Bauer Media’s Future of Luxury breakfast yesterday told a tale of the luxury consumer, and how securing their interest is a sure-fire way of securing brand success.
Partnering with The Future Laboratory co-founder Chris Sanderson, Bauer rallied its luxury titles to prove that customer engagement is not dead, in fact it’s one of the most important things for a brand to nail. It’s also a bloody exciting future too.
Sanderson introduced the topic by saying that the traditional markets, while once easy to understand, have “become confused”.
“We’re at the front of a trader generation,” Sanderson told the audience of elite luxury brands and media. “We’re no longer just readers, we are brokers. “We’ve become buyers and sellers ourselves.”
To produce the Luxury Index, Future Labs spoke to 2000 luxury consumers in the US and UK, who Australia no doubt takes inspiration and direction from in its own markets, to enquire about their attitude towards society, culture and luxury goods.
From their answers, they realised there are five stages on the luxury consumer journey, and these are:
- Acquisition & Value
- Discernment & Worth
- Emotion & Experience
- Responsible & Aware
- Intellectual & Poetic
The biggest pools of these five are stage three at 41 per cent, followed by Stage 2 at 17 per cent, with the remaining hovering around 14 per cent of the market.
While stage one entails what Sanderson calls the “I’ve arrived, I can buy, I can spend, look at me” market, he added “the luxury consumer now devotes more spend to experiential luxury rather than traditional luxury”.
These consumers love how products make them feel.
And with this market, the access economy, including Uber, Airbnb, and even the ability to rent clothes and accessories, is growing in popularity, while having more money remains a top priority for almost a third of these luxe consumers.
“The growth of brands allows me to rent a watch for the weekend or even a private jet for that special occasion,” Sanderson said, but noted while this was once the dominant aspect of the luxury consumer, it now only snags 14 per cent of the market.
Stage two, he explained, is defined by “knowledge” and focuses on “storytelling”, whether that’s a scientific story or a romantic one.
“They want to be able to tell their friends and families these stories,” Sanderson said. “[So that] luxury has a longer lifespan.”
Men outnumber women in this stage 58 to 42 per cent, with self-improvement the biggest concern, something Sanderson suggested could come down to a man’s penchant for “bragging rights”, and being able to articulate a higher level of taste and discernment.
“Men do still like to brag, they like the ability to show off a little, and the ability to say, ‘oh yes my suit is bespoke’ or to spot that another gentleman’s suit is not bespoke.”
Stage three, emotion and experience, is “less concerned with emotion and value but more interested in experience, what lies beneath the brand,” Sanderson said, explaining that boomers dominate this stage (46 per cent) versus millennials (25 per cent).
“There is a much deeper relationship with this consumer because that’s what they want. The question for brands is are we delivering that?
Most of us do not know our customer [but] we need to be able to relate to the customer better and touch them in new and different ways.
Sanderson added that brands are still “deeply entrenched in thinking our consumers are men”, but that this is entirely the wrong approach.
“Women are smarter, brighter, better equipped and, let’s face it, often more ambitious than her male counterparts,” Sanderson said, adding that it was worth asking what a woman might like to “spend her bonus on” when it comes to marketing a brand or product.
Stage four is “moving into the future”, Sanderson explained, where we “start to see behaviour that pre-empts what is to come”.
This luxury consumer is searching for experiential value and sustainability, and an “aesthetic that makes us feel responsible and sustainable”.
Aesop is a perfect example of how luxury intersects with accountability, adding a sprinkle of sexiness to this sense of duty.
And moving into stage five, an arena Sanderson said is dominated by millennials, the “relationship with luxury moves towards a notion of self”.
Their relationship with luxury is changing very, very quickly towards the sense of self, and journey, and community, and engagement, and experience, towards this notion of it being quite poetic and also being very intellectual.
“This is where experience becomes very important, it’s about the ability to invest in experience, in trips, and to stay in places that are meaningful,” Sanderson added.
“We have so many more luxury consumers coming into market, that as a brand we may not notice that tendency, that shift, that mental shift with many of our customers because we’re simply going to have more customers in the years to come.
“The future of luxury is digital without a doubt, but it’s also meaningful.”