Millennials Redefining “Luxury”
Born between 1980s and 2000s, millennials, or Generation Y, are now coming into their own as financially independent consumers whose voices can easily dictate the success of a business. Luxury companies in particular understand the economic potential of Generation Y, which will soon have the disposable income to invest in expensive goods.
Pam Danziger, president of Unity Marketing, has studied the behavior of this demographic and found that millennials want something more “personal, democratic and inclusive.” They respect the traditional meaning of luxury, although they don’t relate to it. To them “luxury” is just a marketing term used to justify the high price points of branded goods and services. They do not chase materialism, but instead, they embrace experiences. They want to feel, sense and be a part of the brand. The shift in valuing tangible objects to caring more about traveling and dining with friends reflects their desire for authenticity.
Millennials grew up with resources at their fingertips–any snippet of information a tap or click away. This access has expanded consumers’ awareness of various brands and their practices. It is not enough for brands to approach the mass market with a one-size-fits-all strategy, as consumers will divert their attention to something more personally meaningful.
Today, millennials shoulder millions in student loan debt, so they are very sensitive to price. No company wants to risk isolating or losing millennials as customers, especially at a stage in life when brand loyalties develop. Brands must adapt to the tastes of this rising demographic cohort to offer new, exciting experiences that are directly relevant to them.
Burberry exemplifies the luxury sector’s campaign to appeal to millennials in an age of globalization. The brand, having had a grasp of what the Generation Y values, found a way to target young consumers. Its London store, which opened in 2012 with 4,000 square meters of merchandising space, shows how Burberry.com was brought to life. Interactive mirrors that transformed into personalized screens, and live streaming of global events and runway shows represented the “celebration of British design and craftsmanship.” This is what fascinates, engages and pushes younger consumers towards purchase. They feel connected, entertained, can sense the authenticity of the brand. It is not just a shop. It is a space to hang out, to have fun.
In the summer of 2013 the brand partnered with Google to create “Burberry Kisses,” an application and website that allowed you to send digital lipstick-stained seals on envelops anywhere in the world. It channeled a youthful spirit of happiness and helped to solidify Burberry’s reputation for creative marketing. At the same time, the Burberry Acoustic project was created, featuring short films of “British up-and-coming musical talents," selected by Burberry’s own CCO.
In the states, Rebecca Minkoff has successfully reached millennial-aged consumers. Last year, she opened high-tech stores in Los Angeles, Chicago and NYC with an emphasis on experiential retailing. By simply touching the fitting room mirror, the shopper can request a new item size, a glass of wine, and she can even create her own profile to see what she has tried on or previously purchased. During her runway shows, Minkoff used GoPro cameras to take audiences on a tour of the backstage and preparation process, which gave a more personal and unique touch to her relationship with consumers.
Last, but not least, millennials are very aware of current global issues. They gravitate towards brands that align with their personal beliefs about corporate responsibility. Issues like environmental sustainability and ethical labor practices have moved to the forefront of their decision to purchase. Transparency in pricing has also become a trend that consumers, with historically high education levels, have demanded. “Millennials are almost three times as likely to look to work for a company because of its social and environmental practices," said Josie Tutty in the Luxury Daily.
All in all, Generation Y is the one to outline the future of luxury. They are an essential part of it now and brands have the responsibility to create meaningful relations with millennials, or risk failing in an ultra-competitive global economy.
Image credit: TMagazine.
