Luxury brands may lose the youth market without crypto
Luxury brands that failed to integrate blockchain-based technologies could lose out on a significant market demographic.
Luxury brands have a lot to gain from blockchain technology. These high-end items can be purchased faster and more efficiently through crypto, while resold items can also be authenticated on a blockchain. A new market for digital goods via non-fungible tokens is also opening up for them.
Some luxury brands have begun to embrace the digital asset trend. For example, Gucci announced earlier this year that it would accept cryptocurrencies in 5 stores across the US. Meanwhile, others have proven more resistant to adapting to the change. The chairman of French luxury group LVMH said it was “not interested in selling virtual shoes for 10 euros,” instead insisting on “selling real products, very much in the real world.”
The global luxury market demographics
Still, failing to implement a crypto strategy can be costly for luxury brands in the long run. One study projects that the global luxury market will reach $1.5 trillion by 2025. It also claimed that millennials will represent half of the total market, driving 85% of sales growth.
According to another study, almost 3 out of 4 cryptocurrency owners are under the age of 44. More significantly high-end luxury brands are the millionaires among this demographic. For many of these millennial millionaires, over 25% of their wealth is in cryptocurrencies. Wealth is relatively common for cryptocurrency holders, 36% of whom earn more than $100,000 annually, according to another study.
Selective criteria with crypto payments
As this generation begins to flex its financial muscles, it is becoming increasingly selective about where it spends its money. Another study revealed that millennials said they would consider alternative retailers to those that do not offer cryptocurrency payments. “At 32%, millennials are the most likely to say they are ‘very’ or ‘extremely’ likely to switch, followed by Generation Z consumers at 27%,” the study said.
Interestingly, favoring cryptocurrency is not only a deciding factor for consumers, but increasingly for voters as well. Some 84% of respondents in a recent survey said that a politician’s stance on cryptocurrency would play a role in deciding whether they would vote for them.
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