Luxury is relative, they say. By all definitions, luxury is also exclusive. In times when the West discovered new routes to the East, it was in search of this same luxury. The pepper trade, the silk trade, diamonds- they came with a huge price tag. And the ones who were capable of paying for it, flaunted it with pride.
There has always been a basic concept about luxury- from the traders’ point of view. Exchanging a high quality or rare piece of merchandise for the highest price. And for centuries, the high end retail market, that accounted for 390 USD in 2012 (BCG), has been following this system.
But today, the definitions of luxury are changing. It is no longer confined to one group of people. No longer is luxury a statement of wealth. It is now a statement of ‘belief.’ or fashion, style, what have you.
People (read millennials) have started earning in surplus. And they have no qualms about using their earnings to get what they like. The ‘buying on credit,’ or ‘EMI,’ options have never been more used, than they are today.
And retailers are noticing this disruptive power of the millennials. They can feel that their consumers do not want what is conventional luxury. At IntelligenceNODE, we have studied, collaborated with and understood eTailers who cater to this demographic.
We observe a few trends that seem standard, in the world of luxury:
Millennials Pay for a Cause:
Luxury for millennials is no longer about a very expensive product. Yes, they will pay exorbitant amounts to own a brand. But only if the brand resonates with their ideas. They don’t just see the popular ads and make a purchase decision. They see just how much the organization can give back to society. What are their CSR initiatives; or to use other words- the causes they espouse?
According to a recent global report, global millennials from 10 different countries are three times as likely to wear socially conscious brands over luxury brands, and more than 50 percent say it’s important that brands are transparent about their business practices.
Millennials see the WHOLE. Not just Parts
So you have an amazing luxury product. That you know can sell itself. But it may not. Because- millennials today are super connected. And this means they see and hear a lot about your organization. Your product may be great. But if the image presented to the world is not ‘happening,’ millennials will not take what you are giving.
They see everything your organization does. And judge. And accordingly buy.
Social Media Savvy
Millennials like to be connected. They like to know that what they see online- they get offline. Especially when it comes to luxury. They might pay double for a piece of clothing that they like, designed by a particular brand. But they trust your brand because of the social media and just online presence that you can boast of. When it comes to luxury, they pay for an authentic experience that seamlessly connects their own as well as your online and offline entities.
Johnson & Johnson’s recent Clean & Clear #Seetherealme ad videos- an unscripted digital and social campaign showcasing real life teenage girls with skin issues, was a phenomenal success with 10.5 million views since it’s launch.
Luxury must be seen to be felt
When it comes to the millennials, the luxury story is tainted with the age old idea- ‘seeing is believing.’ Luxury for millennials is what they can see, or experience- whether it be real or virtual. They want to see the baristas making gourmet coffee from special coffee beans. They want to see the Michelin star chefs cook and plate their haute cuisine. They want to see the weavers of Kashmir handweave the world famous Pashmina Shawls. They want to see the farmers using the right materials to get the organic yield.
The seismic shift is in the perception of the deluxe. While at one time, it was something to attain, today it is the ‘next thing on my list.’ The greatest asset that millennials have, the great equalizer, is the internet. And smartphones.
So how does one go about nailing the right ‘luxe’mix? What kind of luxury can an eCommerce portal offer the millennial customer in regards retail and apparel? And how to ensure that these particular products or services reach the right people? How to make your products, that do fall in the luxury goods segment, visible and important to the millennial consumer?
There is of course, the conventional way, labeling your products ‘luxury items.’ And creating stories around that. There’s services like Net a Porter- which are created with luxury and millennial consumers in mind. For the uninitiated, Net-a-Porter is a high-fashion retailer that operates via a website designed in the style of a magazine, which gets approx 2.5 million unique visits to their website every month.
But we believe, there is a more effective way to ‘make’ luxury. The internet of things that millennials so love to invest in- from smartphones and tablets to remote activated appliances (and the list is growing more disruptive and amazing every moment); happen to be an investment for creators of luxury as well.
Because it is these inane objects that give power to the proprietor. They relay data, tons of it, every moment, that tells a daily story. And with the correct and timely analysis- in ways never before thought possible, one is capable of recreating the thought behind many an important ‘purchase’ decision.
This is the ‘Me’ generation who defines luxury by their experiences. The ultimate way to connect with them, for any forward thinking retailer is to build an experience. Because these are the guys and girls who individually own a lot of ‘nouveau luxury products’ already. They think the next level is when they don’t have to worry about logistics and planning.
They are not the ones who wish to run around making things happen. They are already used to running around for their jobs and personal lives. When they pay for luxury, they want to be pampered and not bothered with the details. In short, they want ‘experiences.’
Take for instance, Sugar Stars- the TV series that shows the life and times of a modern day Canadian cake shop- which also creates luxury ‘tables’ for clients. They deliver an unparalleled experience- that people love to watch and hear, and maybe even buy!
The question now is, How to create ‘experiences’ when budgets are tight?
The answer is simple. Personalization. Millennials want luxury on demand. And many a times, these demands are not spoken out. But its rather easy to divine the desires of people today- with just a three word brief. Comprehensive, and all over the place data or as it is formally called, ‘Retail Intelligence.’
As the luxury brands become more diversified and more reachable, the impetus is inevitably on creating the perfect on and offline experience that gets the millennial consumer to share, tweet, pin, etc. And in this game, you can inevitably lead with insights on spending habits, lifestyle, and above all interests.
At IntelligenceNODE, we understand the concept of innovative luxury; and we are ready to unearth the secrets that will make you dream even bigger, dear retailer.