A Multiple Group Analysis of Absolute versus Accessible Personal Luxury Goods Consumption Behavior among Generations X and Y in the US

Abstract

The global luxury market reached €1.17 trillion in sales in 2018 and the global market for personal luxury goods is forecast to grow to €290 billion by 2020. Close to 70% of the global personal luxury goods sales are tribute by Generations X and Y. When considering the fact that Generation X is the smaller consumer segment based on a population size, compared to baby boomers or generation Y, Gen X segment’s total expenditure on personal luxury goods, which was greater than that of either of generational cohorts is highly noteworthy. A recent study by Kim (2019) found that both generations X and Y are much heavily involved in luxury goods consumption through the ownership of multiple product categories including clothing, shoes, handbags and small leather goods, and jewelry, compared to older and younger baby boomers. Regarding personal luxury consumption at different price points such as absolute luxury vs. accessible luxury has not received much attention. Thus, this study aims to provide insights by investigating US affluent Generations X and Y consumers’ perception and lifestyle variables and their predictability of behavioral variables in the personal luxury marketplace. Using a nationwide representative sampling and online survey, a final sample of 299 responses were collected and used for this study. The confirmatory factor analysis of the measurement more as well as proposed conceptual model revealed that data fit the proposed conceptual model well. All, except one, research hypotheses received statistical support. A structural equation modeling using multiple group analysis revealed that absolute luxury owners are significantly different from accessible luxury owners. Based on the findings, pragmatic implications and future research directions are provided.