Millennials, and Second-Hand Luxury Goods
Millennials are suckers for luxury brands, just like older folk. It’s just that they’re not willing to spend luxury money on them. In fact, younger adults are happy to buy luxury items used. So says Beverly Hills pawn broker The Loan Companies.
Jordan Tabach-Bank, CEO of The Loan Companies, points out that millennials regularly comparison shop via the Internet, and as a result, come to the astute conclusion that buying luxury brands on the secondhand market yields the best value.
This may partially explain the results of a 2017 study conducted by international accounting firm, Deloitte, which shows a significant decrease in spending in the luxury goods market from Americans aged 20 to 34. It’s not that millennials aren’t buying the goods, it’s just that they’re paying less per item.
Despite a downward trend in retail spending, consulting firm, Bain & Company, found that along with Generation Z, millennials are still projected to account for 45% of the global personal luxury goods market by 2025.
Tabach-Bank sees millennial spending habits as an opportunity, rather than a crisis, maintaining that luxury brands like Rolex, Cartier and Hermès still resonate heavily with younger generations.
Millennials’ ability to navigate the Internet and their predilection for researching purchases make them educated consumers, and they look for these brands on the secondary market.
A recent Bloomberg study found that millennials would prefer to tell a potential partner about their personal health issues rather than their debt, but according to Tabach-Bank that taboo does not carry over to collateralized loans against luxury goods. “Purchasing secondhand and making pawn loans are acts that unfortunately carried unnecessary shame with previous generations.”
“In contrast,” Tabach-Bank added, “millennials see collateral loans as smart business decisions and attach no stigma to them. They are credit conscious and these non-recourse transactions are a responsible way to fund a backpacking trip in Southeast Asia or a new tech start-up.”
Sounds like a good financial plan.
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