Over the next few years, our packaging bags make sure we’re in the best position to deal with the next generation of consumers.
Millennials – individuals who were born between 1981 and 1996 – currently represent around 32% of this market and have been predominantly driving its change.
And this is only going to increase as, by 2025, those consumers will make up 50% of this sector.
Gen Z – those born between 1997 and 2010 – are also set to be a significant player in this area, and are on track to represent 8% of the luxury market by the end of 2020.
Speaking at Packaging Innovations’ 2020 Discovery Day, alcoholic beverages firm Absolut Company’s innovation director of future packaging Niclas Appelquist added: “Both these groups’ expectations of luxury brands are different from previous generations.
“This must be viewed as a positive, so it presents an opportunity and a lot of potential for the business.”
In December 2019, customer-centric merchandising platform First Insight conducted a study titled The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail.
It notes that 62% of Gen Z customers prefer to buy from sustainable brands, on par with its findings for Millennials.
In addition to this, 54% of Gen Z consumers are willing to spend an incremental 10% or more on sustainable products, with this being the case for 50% of Millennials.
This compares to 34% of Generation X – people born between 1965 and 1980 – and 23% of Baby Boomers – people born between 1946 and 1964.
As such, the next generation of consumers are more likely to buy products that are environmentally conscious.
Appelquest believes the luxury industry has “all the credentials” to take a lead on this part of the sustainability conversation.
He explained: “A focus on handcrafted products made slowly and with high-quality materials means luxury products can last a lifetime, reducing waste and protecting our environment.
“So with a heightened awareness around climate issues, consumers are no longer willing to accept unsustainable practices and will actively disassociate from brands.”
One luxury company making strides in this space is fashion house Stella McCartney, which in 2017 switched to an eco-friendly packaging supplier.
In order to fulfill its ongoing commitment to sustainability, the brand turned to Israeli start-up developer and manufacturer TIPA, which develops bio-based, fully compostable packaging solutions.