If it’s the big bucks you’re after, it seems luxury is the place to be when it comes to a burgeoning market of consumers.
At least that was the sentiment at this morning’s Bauer Media Luxury Futures Forum, presented in conjunction The Future Laboratory, to pin down what brands need to do in order to snag that coveted, cashed-up consumer.
General manager of the Hearst Bauer Media brands Marina Go kicked off the event, showering the luxury magazine offerings of Elle, Harper’s Bazaar, Belle, Men’s Style, Gourmet Traveller and Crystal with praise, before co-founder of Future Laboratory Chris Sanderson took to the stage to talk about the people who read these lush titles.
The luxury arena is growing at the steady rate of seven per cent per year, an arena that has enjoyed a climb of around 88 per cent over the last 10 years, and this is all good news for the industry, Sanderson explained.
The ‘luxurians’ of today consider human connection more important than anything else when it comes to their consumption, and so not surprisingly, they source their information on products and brands from friends and family first, with 23 per cent looking to their immediate social connections before looking anywhere else.
Magazines were the second source of advice (15 per cent) and advertising followed at 12 per cent.
“The luxury consumer now devotes more spend to experiential luxury rather than traditional luxury,” Sanderson said, adding that it’s important to target human engagement now more than ever, given where people are going for recommendations.
It’s about the periphery – what surrounds the brand – so things like a concierge, customer service, and things that relate to the experience are more important.
The future of luxury is digital and meaningful, Sanderson explained, and personalisation is a big trend that elite brands need to adopt.
“What we’re beginning to do now is invest in our mobile phones, and add brands onto our phones, hence the role that apps play, but the next stage of course is that we’re now actually using our phone to do what mobile marketers have wanted us to do for the last 20 years,” Sanderson said.
“Increasingly we are now pushing out to brands, and we are pushing out to organisations, and we are sharing with them in a way that we’ve never done before.”
“We’re beginning to be at a very interesting change with the way a customer can behave with a brand, because technology is at the point of allowing me to let you know that I’ve arrived in store. That I’m here, I’ve turned on my Burberry app, I’ve turned on my Prada app, I’ve turned on my Country Road app, and I’m walking through the store.
I’m here and it’s now your decision as a retailer to decide how you want to treat me.
“For example, if you’ve just walked in, we can now see your shopping history and know that you’ve never actually shopped with us before but in fact you tend to spend about $15, 000 with us annually in three different stores, and I’ve got your sizes and I can see the last 10 purchases that you’ve made.
“And interestingly, when you were in New York two weeks ago you tried on the new trousers from the new collection but they didn’t have them in your size in New York but we’ve actually got them in stock here.
“Now, is that scary, or is that bloody wonderful to know? If you think it’s scary I would suggest it’s time to move out of retail because that’s the future and this is what retail has always been about – knowing your customer.
“And increasingly the technology is going to allow us to do that, and what you’re going to see is how organisations like Bauer and how media platforms will be able to grow those relationships with you, to know your consumers better, to service your customers better, to have more engaging and intimate relationships on a one-to-one basis with your customers so that they feel special.”
“Suddenly we can deliver a service that is commensurate to each and every particular customer and that for us becomes hugely exciting.”
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