The Boston Consulting Group discusses luxury and the young consumer – WWD

0


The data clearly shows that Gen Z and Millennials differ from other generational cohorts on a variety of barometers of consumer behavior – from expecting luxury brands and merchants to offer options to flexible payments and implement sustainable practices at leading brands in e-commerce digitization and personalization. .

In addition, these young generations should represent more than 60% of the luxury market by 2025, according to a study by the Boston Consulting Group. They are also “certainly more thoughtful and demanding in their luxury purchases than the older generations,” Sarah Willersdorf, global luxury manager at BCG, told WWD.

And, she said, those cohorts can be broken down even further.

“We try to distinguish between younger and older millennials, as younger millennials tend to have needs and behaviors that are closer to Gen Z (often because of the stage of life),” he said. said Willersdorf. “These young generations are true digital natives, more diverse than previous generations, more socially aware – and will boycott brands to offend their beliefs – want personalized engagement, place great importance on store associates and in-person events,” and place great importance and trust in their own communities.

However, from an engagement perspective, what sets these consumers apart isn’t as simple as calling them ‘digital native’ or just pointing to the internet or games.

“On the contrary, what has changed is the increase in creativity and cultural literacy, driven by the use of digital and social platforms,” said Willersdorf. “The result is a new level of sophistication in all aspects of life that manifests higher expectations of brands and products. “

So what do luxury brands need to do to better engage these buyers, retain them, increase repeat purchases, and drive long-term customer value?

“Luxury brands must always respect traditional markers of luxury – such as superior quality, unique design and high storytelling – but they must also allow and encourage a different level of participation and communication,” said Willersdorf. “Gen Z and Millennials look for a branded narrative that evokes the emotions, advocacy of key thought leaders and a consumer’s social circle, as well as an organized assortment and creative partnerships with culturally relevant authorities. Creating a sustainable and ethical business is more and more of a table issue for all consumers. “

At the same time, brands will need to foster an authentic community. Willersdorf noted that while the product will always be important, buying from a luxury brand with a common value system and a tribe of like-minded people is “maybe the new end goal, with the product itself serving as the more and more simply a means to an end. . For young consumers, buying a specific brand or label reflects both their individuality and the community to which they belong.

Additionally, brands will need to engage in strong brand channels for inspiration and purchase. BCG research shows that brand-owned channels such as a brand’s website, physical store, and mobile apps remain among the top five sources of inspiration for consumers and are key to driving purchases .

“Making sure these owned properties symbiotically tell a cohesive story and provide a reason to visit is key,” said Willersdorf. “For example, access to limited or unique content on a brand’s app or website, unique physical stores that can serve as inspiration and shopping destinations, and community clusters are powerful. . It is important to offer flexible payment options: Deferred payment options and installment programs are increasingly in demand among the younger generations who seek transparency and simplicity of payment options. “

Finally, said Willersdorf, brands must test, learn and be prepared to fail, saying that brands willing to experiment with new platforms and new partnerships are likely to create stronger engagement with the next generation.

An example of this is gambling. A recent global BCG study shows that more than half of luxury goods consumers say their perception is positively affected by their favorite brand’s participation in online gambling experiences. And among those consumers, more than a third say it’s because they can better discover new collections and luxury experiences from their favorite brands, while an additional 30% say it would help them express themselves better and to better express their style through their digital personality.

“Savvy luxury brands are increasingly experimenting with things like cultural commerce, augmented reality and social shopping to connect with younger consumers,” said Willersdorf. “These platforms often provide the opportunity to inspire and drive buying. “

FOR MORE WWD BUSINESS NEWS:

Can’t find this holiday gift? Check eBay!

Amex Trendex report reveals plans for happy holiday traditions

Iris Apfel and Shutterfly team up to launch Holiday NFT CryptoCard collection


Share.

Comments are closed.