There’s a distinct social movement underway not just in Australia, but worldwide – the luxury retail market is evolving, and it’s booming.
The incredible growth of the Chinese middle class, growing consumer confidence in Europe, and increasingly diverse tourism markets world-wide, in a world defined by digital technology, is redefining the luxury market.
A recent study by global consulting company Bain & Co has projected that by 2025, digital native Millennials and Generation Z will account for 45 per cent of the global personal luxury goods market. Why?
Because younger generations have an entirely different set of aspirational values, which, for the first time, have not been strongly shaped on religion and a family-centric ideology.
They think and shop in an entirely different way from our parents and grandparents. They are free-thinking, disruptive, individualistic, and will not part with their cash for any old brand – it must have an authentic narrative, have credible brand supporters or be linked with credible influencers, and they need to know they can leverage it to promote themselves with plenty of engagement by their followers – or even better, have the chance to be re-posted by the brand.
Our parents and grandparents dreamed of getting a good education and a stable job where they could work their way up the company ladder, saving up to get married and buy one house they’d live in for life, and have children who would go to university and follow in their parent’s stable and socially desirable footsteps.
Generations of old wanted to keep up with the Joneses, but Millennials want to keep up with the Kardashians. They also want to become entrepreneurs/fight injustice/explore exotic lands/work in exciting places/move around regularly/wear Chanel and use Kylie Jenner’s Lipkit – whatever it is they’re doing, they’re also likely to post about it (during the most optimum times for engagement of course).
They tend to favour goods, holidays and experiences over saving for a mortgage, are not brand-loyal, expect higher levels of participation and access to brands, and place a remarkably high value on their exposure and traction of their online profiles.
Luxury brands are in the perfect position to take advantage of this narrative- and experience-based movement, by blurring the lines between their goods, commitment to causes, creative storytelling, product diversity, authenticity, narrative and capacity for consumers’ self-promotion.
They’re investing heavily in digital and social media campaigns, with microfilms, rom-com short films, finely-tuned story-telling and behind-the-scenes online tours to build layers to their narrative and convey their brand ethos, as well as creating relationships with business-savvy, influencers and celebrities who can put brand offerings together in an original, daring and authentic way.
This thinking must also trickle down to more mainstream brands, albeit on a much smaller scale. Authenticity, connection, fun and credibility across digital channels will serve all brands better as this generation’s spending power increases.
Your audience feedback is a vital gauge of what your consumers like and don’t like, how they’re getting to know your products and understanding how your products are received, and what resonates with them.
Content-fuelled and interactive commerce that courts shoppers’ digital egos, gives them greater access and connection to your authentic brand ethos, and entices them with wider lifestyle benefits, will become an integral part of marketing strategies into the future.
Have a great week.
Dominique Lamb
CEO