Why targeting Millennials is imperative for luxury brands
Millennials are fast becoming the most valuable luxury consumer segment. Together with the younger Generation Z consumers, Millennials are making up more than 40% of all luxury spending and generated 100% of the global luxury growth.
Bain & Company predicts that Millennials and Gen Z will account for nearly half of the total luxury goods sales by 2025, bringing the value of the global luxury industry to €290 billion ($356 billion).
As a result of the pandemic, Helen Brocklebank, CEO of Walpole, thinks the industry will exceed forecasts to generate 25 per cent of revenues online by 2025. “Way earlier, and by 2025 it will be 30 per cent-plus,” she says. “One of the things that’s very exciting is that brands now have a three to four-month dataset they never had before of how people have behaved online, so the opportunity now is to really mine that data.”
As Millennials enter their prime spending years, luxury brands need to understand how Millennials think and shop differently from the previous generations if they want to remain relevant.
Millennial-savvy and digitally-nimble brands are the ones that will win in the business of luxury.
There are four important Millennials characteristics that high-end brands need to cater for:
- Millennials seek self-expression
- Millennials value experience over ownership
- Millennials spend more on brands that are socially responsible and environmentally conscious
- Millennials are omnichannel shoppers
Millennials value luxury brands that celebrate their passions and individuality in a way that can be visually shared on social media.
Millennials are curators and creators, appreciating personalisation and the ability to share their opinion. Millennials value self-expression and they have an unlimited amount of digital platforms to choose from to express themselves. From Instagram to YouTube, Facebook and Snapchat, Millennials share their thoughts, opinions, and experiences with ease.
Exceptional quality is not enough to justify a premium luxury price for Millennials. Luxury brands need to craft an immersive story and provide a unique experience around their products if they want to appeal to their Millennial consumers.
Millennials are said to prefer to spend their money on first-class, authentic experiences rather than material objects. Millennials want to be “living a brand”, both online and offline, instead of just owning a brand.
Millennials can be distinguished from the previous generations for their relationship to the Internet and how comfortable they are with digital technologies. The generation can be defined as having a digitally-infused lifestyle. The Millennial generation is the first to come of age with the Internet and mobile phones. According to Nielsen, technology is essentially baked into every Millennial’s DNA.
As Millennials hear messages from multiple channels simultaneously, they expect a consistent and integrated experience regardless of the touchpoints. They want to be able to switch from one device to another, from online to offline, seamlessly.
It’s important to note that Millennials are greatly influencing the consumer habits of other generations as well, particularly their elders. In that sense, “Millennial” is not just an age group, but rather “a state of mind that affects consumer behaviour across generations” as research firm Bain & Co. highlighted in its report The Millennial State of Mind.
An anchor of the digital transformation, the Millennial generation loves to shape opinions and inform conversations, actively participates in brands’ stories, and expects brands to be connected 24/7. Millennials are the generation of social media. To authentically engage with Millennials, marketers need to communicate their stories and values through a completely digitally-integrated world.
By focusing more on selling an experience rather than a product, listening to what they’re asking for and offering relatable, authentic content, brands can empower Millennials to discover their products or services on their terms.
[Source: Luxe Digital, Raconteur]
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