Will Generation Y Sustain Luxury Fashion?

Hilton, Ritz-Carlton, Four Seasons and Starwood, among other luxury hotel chains, have reported a jump in demand for luxury rooms at the end of the first quarter, and renewed interest in high end lodging is recovering from the sour economy faster than the overall interest in the hotel market. {USA Today}

Not to be captain obvious, but this is good news for the luxury hotel business. And what is good for one luxury market may be good for another, no? Could the news signify an upturn for the struggling luxury fashion market?

Chain stores like Saks and even Abercrombie and Fitch – who famously held out on discounting merchandise during the worst of the recession, have reported growing sales so perhaps demand for luxury fashion items will follow. {The Cut, StockMarketsReview}

High end fashion marketers and retailers in the U.S. have attempted to remain relevant by focusing their attention on understanding generation Y and what the tendencies of those born roughly between 1977 and 1994 mean for the future of luxury. The L2 Generation Next Forum, held in New York City last week for fashion professionals to gain “insight into tomorrow’s affluent consumer,” discussed the next coming of luxury fashion with tips in the form of a speech from 14-year-old fashion blogger Tavi Gevinson (aka The Style Rookie). {Stylelist}

“Just as Boomers drove the luxury sector for the last 20 years, brands that resonate with generation Y, whose purchasing power will surpass that of Boomers by 2017, will be the new icons of prestige,” Scott Galloway says. Galloway is a New York University Stern clinical associate professor of marketing who founded L2. Estimated at 70 to 85 million people, generation Y is the largest consumer group the U.S. has ever seen. {MediaPost}

Tavi advised the luxury fashion insiders to whom she spoke that generation Y is “over trends in two seconds” and that teens “want to be cultured” and “know the story behind a brand” in addition to feeling part of a group, while the L2 Generation Y Prestige Brand Rankings found Chanel, Cartier and Ralph Lauren dominated as the most popular high end fashion brands for generation Y.

Absorbing all things generation Y is a smart move for luxury marketers and retailers, but we wonder whether it will pay dividends all that quickly. By 2017, when much of generation Y is well established enough to afford high end brands, the best way to market to this group may have changed.