HHa_e .(a_e .( DCF and valuation pIndustry oaramevervieterws I Points of view from EY global sector Millennials and the luxury landscape and other industry professionals Millennials and the luxury landscape Creating a dialogue through social media Millennials are taking the reins of luxury, and for Condé Nast magazine calls it “the Yelp effect.” Every them, it’s all about the experience. Born in an era experience with a brand, good or bad, can be easily bookended by the introduction of the personal catalogued, documented and shared online via social computer and the smartphone, millennials have media in todaq’s oorld. 9lmost a imarter of searches always had information — and choices — right at their for millennials’ top 20 brands are links to John Nguyen fingertips. Oith *- of all homseholds in the MK user-generated content. Additionally, millennials lean making more than US$500,000 annually belonging heavily on recommendations from friends and peers. Senior Manager, Audit to millennials, the generation represents a lucrative Because millenials are accustomed to seeking out Dallas, Ernst & Young LLP United States market for luxury brands. The U.S. Chamber of recommendations, lmxmrq brands are finding it critical Commerce cites that although they’re decades away to maintain positive relationships with them. One way from peak earning power, millennials currently they’re doing this is through social media. command approximately US$700b in purchasing More than 2.1 billion people worldwide are on social power: US$200b of their own and US$500b of media in one form or another. And one-third of 1 indirect spending thromgh inÖmencing their parents. millennials cite social media as their preferred Jecrmiting firm :erglass # 9ssociates estimates that method of communication with businesses.2 Because by 2017, the millennial generation is expected to millennials tend to be very active on various forms of outspend baby boomers. Tapping into millennials’ social media, there are numerous channels and Kelsea E West desire for engagement is forcing brands to innovate opportunities for luxury brands to deliver their and create ever more immersive, interactive 3 messages to a willing audience. According to Chris Senior, TAS experiences for consumers. Paradysz, co-CEO of marketing agency PMX Agency, Dallas, Ernst & Young LLP United States Here is what some luxury brands are doing to capture Gucci, Chanel and Burberry have seen success with millennials’ hearts — and wallets. an innovative digital presence attracting millennial consumers. Chanel’s YouTube channel currently has more than 550,000 subscribers and features high-production content, including promotional videos, fashion shows and beauty tutorials. 2 Tom Pick, “47 Superb Social Media Marketing Stats and Facts,” 1 Crqstina ?mstafson, ÉEillennials redefine lmxmrqÈand the staces are InfusionSoft, 21 January 2016. 3 high,” CNBC News, 18 February 2015, CNBC LL 2016, accessed via Erin Shea, “Future of fashion brands depends on millennial brand http2''ooo.cnbc.com'*()-'(*')0'. affinitq,Ê Luxury Daily, 18 January 2013 , Napean LLC, 2016. The luxury and cosmetics financial factbook 2016