The luxury market as we know it has its roots in the 17th century in European royal courts, especially the French, which defined the lavish living standards, grandiose arties, summer castles and an endless amount of staff. Handmade products, studded with gemstones, individual perfumers, the best of haute couture and sophistication, have turned into multibillion-dollar corporations and
ubiquitous global brands. The LVMH, Kering, Estée Lauder and Richemont groups lead the ranks of the largest conglomerates on the planet. Under the same command, they bring together fashion, fine watchmaking, jewelry and beverage brands, which together make up a market that will exceed U$S 320 billion in sales in 2021.
Understanding the challenges that this market currently faces means knowing how to work with audiences of different origins and cultural influences, ranging from traditional customers to entrepreneurs, top executives, celebrities and the nouveau riche who ascended to this market two generations ago and enable the big gear of luxury to work.
However, the biggest challenge lies in behavioral changes, such as the growing influence of millennials and generation Z consumers. This audience, which will be the majority of consumers in the luxury market by 2030, takes into account the social and environmental impacts and diversity in its form of consumption. Thus, they gradually move trends towards ethical experiences, with greater human value and in a sustainable way.
Strong drivers of the global market, these generations are also the authority in terms of integration with different forms of technology and consumer channels.
By 2025, it is estimated that more than 30% of consumption in the luxury market will be through digital platforms. Immersive technologies are on the rise, when added to personalized services, own social networks and really relevant experiences, they trace paths to the highest quality of services including new elements that make the essence of luxury even more interesting.
It is possible to verify that the current AAA customer, who dictates new trends, is more discreet and is concerned with the world he will leave for society, regardless of the purchasing power he has. It is an audience that is used to having exclusive access, but does not accept to “get ahead” of other people.
Therefore, if a brand seeks to position itself in this market, it will find its greatest challenge in the “subtlety of the details”. I recommend that companies have a special look to accept cultural differences between countries and regions. Strive to train people to overcome prejudice and genuinely approach each other, understanding differences and empathizing in building relationships.
So, when a bank wants to bring together its young Private customers aged between 18 and 26 to participate in an event with several speakers, it will no longer act as being on a one-way street.
Presenting content and delivering treats is far from being the most appropriate. YouTube, TED and even Spotify are crammed with talks, talk shows and podcasts. If the company really wants to be part of the future of its audience, it needs to sit in the customer’s chair and transform the situation into an authentic experience. It is even difficult to explain, because it has to occur naturally.
Speakers need to get off the stage, listen to the customers’ ideas, interact in a unique way, laugh, talk informally, have a coffee, have lunch and realize that connections arise like this, with a simple and close coexistence. Certainly, this interaction will add up to both sides. So are human relationships.
It is also necessary to pay attention to the behavior of those people who are references for several generations. We recently had an example of someone who doesn’t just draw attention for his victories and titles. British driver Lewis Hamilton is someone engaged in the fight against racism and who knows how to be kind. Just remember his attitude of asking for a Brazilian flag after his victory
at Interlagos racing circuit. His example is even more important than the luxury brands he represents, like Mercedes-Benz. Which makes Hamilton himself an icon, a set of positive values.
Another interesting example of a person who stands out for what he does – not for what he buys, is Bill Gates. His quest to create global solutions such as the eradication of diseases and the accessibility of sanitation systems brought his friend Warren Buffet closer. Together, they built a movement in 27 countries to inspire the world’s richest families to set up plans to donate much of their wealth, earlier and smarter.
Certainly, these two examples bring us to a reflection: When there are no limits in the wallet, what does the luxury customer look for? Everything indicates that the path involves much more the richness of a concept than the brilliance of a diamond. There is a quest for collaboration and simplicity can often surprise the most demanding and discreet customer.
Andreia Mariano
www.linkedin.com/in/andreiamariano
