travel was declining and fine dining was on the way out. As the recession passed, these luxury "traditions" are back on their way up, but the same can't be said for the luxury fashion industry. Why? Because that portion of the luxury market was never on the decline in the first place.
Statistics show that the reason for this is that the traditional luxury consumer is not as adamant about buying luxury clothing as he used to be and to make up for it, the Generation Y consumer has taken his place. Peter Niessen, Vice President of American Express Business Insights says the traditional consumers only make up 40 percent of the market and Generation Y makes up the rest.
So why is Generation Y buying luxury clothing? There are many reasons for this, and most of them have nothing to do with having luxury finances. As we've all seen, fashion itself is a mega-watt concept these days. Common folk are clamoring to get into fashion shows during Fashion Week now that fashion bloggers are more prominent than fashion media personnel. Fashion events are bigger and better than ever (have you seen the crowds during Fashion Night Out in New York?) and models, designers, and brands are just as big as celebrities. Karl Lagerfeld is a household name and everyone knows what happened at Dior. Not to mention that celebrities like Kim Kardashian, Kanye West, and even Justin Bieber heavily endorse fashion. At an age where we're all so impressionable, it's not surprising that Generation Y wants to be like the people they see on the screen and in the headlines...and that means dressing like them, too.
I’m not going to tell you that luxury is back because it never really left,” Niessen said. “But the nature of who that luxury consumer is has fundamentally changed,”