The luxury industry is wasting money targeting increasingly obsolete consumer profiles. A new generation of customers has taken centre stage for their buying power and unique relationship to luxury goods. Millennials are emerging as the prime target audience for today’s leading luxury brands. Boston Consulting estimates Millennials exercise around $1.3 trillion in buying power each year. Collectively millennials and Generation Z will represent more than 40 per cent of the overall luxury goods market by 2025.
The success of luxury brands depends on their ability to reach and resonate with these younger generations.
Exclusivity, prestige and impeccable service were always the hallmarks of luxury brand – with a dignified distance between brands and customers. However, brands now need to engage with consumers via social media, and deploy the mechanics of the “mass market” and not exclusive.
Millennials are looking for “exclusive inclusivity” from luxury brands. Millennials want brands to be part of their daily lives, and value those initiatives that grant them true insider access or let them peak behind-the-scenes at the creation of luxury goods.
Instagram, Pinterest and Snapchat are the top social channels that luxury brands need to master for digital marketing. 90% of Instagram users are under 35 years old, 34% of Pinterest users are Millennials, and 71% of Snapchat’s user base is classified as Millenials. A well-considered and powerful social strategy is essential for today’s luxury brand communication, as well as incorporating connective technology such as Augmented Reality and Artificial Intelligence into the personalised consumer experience.
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