Whether it’s a graduation, someone’s birthday, completing a successful exam, landing the new job you wanted or simply the feeling that you’ve earned it, new research from Ogury suggests there is more intent than ever behind luxury purchases.
According to the ad tech company, the findings show it’s not just about whether someone has the money to spend. Instead, consumers are becoming more selective about where they put their discretionary dollars, with purchases increasingly requiring “a big reason” to justify the spend.
The shift is particularly pronounced in Australia, where personal reward and celebration emerged as the leading motivation for luxury purchases, rather than status or recognition.
Ogury’s new report, released on Thursday, surveyed 7,466 consumers across Australia, Japan and Singapore, 2,751 of whom were Aussies. It found luxury is still desirable across the region, but consumers are increasingly asking whether a purchase actually feels worthwhile.
Across APAC, 34 per cent of consumers said personal reward or celebration was the biggest motivation behind luxury purchases, compared with just six per cent who cited status or social recognition.
In Australia specifically, the research found luxury is increasingly tied to achievement, wellbeing, lifestyle enhancement, celebration and emotional outcomes.
Ogury country director ANZ Chris Manson told B&T the findings point to a broader change in what luxury means — and how brands need to market it.
“Luxury historically would always be the fancy watches, the fancy cars, the fancy handbags, whatever it might be,” he said.
“But what we started to see, and it was across every market as well, was a far greater importance around experiences, around emotional-based luxury decision making.”
Manson said luxury is “not declining” from consumers’ consideration sets, but the category itself is “widening quite a lot”.
“And I think it’s interesting to see that, regardless of the market, people are still wanting to make these luxury purchases, but they’re trying to find the permission to give themselves to make those purchases.”
Why are these purchases really being made?
That “permission” is at the heart of what Ogury has dubbed the Permission Economy — a market in which luxury purchases are increasingly something consumers feel they need to earn or justify.
The report found consumers across APAC were more likely to associate luxury with personal reward than social recognition, while experiences such as travel, wellbeing and dining are becoming increasingly important to the definition of luxury.
Australia stood out for its emotional relationship with luxury.
According to the research, 34 per cent of Australian consumers cited personal reward or celebration as their leading purchase motivation, compared with 21 per cent for long-term value or investment, 21 per cent for quality and craftsmanship, 18 per cent for memorable experiences and six per cent for status or recognition.
Manson said that ultimately creates a problem for an industry whose advertising has traditionally leaned heavily on prestige, exclusivity and the visual language of status.
“I think luxury marketing has probably been pretty dated for a while,” he said. “I used to work in luxury marketing a while ago, and you’d get creative direction or targeting direction handed down from overseas, and you implement it in your local market, and you just run with it.”
He said the research was intended to give marketers and agencies a clearer understanding of how the Australian luxury consumer differs from consumers in other markets.
“If we can create a stronger rationale back to global markets, say this is what consumers in Australia actually buy, this is how they buy, these are their motivations, then that would be a pretty big win,” Manson said.
Creating campaigns with emotion
If luxury purchases are increasingly about the feeling behind them, Manson said the advertising needs to make room for that feeling, too.
He pointed to Tiffany & Co.’s 2015 ‘Will You?’ campaign as an example.
Created by Ogilvy & Mather New York, the campaign put the proposal itself at the centre of the story, following couples through the anticipation, intimacy and nerves of deciding to get married, rather than simply presenting an engagement ring as the finished product.
It was the human uncertainty of the moment that stayed with Manson.
“I remember an old Tiffany and Co ad… it was an engagement ring ad, and the guy had his engagement ring behind his back,” he said.
“There was this whole secret around how he was going propose.”
Rather than selling a diamond in isolation, Manson remembered the ad for what the diamond represented: the nerve of asking the question, the anticipation of an answer and the celebration that would follow.
“It was the first time that I’d seen an engagement ring ad that actually spoke about the celebration to proposing,” he said.
“Instead of just showcasing the product, it was showcasing the emotional moment.”
For Manson, that is where luxury advertising can find its next shift.
“The emotional part to it… it doesn’t have to be about the product as much as it can be about the emotion and the experience behind it,” he said.
And that experience can start long before a customer ever reaches the checkout.
The implication for luxury brands is that the opportunity may not be to find another way to show the watch, handbag or ring, but to find the moment in a consumer’s life that makes them want to buy it in the first place.
Where is the ‘white space’?
Manson said the opportunity goes beyond changing an ad or rewriting a tagline.
Luxury brands could instead look at the moments when consumers are seeking permission to spend — and find ways to become associated with those moments.
“It could be showing up in those moments at graduations, like you called out,” he said.
“It could be showing up in owning the spaces around promotions or engagements or whatever it might be. It can be far more than just what a print ad or a digital ad looks like.”
That, he said, represents a piece of “white space” for luxury brands.
“There’s white space opportunity, right? There’s white space territory for brands to own the sort of moments a little bit more, own those experiences,” Manson said.
In marketing terms, “white space” refers to an opportunity or territory that has not yet been meaningfully claimed by another brand.
And Ogury’s research suggests there could be plenty of it.
The report found luxury discovery is no longer confined to traditional luxury environments, with consumers encountering brands through recommendations, travel, social media, advertising, retail environments and owned channels. In Australia, travel and recommendations were among the key discovery influences.
For Manson, that means brands also need to rethink where they find luxury audiences.
“You might think about luxury marketing and think about just placing ads in publications like Vogue,” he said.
“But people are multifaceted. They have multiple interests, and they actually cross over.”
‘The buyer today is the person who has saved up’
Ultimately, Manson said luxury marketers need to stop assuming the person buying a premium product is doing so simply to demonstrate wealth.
“The buyer in luxury today is not the model holding a fancy watch or anything like that,” he said.
“The buyer today is the person who has potentially saved up their money for this, to reward themselves for an incredible achievement that they’ve made.”
That creates an opportunity for brands to associate themselves with the moments consumers already see as worthy of celebration.
“There’s a great opportunity for certain brands to almost own those sort of moments or own those experiences,” Manson said.
And it could also change how luxury brands think about competition.
A luxury marketer might traditionally consider another luxury handbag, watch or jewellery brand to be its competitor. But if the underlying motivation is celebration, self-reward or personal enrichment, the consumer could just as easily be weighing up a handbag against a holiday, restaurant or wellness experience.
Manson said brands should therefore focus less on competing against every possible alternative and more on becoming the category associated with a particular motivation.
“If it’s for celebration, then there are many ways that people can reward themselves that may be beyond a handbag or a car or a watch,” he said.
“It’s more around leading the category — category being handbags or watches or whatever it might be — for those moments, for those experiences, for those reward opportunities.”
