The Definition of Luxury is Being Redefined
At its core level, it seems that the luxury goods market has changed very little. The concept is still very much the same as it has always been. High-quality goods, noted for their craftsmanship and ultimate desirability, are affixed with high price tags to appeal to wealthy consumers. However, it is not just the quality of the workmanship which results in luxury goods selling for higher prices. Another factor which often sees the retail price rise still further is that feeling of exclusivity. With retail prices so high and goods being made in fairly small numbers, those consumers who can afford to be involved in the luxury goods market can feel as if they are members of a very exclusive and unique club.
Rise of the Millennials
The passage of time inevitably leads to change in many aspects of life. People get older and therefore both their needs and tastes change accordingly. Whereas once it was the baby-boomer generation which exerted the most influence over consumer activity, today it is the turn of the Millennials. The Millennial generation is the first of its kind to have grown up in the technology era. More than any other age group, Millennials are at ease with online activity and have a firm grasp of digital technology. As such, they expect something different from their retail experience.
With the advance of digital technology, the retail industry has changed significantly in recent years. Although the rise of online shopping has been nothing short of meteoric, traditional high street establishments are still very much in the game. They have fought back by embracing the online revolution rather than rejecting it. This has led to a multi-channel retail marketplace.
Adapting to a New Generation
In line with the rest of retail, the luxury goods sector has come under heavy pressure to adapt to the needs of a new generation. The majority of Millennials are now reaching the point in their lives where they can afford to invest in luxury products. Already it is estimated that the Millennial generation has over $200 billion of spending power at its disposal, a figure which increases still further when influence over parental spending is added in.
Many luxury brands are already adapting their marketing strategies in order to capture the imagination of the Millennial generation. Advertising campaigns are beginning to feature younger personalities, and there is a definite shift in focus, with much of the attention now on the use of digital technology.
The luxury brands which stand the best chance of moving successfully with the demands of the new shopping generation are those which do not move too far away from their existing brand image. Although the majority of Millennials are attracted to companies which embrace digital technology, they still believe that heritage is important. Perhaps the ideal luxury brand for today’s retail audience is one that keeps pace with modern technology without moving too far away from its heritage.