The Oxford Advanced Learner's Dictionary defines “Millennials” as the generation who became adults around the year 2000 (also known as Generation Y - the cohort following Generation X). While researchers have held different perspectives regarding when this cohort starts or ends, they refer to “Millennials” as people who was born from the early 1980s to early 2000s. Similar to their previous generations, Millennials are not defined by demographics alone, but rather by a combination of their demographic cohort, values, life experiences, and buying behaviours (Ordun, 2015).

Different times - Different features

William Strauss and Neil Howe (1991) argued that every generation has its own features such as behaviours, attitudes, and beliefs which are shaped by different events occurring through a lifetime. These unique features are believed to have profound effect on the consumption and purchase behaviour of each generation according to the Consumer Behaviour Model (Hawkins and Mothersbaugh, 2013). In this model, consumption decisions are to satisfy needs and desires produced by self-concepts and lifestyles which are based on a variety of internal and external influences. This essay aims to detect the different and similar features in consumer behaviour in the area of luxury goods between Millennials and previous generations (Generation X and Baby Boomers) as well as focus on explaining these features through distinct internal and external influences.

(Hawkins and Mothersbaugh, 2013)

Millennials are likely to consider opinions from their peers to make decision of consuming rather than corporate mouthpieces.

Compared to previous generations, Millennials tend to be affected significantly from their peers to improve their self-confidence and to blend into the social environment. Nielsen’s Global Trust in Advertising report (2013) showed that the percentage of people who based their consuming decisions on “recommendations of people who they know” and “consumer opinion posted online” are 84% and 68% which had increased respectively 6% and 7% since 2007. The 2015 report also illustrated that millennials believed in “recommendations of people who they know” (85%) and “consumer opinion posted online” (70%) more than older generations (generation X and baby boomer). This intense influence of the peer community in term of consuming luxury goods is even stronger (Makgosa and Mohube, 2007). The reason is that while people are likely to concentrate on the “symbolic value” of goods and services in their efforts to highlight status and group membership or to support their self-image, luxury goods are typical examples of “symbolic consumption” goods which are refered to high value, uniqueness, and its social impact. (Giovannini et al, 2015).

The consumer behaviour that concerned about peer approval of Millennials results mainly from an external influence that is the strong effect of references group due to the popularity of the Internet and social media. According to Vijay and Varsha (2013), reference groups and social media have a strong, decisive influence over the decisions making process of generation Y. Despite being established from 1981, social media have become popular in the 21th century including social networking sites, online review/rating sites, online forum and so forth. As a result, they are the first global generation connect and live in the online environment almost their whole life (Bolton et al., 2013). The accessibility of social media has amplified the voice of individual consumers who could become an expert by sharing their experiences about a brand on the Internet. Those experiences, which is considered as reliable sources of information, spread rapidly and affect strongly the consuming decision of Millennials who use mobile devices to read user reviews and to research products while shopping more frequently than non-Millennials (50% versus 21%) and also to be much more likely than non-Millennials to explore brands on social networks (53% versus 37%). (BCG, 2012).

Millennials show low level of brand loyalty compared to older consumer

In general, Millennials are considered as a generation with a low level of brand loyalty by a large number of researchers (Gurau, 2012). The statistics showed that 29% of Millennials and 35% of Gen X usually buy the same brand, but will try others occasionally (Daymon Worldwide, 2016). In addition, only 24% of Millennials think that they are more brand-loyal than their parents while the figure for less brand-loyal people is 31% (Adroit Digital, 2014). There are two common reasons for the low level of brand loyalty among Millennials which come from both internal and external influence.

(Adroit Digital, 2014)

The first reason, which could be seen as an external influence, is that Millennials tend to be overwhelmed by constant promotions (a type of marketing activities) versus brand advertising (Ritchie, 1995). In other words, brand advertising, which focused on baby boomers, has gradually shifted to price promotions resulting in brand switching (Mitchell et al, 2005). However, regarding luxury goods, the effect of price promotions is ambiguous. Theoretically, people often consume luxury goods like jewellery, pricey watches and luxury cars to provide evidence for their wealth and to achieve or maintain social status. Thus, a higher price confers greater status (Hinz et al, 2010). However, according to Accenture survey in 2010, only 1% of respondents said a discount would negatively impact their impression of a luxury brand, while 70% said discounts were the biggest influence in their decision to purchase a luxury good. It could imply that discounts are efficient. In other words, price promotion has practical effects on brand loyalty of consumers of luxury goods (Jacobson et al, 2011).

Another reason, which is considered as an internal influence, is the rational attitude. Millennials are rational consumers who concentrate on a product’s price and quality more than the brand name itself (Gurau, 2012). As a result, they tend to switch to another brand name if they find another cheaper one with same functions or they experience dissatisfaction relating to the quality of products used currently. According to Parris (2007), 73% of Millennials will leave after one bad experience, and 85% will tell others about their poor experiences. In term of luxury goods, which are sold at very high prices due to their design, aesthetics and rarity, consumer expect not only a outstanding quality but also perfect services (Bilge, 2015). They require luxury products to improve their personal and social identities. Therefore, because of their strict requirements, it is hard to satisfy these consumers who are easy to switch to another brand which provide a higher level of satisfaction.

Reasons for switching brands (Adroit Digital, 2014)

Similarities: Generations in family share same consumer behaviours

As Heraclitus said, “Change is the only constant in life”. Each generation experiences different external and internal influences which affect their consumer behaviours. However, in specific situations, under the effect of appropriate internal and external influences, people from different cohorts may behave in similar ways. We can see this phenomenon in consumer behaviour of people in a family. For example, members of a family are likely to prefer the same brands of car. According to Anderson (2015), a child whose parent has purchased a given brand is 39% more likely to choose that same brand than a demographically similar child whose parent did not choose that brand. This phenomenon could be explained by the effect of external influences such as family (reference groups) or social status. In fact, this influence have a general impact on consumer behaviour of all types of goods and services and luxury goods is not an exception.

Toyota Camry vs Mercedes S600

Family in the role of a reference group affect strongly on the consumer behaviour of Millennials. These youngsters often acquire by observing other members of their family who function as a role model (Schiffman et al, 2015), especially in Millennials. Parents of Millennials have focused on family values and have taken part in every aspect of their children’s educations, including that received in college (Howe and Strauss, 2000). The Millennials also has a high regard for their parents. When Time conducted a survey of 12- to 14-yearolds with the question “Of all the people you know or know about, who do you look up to the most?” in 1995, 79% of respondents said that they looked up to their parents (Keeling, 2003). Moreover, because people in a family often show same social status, their behaviour also tailors to meet their social status. For example, while Millennials in middle-class families often prefer Toyota or Honda, Millennials in upper-class families are attracted by BMW or Audi.


As being discussed by Hawkins and Mothersbaugh (2013), different external and internal influences lead to different self-concept and lifestyle which result in different needs, desires and consumer decisions. This model provides appropriate explanations that the differences and similarities in the consumer behaviour in the area of luxury goods between Millennials and previous generations are due to distinct internal and external influences which impact on each cohort, notably the popularity of Internet and social media as well as a rational behaviour. Several typical examples of these differences include the low level of brand loyalty as well as the high influence of reference groups. However, while the differences among generations are significantly remarkable, people from different generations may still find some similarities in their behaviours when they are affected by similar influences such as reference group (family) or social status.


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