This generation buys more luxury goods than any other

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The world of luxury shopping is changing — and younger generations are becoming its guiding light.

 

A new report from Klarna, a Swedish buy now, pay later (BNPL) platform, reveals that 45% of consumers bought a luxury product in the past 12 months. And while baby boomers and Gen Xers accounted for the bulk of luxury shopping before the coronavirus pandemic, millennials and Gen Zers are now making purchases at far higher rates than their older counterparts.

 

Here’s what we learned from Klarna about why and where consumers are shopping luxury.

More than 6 in 10 millennials have bought luxury in past 12 months

Indeed, younger generations have been buying luxury products in the past 12 months. (To define “luxury,” Klarna points to price points above $300 for beauty, $500 for fashion, shoes and accessories, $1,000 for jewelry and $1,000 for home.)

 

More than 6 in 10 millennials (ages 25 to 40) (63%) have bought luxury items in this period, followed by:

  • 60% of Gen Zers (ages 18 to 24)
  • 46% of Gen Xers (ages 41 to 56)
  • 18% of baby boomers (ages 57 to 66)

But why do consumers choose products — and brands — with heftier price tags? At the top of the list, 64% of consumers cite higher-quality materials, followed by:

  • Brand name (52%)
  • Longevity (50%)
  • Authenticity (48%)
  • Exclusivity (39%)

Besides the draw of buying products made with higher-quality materials, 78% of shoppers say a brand must be committed to innovation and new technologies before purchasing from it.

On that innovation and new technologies front, 61% of luxury shoppers want to use a mobile app, while 57% want flexible payment options. One flexible option is a BNPL loan, which can help make expensive purchases more affordable by spreading out payments.

 

BNPL loans are growing in popularity, too, as 36% of consumers say they were at least considering using a BNPL loan in January 2022, according to the LendingTree BNPL Tracker. But it’s important to proceed with caution, especially with more expensive luxury purchases.

 

Consumers could also consider using a credit card with generous cash back rewards.

Luxury shoppers prefer brick-and-mortar

Amid a global coronavirus pandemic, it’s interesting to track how people are doing their shopping. While 2 in 5 consumers who purchased luxury items last year did so online, physical brick-and-mortar stores appear to be the preferred way to shop for high-end goods.

 

More than 4 in 5 consumers (84%) say that seeing — and touching — these premium products are essential to the shopping experience.

 

Across product categories, here’s where consumers lean:

  • Food and beverage (45% in-store, versus 16% online)
  • Watches and jewelry (45% in-store, versus 18% online)
  • Homeware/interiors (37% in-store, versus 18% online)
  • Beauty (37% in-store, versus 22% online)
  • Health and fitness (36% in-store, versus 23% online)

The only two categories where the findings were flipped were travel (51% online versus 14% in-store) and fashion (35% online versus 26% in-store).

 

Lastly, what matters most in the online shopping experience appears to vary by generation. Older generations care most about paying securely when shopping online (54% of baby boomers versus 34% of Gen Zers). Younger generations, however, value the option to purchase online and pick up in-store (57% of Gen Zers and 54% of millennials versus 30% of baby boomers).

 

These factors matter, so make sure you know what’s most important to you when considering high-price luxury items.

Methodology

Klarna commissioned research agency Dynata to survey more than 5,000 consumers ages 18 and older, including 1,051 in the U.S. The survey was fielded in October 2021.

 

Generations mentioned in the survey as defined as follows:

  • Generation Z, ages 18-24
  • Millennials, ages 25-40
  • Generation X, ages 41-56
  • Baby boomers, ages 57-66

The report also used insights from Klarna’s proprietary shopping index data of 58 million online purchases on its platform, made in the U.S. between January and December 2021.

 

Related:

This article
originally appeared on 
LendingTree.com and was
syndicated by
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17 common things you should never buy on the cheap

 

When you are shopping for goods and services, do you tend to look for the cheapest? If so, you may want to re-think your approach. Buying cheap items can save money in the short term, but one truth about money is that a long-term mentality pays dividends.

 

So rather than saving money, you might be spending more by purchasing multiple cheaper items rather than purchasing one high-quality item from the start.  Let’s take a look at 17 items and services that you should never skimp on.

 

 

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Home repairs shouldn’t be ignored as they can lead to bigger, more expensive problems.  However, they shouldn’t be fixed cheaply either, as you may end up paying for the same repair twice. When you hire professionals, you pay for their services and their knowledge.

 

The materials used should be high-quality as well, as you don’t want to use items that need to be replaced quickly either. If you take the less expensive choice with a home repair, you have to be prepared to pay for it in the long haul.

 

 

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Cutting back on a cheaper home insurance policy could cost you a lot of money in the long run.  Don’t settle for less when it comes to protecting your home and its content. Make sure to get the insurance that has replacement-cost coverage.

 

If disaster strikes and you were to make a claim, an actual cash value plan would reimburse you only for your belongings’ depreciated value, and that’s not enough to cover the costs of replacing everything.

 

 

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Your greatest wealth is your health, and you should treat it as a valuable asset. Don’t hesitate to spend money to take care of yourself.  That includes getting your monthly medications, regular check-ups and paying for a quality health insurance plan. The peace of mind of being covered for emergencies such as accidents, broken brackets, or toothaches is priceless. Money is important, but your health should be a priority.

 

 

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Owning a car is expensive. Be ready and prepared for the worst scenario by getting car insurance. When choosing a plan, be sure to weigh the pros and cons of the coverage options you have. Cheap policies may seem captivating but make sure you are covered for your specific situation. Know the company’s policy and set a meeting with an agent to discuss what promotional savings are available without affecting your coverage levels.

 

 

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Don’t skimp maintaining your heater, ventilation, and air conditioning systems. Unfortunately, issues pop up from time to time in your home but prevent the ones you can with proper HVAC maintenance. You’ll regret cutting corners to save money if you’re left without heat or air conditioning.

 

 

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Let’s all be honest; there are times where quick meals are our go-to food, whenever we are late for a meeting, school, or having a midnight craving. Fast food restaurants are everywhere, available 24 hours a day, and are often cheap. Of course, healthy foods can be a bit more expensive in the short term, but studies show that a healthy lifestyle saves you money over the course of your lifetime.

 

 

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Who doesn’t love traveling? Going to new places, trying new food or learning about new cultures even for a short time. When traveling, we want to stick to a budget and save as much as we can. Getting a cheap flight can feel like winning the travel game but picking a low-cost airline that charges for carry-on luggage fees or seat selection can erase savings.  While it’s tempting to select a cheap flight with a layover or a very early departure time, those flight chooses can significantly impact a short weekend trip.

 

 

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Forget about cheap children’s safety products.  Instead, opt for products with significant safety features. For example, while car seats can be costly, picking on that can grow with your child from birth to ten years old can save you money in the long term without sacrificing safety.

 

 

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Having a baby is priceless, but The Cost of Raising a Child is $233,610, according to the USDA. So while it’s tempting to pick cheaper diapers, formula and gear, leaking diapers, diaper rash, a gassy child or items that don’t hold up won’t be worth it.

 

 

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Your skin is your body’s largest organ, so make sure you’re taking care of it. It’s unnecessary to spend hundreds of dollars on effective products when a wide range of dermatologist-recommended, clinically proven skincare is an option. High-quality, reasonably priced products are widely available at drug stores, Target, Walmart and even Amazon.

 

 

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If you’re into do-it-yourself projects, you know how critical the proper tools are to complete a job. Having an expensive toolset is not just for a show. Its durability can save you in the long run. Having the proper tools can be the difference between doing the job yourself or hiring an expensive contractor with high-income skills for projects repeatedly.

 

 

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Whether you’re moving to a new home or replacing broken appliances, the quality and durability have a massive impact on their lifespan. Therefore, major appliance purchases should be considered with a long-term mentality.  For example, new eco-friendly machines can mean a lower electricity bill and cashback through rebates.

 

 

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Door locks are essential for our homes; they provide security and peace of mind. However,  a shabby lock doesn’t give any certainty that it will last for a long time, or it can hold up from an intruder’s efforts to get into your home. For safety measures, choose the one that gives safety and security for the long term.

 

 

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Gadgets are pricey. There’s no doubt about that. However, does the cheaper model provide the features you need? For example, if you’re purchasing a phone to take high-quality photos, will the quality meet your expectations?

 

While there are computers you can purchase for half the price as others if it doesn’t meet your needs or breaks you’ll be back at the store before you know it.

 

 

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The America Red Cross reports that home fires are among the biggest threats to families and young children. Did you know that 80% of children sleep through standard-issue smoke alarms? While alarms that allow parents to record an emergency message are more expensive, they are three times more likely to wake sleeping kids.

 

 

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Junk food exists for pets too! Unfortunately, 70% of dog owners don’t know what’s in the food they give their dogs. Cheaper ingredients aren’t good for your dog and can lead to expensive health issues, just like in people. Ask your vet for advice and then shop around at big box stores or online to find a quality product that’s reasonably priced.

 

 

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The average cost of eyeglasses in the U.S. is an eye-popping $196. So while you could buy basic easy readers from the dollar store or under $10 from your local pharmacy doesn’t mean you should. Cheaper eyeglasses do not have the same quality and protection compared to their more expensive counterparts. In addition, if you’re not professionally fitted for eyewear, you could be prone to headaches and harmful light rays.

 

 

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While not all cheap things are bad, when it comes to health, safety and long-term durability, don’t be stingy with your purchases. There will be other opportunities to save money and cut discretionary spending.

This article
originally appeared on 
Savoteur.comand was
syndicated by
MediaFeed.org.

 

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Featured Image Credit: cobrusia / iStock.

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