The luxury sector is no different. New luxury brands are causing huge disruption in what was previously a much more exclusive brand club. Apple is as desirable as Cartier, or more so among millennials. Luxury brands now find themselves tasked with understanding the behaviours and mindsets of younger consumers and find themselves dared to travel down marketing paths less well-trodden to retain relevance among disruptive challenger brands.
According to Trendwatching’s Future of Luxury report, rising affluence and mobile connectivity has created an “epic shift towards more varied, complex, individualised and meaningful forms of luxury consumption”. For example, the JetSmarter app can be used to book an entire unused private jet for personal use, while in Cancun, high-worth tourists can use the Uber-style Quiero Taxi Exótico app to hire a fleet of Lamborghinis, Ferraris and a vintage Mercedes-Benz.
In its Luxury Study 2017 Spring Update, management consultant Bain and Co was clear that to profit from future market growth predictions, “brands must rethink their strategies and adapt to a millennial state of mind”.
Being able to connect with millennials is vital. Even heritage luxury businesses have a huge opportunity to appeal to younger audiences if they can grasp the new world order, although it may mean re-examining their brands.
Louis Vuitton – a brand which is by no means a boundary-pushing indie label – set out to broaden its appeal through its Spring/Summer 2016 women’s campaign which featured both a skirt-clad Jaden Smith and Lightening, a character from the Japanese Final Fantasy video game, as models. According to Vogue, creative director Nicolas Ghesquiere commented: “We are all living with this new dimension. We are all managing how to integrate these new notions of digital, virtual and cyber with our real life”.
However, the campaign also suggests the fashion house recognises that capturing the attention of a younger audience, and aligning itself with their values, interests and current zeitgeist, is important to ensure its continued success. Game of Thrones’ Sophie Turner will be appearing in SS18’s model line-up along with a re-signed Smith, and the brand has also partnered with skatewear brand Supreme.
So how can luxury brands used to servicing an older market adapt to a millennial state of mind, especially when millennial identities are so varied?
Don’t be tempted to jump to shiny digital and mobile tactical quick fixes. Start with your customer. Start with insight.
Even with this incredibly connected audience, it’s important to bring together both on and offline insights, from sales interactions, focus groups and feedback to social listening and search engine query data. It’s likely that you’ll need to fragment your millennial audience into a number of distinct profiles to generate a more accurate representation of the people you’re trying to reach.
Use these information points as your growth compass and check that your brand, however long-standing, remains relevant to the changing attitudes, behaviours, expectations and aspirations of younger potential customers. If they continue to align, happy days. If not, consider these insights an early warning for all key business operations – including marketing.
Luxury travel and tour operator Kuoni recently partnered with Propellernet to undertake a programme of work that helped it check and challenge assumptions about its audience segments. The brand had already identified various target audiences, from newly-wed millennials to older couples enjoying retirement, and wanted to form a comprehensive understanding of their lifestyles and attitudes.
Using a combination of customer insights including Mosaic profiles, interviews with its team of ‘Personal Travel Experts’ who speak to customers and prospects on a daily basis, and online tools including website data, Hitwise’s Audience View and answerthepublic.com, Kuoni was able to validate its customer segments and deepen its understanding of their lifestyles and aspirations.
One important learning from the research was that luxury shoppers don’t self-identify by using luxury-focused keywords in their searches, which meant keyword research wasn’t a revealing data point. Therefore, AudienceView’s ability to use proxies such as affluence and household income to build out luxury audiences was much more revealing.
By expanding its audience understanding from traditional demographics, Kuoni was able to explore motivations and attitudes that united its audiences, regardless of age, as well as pinpointing important differences.
Mark Fleming, digital marketing manager at Kuoni, said: “Devising a marketing approach that resonates with a broad spectrum of audience segments, from those who are in the midst of their retirement to adventurous young couples, is challenging. A singular ‘catch-all’ comms strategy is never going to work and is at odds with the high level of service, personalisation and quality that luxury brands differentiate on. By bringing together a range of audience data points we’ve been able to build much clearer, in-depth customer profiles. We’ll be using these insights to deliver multiple personalised and highly-tailored customer experiences across our marketing mix and from our very first interaction.”
Luxury brands tempted to jump straight to innovative tactical marketing solutions to reaffirm their credentials and engage younger, connected audiences in a bid to capture attention will reap little reward. Instead, investing in insight to truly understand the next generation of luxury shoppers will lead to robust strategies that create longevity, relevance and growth.
Sophie Coley is strategist at Propellernet.
This article was originally published in The Drum Network luxury special. You can get your hands on a copy here. To be featured in the next special focused on the charity sector, please contact email@example.com.