Millennials Desire High-End Goods, but Choose to Purchase Luxury Brands Secondhand
The Loan Companies, comprised of upscale pawn brokerages located in Beverly Hills, Chicago and New York City, has found that millennials continue to prize iconic luxury brands despite all reports to the contrary. The commonly accepted narrative is reinforced by 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.
Jordan Tabach-Bank, CEO of The Loan Companies, explains these disparate conclusions, following a review of The Loan Companies’ sales data: “Millennials are clearly disrupting the retail landscape, but they have come to compose our fastest growing demographic. They 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. Because the average millennial places such a high value on a good deal, they visit our locations to purchase luxury assets at heavily discounted prices, particularly diamond engagement rings and high-end watches.”
Despite a downward trend in retail spending, leading investment firm, Bain Capital, 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.
Millennials also leverage such possessions to fund both business and personal expenses, by pawning their luxury goods to bankroll their lifestyles. 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, 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.”
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