Global Business Director
Insight | Values
is another luxury
Gone are the days when all Ultra High Net Worth Individuals had similar expectations from luxury. The majority of these people today earned their fortunes (‘new rich’), as opposed to inherited it as it used to be the case in the past. Their self-made fortune means more to them than just financial assets and materialistic treats - they earn in order to experience the world and make it a better place.
Although some of these ‘new rich’ are millennials, there are also other generations that share similar values. Demographics are going out of fashion and luxury brands need to zoom in on consumer interests, values, and passions instead.
Thus, the right balance between pleasing customers with traditional values and appealing to the ‘new rich’ is widely discussed in many boardrooms.
While the ‘right balance’ will look different for each luxury brand and there are many flavours to choose from, the common truth is relatively simple – strategies should remain true to a brand’s DNA and heritage.
Senior Vice President
Cohn & Wolfe
Insight | Engagement
In the luxury world today, we see classic brands embrace an edgier point of view and a bolder, more modern aesthetic to reach new affluent consumers who are younger, more diverse, and more globally-connected. At the same time, those same brands must transmit their rich heritage to maintain the interest and loyalty and of their core customers. To balance being timeless and timely, we see brands playing with limited-edition collaborations with hip and avant-garde designers, partnering with unexpected muses such as social influencers to develop content and collections, and creating immersive offline and digital experiences that bring to life a brand’s values and help new audiences feel part of the brand’s legacy and future.
Insight | Data
Data is a massive area but not a natural one for many luxury brands. In other categories we might have regular conversations about data strategy. In luxury it’s more typically a learning agenda. There is a continuum between brand and performance and, in most categories, brands have a combination of both. In luxury the continuum is weighted to brand, with exceptions. There are brands in the e-commerce space, which are generally wider, more mass, and younger luxury brands. But the real high-end luxury brands are naturally more protectionist about their clients and have personal relationships with their best customers. These brands think they know their customers, but the customers are changing and increasingly from broader geographical areas and backgrounds than ever before.
Managing Partner, Plus
Insight | Experience
Consumers expect more from the luxury brands than the products themselves. They are demanding experiences. Look at Louis Vuitton’s storefront, for example. It’s always spectacular. Maybe it’s the younger consumer who’s going in that direction or simply those who want more—more value for money, whether that’s experience or philanthropy. That exchange is changing slightly from what it was in the past. Philanthropy is part of the brand identity, what the brand believes in, and it is especially important to younger shoppers.
Insight | Democratization of Luxury
Modern luxury elevates,
but can’t afford to exclude
We’re seeing the democratization of luxury in today’s market landscape. Not only do luxury brands have to make themselves accessible to a more diverse audience, they also have to compete against new categories, like experiences and travel. In the work we’re doing in the luxury space, we find individuals who may treat themselves to a nice meal as a reward for a job well done, or get a Starbucks every morning, or buy a membership to an upscale gym. These purchases are considered luxury purchases to them, but luxuries they can afford on a regular basis. The question is, how do true luxury brands play in a space where “luxury items” may be at a lower price point, but still at the high end of their category? The other challenge for luxury brands is attitude. Brands can’t afford to be exclusive or snobby. They may be exclusive by way of price, but they can’t afford to alienate any consumer, no matter if they are a luxury consumer or not. If a brand doesn’t connect with people from all walks, it’s a problem.
Managing Partner, Executive Director
Insight | Status
As neighborhoods become more homogenized with high-income consumers clustering together, we’re seeing a big change in the idea of “keeping up with the Joneses.” It used to be that if you lived in a wealthier area and owned a Mercedes, you’d park it outside to show off. Today in certain zip codes, where everyone has a luxury car, neighbors keep it in the garage to avoid ostentatious displays of wealth. Instead of showing off through fancy cars or clothes, these consumers are engaging in what’s called “competitive altruism.” They’re trying to outdo each other in generosity and altruistic endeavors to enhance their status. It’s important for brands to pick up on this in order to better connect with this audience’s needs. For example, look at what Stella McCarthy is doing with the circular economy - she’s encouraging all of her products to be resold in a second-hand environment.
Insight | Experience
but values change
In luxury automotive we see an evolved experience, where the customer is not buying a product, but rather a membership to an exclusive club. Aston Martin, for example, launched “Art of Living,” a curated portfolio of lifestyle experiences that are normally reserved for a very limited audience. It’s been a productive way for the brand to engage with customers one-on-one. Experiences offered by these brands are becoming super engaging rather than merely passive spectator events. In 2017, Aston Martin China took a small group of their key customers and media touring across 800km of rugged, high altitude Western Sichuan scenery to demonstrate ‘the essence of Grand Touring’ in an Aston Martin. En route, guests visited Tibtan primary school, donating books, and school bags to more than 100 pupils in a remote village, part of the brand’s CSR efforts in the region.
VP, Group Director
Kantar Millward Brown
Insight | Millennials
find niche brands
The luxury consumer is getting younger. Millennials are driving the trends, influencing up and down, generationally. They are redefining what they consider luxury, and it’s less about the traditional brands and more about the niche brands that they’ve discovered. They aren’t necessarily expensive but have rarity in other ways. In the US, these young people are getting to wealth faster and they’re much more ethnically diverse. They often buy into the experience around the product. The classic brands are responding in many ways, certainly by perfecting their e-commerce presence.