The millennial market has changed everything, from how we live our lives to even the definition of luxury itself. Once the market that bared the brunt of ridicule, it is now the generation with the largest purchasing power of any that has come before it. Their generation is expected to account for approximately 45% of luxury purchases globally by 2025, and yet their definition of luxury is vastly different than those that have come before it.
In many ways, this is great news for the luxury industry, which has seen a slowing down in sales in recent years. The only issue is that they are not taking the spending power of the millennial generation and that of its follow-up generation, Generation Z, seriously. Far too many luxury brands have held fast in their views of luxury and their ways of conducting business, and this is the severe detriment of their growth and performance.
Take Their Values into Account
Traditional business models will not appease these new generations, and likely won’t appease the ones to come after. Not only do luxury brands need to create a superior product in both design and function, but they also must adhere to the very strong values of these generations. To put it simply, these young generations have grown up in a world where climate change and political unrest have shaped their existence, and they know that it is up to them to change it.
Hence, the changing market. Luxury brands, in particular, have no wiggle room in this new definition of luxury. Luxury, to them, means more than good design, it means being conscious and harmonious with the world. For fashion and jewelry, this means only using sustainable products. It could mean ensuring that the fashion production line is fair to all and does not cause chemical waste, textile waste, or even carbon emissions. In the jewelry industry, this means using only clean diamonds, such as lab grown diamonds, that no one had to die over.
A great example of luxury brands turning to sustainability is Stella McCartney, who is known for her commitment to ethical fashion. McCartney partnered with Parley to raise awareness about marine pollution, and both McCartney and Parley created a limited-edition Parley Falabella GO Backpack, made from recycled polyester fabric that’s crafted from plastic reclaimed from the ocean. The Parley Falabella GO Backpack proved successful, with today’s younger consumers wanting to invest in brands with a purpose.
The luxury of the future is clean, and therefore brands must change how they produce to ensure that their production creates no waste and instead bolsters and improves the community where it operates.
How to Communicate with The New Generation
As for how to market to this generation, it’s simple: use the power of technology to better your marketing tactics. There are two facets to this; one is digital marketing and storytelling, the second is e-commerce selling and AI personalization. These two trends have been growing in recent years and have transformed the consumer into an individual. It is through these two methods that brands can create lasting relationships with their target market, and in turn, see repeat sales and even the power of word-of-mouth marketing.
This is true for middle-market brands, and it is true for luxury brands. Take the luxury watch industry, for example. This industry has enjoyed long-standing tradition since the invention of the wristwatch in the late 1800s and its patent in the 1900s by Rolex founder Hans Wilsdorf. Since then luxury watches have been a part of nearly every historical event, from world war to breaking the world records again and again.
Luxury watches are tradition, and yet the industry is failing to meet the needs and demands of the consumers. There are two core issues that the luxury watch industry must take into consideration: the rise of e-commerce and the true impact of marketing.
This lack of focus on those two aspects is clear most prominently in the United States. Americans exist in an attention economy. You need to be big, bold, and you need to make your statement to have an impact on the world’s largest luxury market. You need to offer the best in service, both online and in person, and you need to do it with the future in mind at every step.
Most luxury manufacturers fail to recognize this and instead employ their traditional cultures and values on the voracious American market. Between this and the severe micromanaging, it is no wonder that up until now the American luxury watch market has been suffering.
Most recently, however, the luxury watch retailer Bucherer has set out to change that with their acquisition of the American watch retail company, Tourneau and it’s 28 locations that have been opened throughout the United States. This continues a longstanding tradition of innovation within a typically traditional industry, as Bucherer have previously assisted five major luxury brands in bringing their product online for the future markets. From Cartier, IWC Schaffhausen, Audemars Piguet, Officine Panerai and Hublot, each of these brands can expect an increase in sales and visibility.
To continue this positive trend, further research into new market trends and how these brands can better communicate with each target market is necessary. From influencers to narratives, marketing and e-commerce must come together in a harmonious and seamless enterprise.