Traditionally, luxury products have been tangible things . . . a sports car, high-end accessory, or even an expensive vacation. However, over the past several decades, we have seen a shift in what is considered a luxury good. Rising affluence and social media have influenced the spheres of luxury. We have seen a shift towards individualized and varied forms of luxury consumption. Many are using luxury as a way to define who they are. In 2018, high-end consumers will continue to look to innovative products, unique services, and unprecedented experiences to define what they mean by luxury.
Using Luxury to Define A Generation
In today's marketplace, many companies are courting the 99 million members of the millennial generation. What are these millennials looking for? In a recent Forbes article, the lead author of a 2017 study of the luxury market says that "consuming products and brands is not just a way to say who you are but a way to define who you are." For this reason, millennials have a different way of consuming luxury products than the generation before them. Brands that are attracting the attention of the millennial generation tend to be moving away from old ideals of luxury to new, more creative ways of self-expression and collaboration.
However, many industry experts caution: don't forget the baby boomers. The 77 million boomers still tip the balance in terms of spending impact. This is why a Deloitte report titled Global Powers of Luxury Goods 2017 recommends that companies "bifurcate" their marketing strategy to attract both the millennial and baby boomer generations.
An increased awareness of social and environmental issues, coupled with a depletion of natural resources, has given rise to the "green luxury" trend, especially in Asia. In China, the international luxury group Kering - which owns brands such as Gucci and Yves Saint Laurent - recently launched a tool to measure the impact a certain product has on the environment. By choosing the type and source of material, location the product was manufactured in, etc., consumers can learn about the environmental costs behind their fashion purchase. By using this tool, consumers can make ethical purchasing choices based on environmental impact.
Advancements in technology continue to guide the luxury market, in particular automated commerce. By using machine learning and artificial intelligence, companies are guiding customers to purchase certain luxury items. Take, for example, an online British clothing company called Finery. Finery is using automated commerce to help shape their customers' buying experience. According to a recent article in Forbes, Finery uses a customer's buying data to present a "visual catalog of items that can be organized into looks" and to recommend future purchases.
Unprecedented Customer Experience
In our February 26 blog titled The Latest Addition to the C-Suite: Chief Growth Officer, we briefly touched on the idea of the "customer experience." Many companies are finding that, due to new technology and data-influenced decision-making, a customer's experience is of the upmost importance. This is especially true in the luxury market.
In a recent Forbes article, Allison Samek, CEO of luxury retailer Fred Savage, elaborates on this idea. "Now more than ever, the luxury consumer is looking for an experience. They don't want the same shopping experience they've seen before; they want one-of-a-kind, hard-to-find items that no one else has; and they want to find it in an environment that isn't replicated anywhere else."
At Shugoll Research, a substantial part of our business is answering critical questions and providing actionable direction. Over the years, we have helped some of the world's biggest names in consumer products address challenges ranging from eroding brand loyalty to identifying new product opportunities. Please feel free to contact us today if we can help your company succeed in today's luxury goods market.
The Latest Addition to C-Suite: Chief Growth Officer