Money

How Will Millennials Change The Luxury Market?

Posted on June 5, 2015

This is how Millennials like to shop for luxury goods. Got digital? Got social? Got apps? Got it now?
This is how Millennials like to shop for luxury goods. Got digital? Got social? Got apps? Got it now?

Changing Millennial tastes is arguably the biggest manageable disruption for luxury brands going forward. A recent report identifies that Millennials, particularly, “viewed luxury products as expensive indulgences inconsistent with their desire to live in a modest and sustainable way”.

Millennials are a different breed and adapting to their changing tastes in particular will be vital for any and all brands who want to win in this tumultuous market.

Technology will continue to lower barriers to entry for new competitors, and – influenced by Millennials – consumer expectations will rise around issues such as healthiness, authenticity, personalization, and sustainability.

Millennial Girrrrlfriends can shop anywhere!
Millennial Girrrrlfriends can shop anywhere!
For luxury brands, there are three main areas which are most relevant in terms of changing mind-sets that need to be addressed:

LUXURY: Millennials like the fundamental idea of luxury – craft and authenticity – but not the way it’s traditionally expressed, with logos that speak more loudly than the product. That said, millennial luxury can be a mobile device decorated with a stylized apple missing a bite.

APPAREL: For those luxury brands which overlap with apparel, millennials expect selection, style, and price. They want it all. They want it now. And conditions along the supply chain matter to them.

RETAIL: In retail overall – millennials know what they like. They mix and match from a fixed repertoire of brands. Shopping either in physical stores or online is fine, but the experience needs to be fast and friendly.

Rob Alexander, Global Planning Director of marketing communications brand J. Walter Thompson offers this parting piece of advice: “We see change, and we see it massively with Millennials empowered by technology. Historically, you had a product and you sprinkled some brand magic around it. You painted on some values and emotion. The brand values might have been synthetic 10 years ago. Now – and in the future – brand values need to be genuine and authentic.”

Digital Rise
When it comes to raising brand awareness, strengthening the brand and keeping consumers engaged, it comes as no surprise that digital will continue to be key for brands across the spectrum.

The report indicates that spending on digital advertising for one, is expected to comprise more than half of total advertising expenditure in the U.K. this year, an indicator of the significant shift happening in many media markets, including the U.S., the world’s largest.

Mobile in particular, is predicted to inevitably become the control center for all connected systems of communications, and the starting point for brands in terms of both understanding and engaging consumers.

The mobile-centric web will be visual and bitesized (e.g. Instagram) and video will continue to be the predominant media format, albeit, delivered via a diverse system of platforms and content types – each with its own design specifications.

Social media therein, as an avenue for communication and audience engagement, will also define the level of ‘brand love’ and loyalty brands are able to extract from the changing and, increasingly fickle consumer base.

In this arena, this year, the spotlight again goes to Louis Vuitton, which – despite its 161-years – also managed to beat out fellow luxury brands in the SocialZ Ranking, which measures the overall social vitality of a brand in social media. Gucci came in a far second, trailed by L’Oreal and, finally, Hermès.

Source: Millward Brown’s 2015 BrandZ Top 100 Most Valuable Global Brands Ranking/Report via Luxury Society Blog

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