Values, community woo young and female shoppers to luxury brands

By LISA KLEIN

Luxury brands have always gone to great lengths to court new customers, and keep current ones, but a large shift is happening in just how they will need to do that.

Affluent consumers, especially women and younger generations, are increasingly relying on a brand’s values and how they become part of that brand’s story and experience when making purchasing decisions.

“There’s a real shift to conscious consumption from conspicuous consumption,” said Tracey Baldwin, senior vice president for luxury lifestyle media sales at The Wall Street Journal, during Luxury Daily’s Women in Luxury event last month.

“It has to matter,” she said. “Consumers in general, but women in particular, are putting their buying power where their belief system is.”

New money

Women and younger generations are entering the luxury marketplace in large numbers.

By 2030, $30 trillion in assets are expected to transfer hands, much of it to women, in the United States alone, where they already control about a third of that.

Luxury consumers will get younger, too, with Gen Z expected to account for 75 percent of luxury purchases by the same year.

Fifty-four percent of luxury homebuyers under 35 are also women, according to a recent Luxury Portfolio International report.

These consumers are coming to expect some sort of personal connection with the brands they choose to support, through the way they are treated while shopping and are folded into the brand “family.”

“One of the exciting transitions in luxury in the last 15 years is they’ve gone from being the know it all, there was a snooty element to it, to a much more engaging hospitality aspect,” said Marie Driscoll, managing director for luxury and fashion at Coresight Research, during the event.

“Part of it is the casualization of our culture, and it’s also the importance of a younger consumer,” she said. “It’s great to see the market flex and be real. We expect a relationship with something.”

Consumers are putting more of an emphasis on the communities they are a part of, and that includes the brands they buy – something long used as a symbol of oneself.

“People really want to feel like they belong,” said Julie Faupel, founder of real estate network REALM, during the event. “I think that it’s something that, as we see this generational shift in wealth, will continue, because it’s something that really resonates with millennials and Gen Z.”

Consumers in the luxury space expect the things they buy, whether that is apparel or tech or real estate, to come from responsible corporate citizens that fit in with their chosen community.

“It’s delivering on all of the things,” Ms. Baldwin said. “Are you sustainable? Are you inclusive? Do you represent me? Because I’m bringing you into my home.”

It is important for luxury brands to be eco-friendly and sustainable, inclusive of different genders, body types and abilities, and to have a responsible supply chain, or at the very least be working towards those goals.

Story time

Brands are taking note.

Loro Piana, for example, recently announced that each item from its “The Gift of Kings” collection will come with a digital certificate allowing consumers to trace the blockchain of the garment from start to finish.

“The other thing we see is the idea of storytelling,” Ms. Baldwin said. “For women, they want to understand the story behind the brand.

“So if we can put the artisans of the brand out there and let the consumers get to know them, that becomes part of the magic of the brand.”

Hermes is a brand that is known for its craftsmanship, and makes sure its marketing reflects that. It does not stray from who it is, retaining its core customers, yet drawing in a new, younger audience by tapping various artists for fresh designs for its signature scarves.

Louis Vuitton, too, has worked with a number of artists that appeal to millennials and Gen Z.

“It’s fun and youthful,” Ms. Driscoll said. And “it attracts people 20 years old to 60 years old.”

Experiencing a brand goes beyond just its story, with consumers wanting to be a part of that story.

Shoppers want to go into stores again – in China, 50 percent of luxury shoppers are in-store, according to Ms. Driscoll. In-store events are becoming more and more important to every luxury brand.

“[It’s] the idea of the community builder and being able to take an experience and package it in a unique way,” Ms. Faupel said.

“Those boutique experiences are drawing people out,” she said. “It’s exciting, it’s different, activating the people you want in a curated way that makes them excited to come and experience whatever you’re selling.”

Even in real estate, Ms. Faupel said, instead of open houses, properties will host a beauty bar or other pop-up experience.

While traditional marketing tactics are still a big part of exposure for luxury brands, younger consumers expect them to be much more than a brand. They must not just reflect a certain lifestyle, but be a real part of their customers’ lives.

“We choose these brands because they look good, they have great quality, they have values, and in some way in making the choice we’re bringing them into our life,” Ms. Driscoll said. “We’re using them in some way to describe who we are.”