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Nike, Adidas, Under Armour: Do Millennials Have The Luxury Of Flexing For Sport?

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If you haven’t heard the word “flexing,” you may not have many teens or 20- or 30-somethings in your life.  Flexing has been defined in a few ways, but overall it signifies how someone might flaunt or show off an item which they closely identify with their personality. 

 According to this DailyDot piece, the slang definition gained mainstream popularity through rap music, with the phrase popping up here and there on Twitter last summer. Now, younger adults are flexing on social media by posting everything from the food they cook on Instagram to showing off their wealth through profile photos on Tinder. 

One of my “top 10 predictions for retail in 2019” was that Millennials will flock to brands – luxury in particular.  I noted a study by Bain & Co. that forecasted that by 2025, Millennials and Generation Z will represent 40% of the global personal luxury goods market.  Since we are at the halfway point in the year, I thought it would be interesting to see how luxury brands have been responding to this opportunity.

In general, luxury brands have been slow to communicate their environmental and social policies, even as about half of Millennials say they research brands before buying.  And as Millennials look for more sustainable practices, such as renting clothing, recycling their purchases, and socially conscious supply chains, luxury brands need to find ways to connect to causes that matter to them.

One way luxury is reaching the Millennial consumer is through the secondhand re-sale market. ThredUp estimates the secondhand market will reach $51B in five years and that the resale market has grown twenty-one times faster than the retail apparel market over the past three years. According to Harvard Business School’s Digital Initiative, “For younger generations – the mindful Millennials and Gen Z – environment and social consciousness is important, which is what powers the secondary market. Buy, sell, repeat. This is the way to eliminate waste in the fashion industry and to reduce fashion’s environmental impact.”

According to this piece from the Renewal Project about how Millennials are changing luxury, “Millennials are ready to make changes in the world. They do not just accept things because they have always been done a certain way. They are active in the causes that matter to them from climate control to civil rights. Millennials are putting their money where their mouth is, so if your luxury brand wants to connect with this generation show you support the causes they care about. Then, they will want to support you as well.”

Luxe recently gave a few examples of luxury brands making big changes to promote transparency and connect with particular causes.  One company, Tiffany (NYSE: TIF), operates in an industry that has come under fire for bringing conflicts to communities in Africa. According to the story, Tiffany was one of the first big jewelry names to source metals and diamonds from responsible mining companies, and has implemented a zero-tolerance policy for purchasing diamonds from countries with human rights infringements. They also have a philanthropic foundation working on reef conservation and awareness for responsible mining.

Another example is Rolex, which launched the Rolex Award for Enterprise in 1976, giving a large cash prize to entrepreneurs over the age of 18 for projects that are bringing about a positive environmental or cultural change.

As I examined how luxury brands are responding to the Millennial opportunity, it made me wonder about the role other brand categories are playing in the flexing trend.

We recently conducted a consumer study of more than 1000 people in the U.S. about their flexing habits and found that while consumers want to personally associate with luxury brands, sports brands are actually the most popular across nearly every age demographic, including Millennials.

An average of 23 percent of survey respondents said they are flexing sports brands (adidas (ADS.F), Under Armour (NYSE: UA), Nike (NYSE: NKE), Champion (NYSE: HBI) and Asics), versus 17 percent of respondents who said they flex luxury brands (Gucci, Louis Vuitton (MC.PA), Burberry (BRBY.L), Hugo Boss (BOSS.DE)and Michael Kors (NYSE: CPRI)). Nineteen percent said the same for heritage brands (Gap (NYSE: GPS), American Eagle (NYSE: AEO), Levis Strauss & Company (NYSE: LEVI), J. Crew, Polo Ralph Lauren (NYSE: RL)).  Why are sports brands so central to the identities of Americans, particularly Millennials?

When you think about it, the pure nature of sports brands puts this retail category at the center of many socially relevant causes, whether it’s inclusion, equality or political leanings. Cause-driven younger generations are likely to easily find a sports company that aligns with their beliefs, whether it be through equal media attention and pay for female athletes or even the singing of the national anthem.

This piece by Hunter Schwartz of CNN earlier this year pointed out that “Athletes have turned to fashion to send a message. Cleats and sneakers have become a canvas of political and social expression for some of today's biggest and most outspoken sports stars -- and a way to make a statement while standing.”

Regardless of the category, ensuring a brand is keeping up with expectations of younger generations needs to start now.  The fact that sports brands and luxury brands are two of the most flexed categories by Millennials can give visibility into the importance of connecting a brand with what is authentically important to this increasingly affluent group of shoppers. We can all monitor to see how well these brands are accomplishing that by watching for what the younger generations are flexing.