Take a moment to think about your luxury brand’s marketing strategy. Are you alienating certain groups by focusing on the stereotypical luxury consumer? If your numbers from 2015 weren’t what you wanted, it may be time to do some tough reevaluating.
According to the Shullman Research Center, only 9% of seniors have made a luxury purchase in the past year compared to 43% of millennials.* So let’s take a step back from the stereotype of rich+old=luxury consumer. For many brands, this generalization is easy to get caught up in and rightly so. The logic seems obvious—the rich+old members of society have substantial money pots built up over a number of years that they are looking to spend on quality and exclusive products. However, today this oversimplification is a dangerous one to make as attitudes towards spending and technology have evolved the luxury consumer into something much more complex.
It seems as though everyone is famous today—or at least has the capabilities to act like they are. Just as the paparazzi publishes the lives of the rich and famous across media platforms, we are able to act as our own cameraman by snapping pictures of ourselves and posting them on Instagram, Facebook, Youtube, and countless other mediums. Does this affect the luxury market and predicting the consumption of the mythical “luxury consumer?”
Yes, a resounding yes. Take this piece of data from Trading Economics for example: the personal savings rate in the United States has declined from around 17% in 1975 to around 5% in 2016.† We live in a different age of spending— and generally speaking younger generations are spending more and saving less than our parents—and why shouldn’t we be able to purchase the same luxury cologne that Jay Z wore in his new music video? Trend-obsessed younger generations are more willing to part with their money than those of the past, and their high connectivity to all thing affluent and stylish has the ability to give them more brand envy than ever before.
Let’s also not forget the older generations that don’t quite fit into the “luxury” mold. If I hand you two cards, one featuring an ultra-rich celebrity and one featuring your average middle age/middle-class American, which would you bet owns a Louis Vuitton purse? Most would put their money down on the Kardashians of the world, and being surrounded by other luxury brands that market solely for this tiny ultra-rich group might make you do the same—but keep in mind that everyone is aspirational and can become a luxury consumer from time to time. Instead of focusing on consistent luxury consumers, try to focus on the occasional ones. Think of your Average Joe consumers—like the younger generations mentioned above who are dying to purchase the new iPhone or even the middle class woman who bought a Louis Vuitton purse for her retirement.
Don’t lose these valuable markets, because what they lack in wealth, they make up for in population size. The 10 pairs of Jimmy Choo shoes that Kim Kardashian bought last year in no way equal the 1000s of pairs bought by occasional luxury consumers. Find out where these Average Joes shop on their lunch breaks or weekends and position yourself near them. Make sure that your marketing strategy doesn’t scare them away with ads that scream exclusivity. Moral of the story: don’t rely on the young/old or rich/poor divisions of the past when it comes to targeting luxury consumers. In this day and age, we are all celebrities—and you can bet that we’re going to act like it.