Gen Z and Millennials Are Obsessed with Collectibles: Here’s How You Can Join In

The Resilience of Collectibles in a Shifting Luxury Market

As the global luxury goods market faced challenges in 2024, a fascinating trend emerged: the increasing interest in collectible items such as watches, wine, and handbags, particularly among younger members of the ultra-wealthy. This shift reflects a broader philosophical change in how wealth is perceived and invested, moving beyond traditional luxury goods to embrace collectibles as viable asset classes.

A New Perspective on Collectibles

Drew Watson, the head of art services at Bank of America Private Bank, articulated this transformation, stating, “There has been a philosophical shift from viewing art and collectibles as purely a passion. Now people are seeing that there’s real economic value and are thinking of them as an asset class.” This perspective is gaining traction, especially among younger generations who are increasingly recognizing the potential financial benefits of investing in collectibles.

According to the 2024 Bank of America Private Bank Study of Wealthy Americans, a striking 65% of respondents expressed interest in collectibles. However, this figure soared to 94% among individuals under the age of 44. Millennials and Gen Z are not only more inclined to collect but are also twice as likely as their older counterparts to invest in items like watches, rare wines, classic cars, sneakers, and antiques.

Market Dynamics: A Tale of Two Trends

The luxury market’s overall performance in 2024 was mixed. The Douglas Elliman and Knight Frank Luxury Investment Index reported an alarming 18.3% decline in the value of fine art, marking a significant downturn compared to the previous year’s double-digit growth. This decline was even more pronounced than during the COVID-19 crisis, which saw a 17% drop in values.

Conversely, the report highlighted a contrasting trend: small but notable growth in the markets for handbags, jewelry, coins, watches, and cars. For instance, the iconic Hermès Birkin bag, particularly in black Togo leather, has reached unprecedented values in the secondary market, showcasing the resilience of certain collectible categories amidst broader market challenges.

The Digital Advantage

One of the key factors driving younger generations’ interest in collectibles is the digital nature of these markets. Watson emphasized that collectibles are more readily transactable online compared to fine art, which often requires a deeper understanding and context. “With fine art, you have to have a certain context and education to really understand what is out there, what your tastes are, and how to access them,” he explained.

In contrast, collectibles like watches, handbags, and wine are more accessible. Their value can often be distilled into key attributes, making them easier for new collectors to navigate. This accessibility is crucial in attracting younger buyers who may feel intimidated by the complexities of the fine art market.

Auction Houses and the Collectibles Gateway

Auction houses are taking note of this trend, increasingly investing in luxury collectibles as a means to engage new collectors. Watson referred to these items as the “gateway drug” into the world of higher-value fine art. By introducing clients to collectible watches and Birkin bags, auction houses can educate them about the broader art market and potentially upsell them on paintings and sculptures.

This strategy is mutually beneficial; sourcing high-value consignments of fine art can be a daunting task, akin to “looking for a needle in a haystack.” By focusing on collectibles, auction houses can create a more accessible entry point for new collectors while also expanding their client base.

Conclusion: The Future of Collectibles

As the luxury market continues to evolve, the growing interest in collectibles among younger generations signals a significant shift in investment strategies. With their digital accessibility and tangible value, items like watches, wine, and handbags are not just status symbols but are increasingly viewed as smart financial investments.

The 2024 trends suggest that while traditional luxury goods may face challenges, the collectibles market is poised for growth, driven by a new generation of collectors eager to explore the intersection of passion and investment. As this landscape continues to change, it will be fascinating to see how these trends shape the future of luxury and investment in the years to come.