No matter how much the luxury market changes, the definition of luxury remains. It’s a highly desirable, indulgent product or experience, usually with a higher price tag and often rare to obtain.
While the definition of luxury hasn’t changed, the way in which consumers—particularly Millennials and Gen-Z—interact with the luxury landscape has fundamentally shifted, and brands must find new, creative ways to reach these demographics and gain their attention.
Create an Interactive Experience
How consumers interact with brands has changed dramatically because of technology, social status and a shifting attitude toward their relationships with brands. Consumers are more demanding, involved, and expect much more from their brand experiences.
At the luxury-end of the market, retail remains an extremely valuable touchpoint, so luxury brands must find ways to reach consumers in the physical world as well as online. Consumers want to go to a store and feel like they’re a part of that brand’s story, so brands are relying more on creating exclusive retail experiences and Direct-to-Consumer interactions.
Beauty brands understand this all too well. L’Oreal’s acquisition of Modiface, or Shiseido’s of MatchCo, are perfect examples of established brands buying technology to enhance the shopper experience at physical stores. In this case, using augmented reality to create a highly interactive and personalized service.
Commit to Eco-Responsibility
As time goes on, consumers are looking for brands to behave more responsibly when it comes to material waste and sustainability practices, so brands are having to make these shifts very rapidly.
There is a growing backlash, often starting with bloggers and influencers, against the amount of waste that comes with the packaging and shipping of products, or in the case of cosmetics it is often the products themselves. Consumers are increasingly using social media to call out brands or retailers for excessive packaging or using materials that harm the environment.
More and more luxury brands are taking a proactive approach. One luxury example is L’Occitane, which now ships their products in recyclable, refillable pouches as a method of reducing plastic waste. Another is Stella McCartney, who has integrated sustainability into the business, from using recycled nylon for bag linings to becoming a member of the Ethical Trading Initiative (ETI).
These kinds of practices may have been unexpected for a luxury brand to initiate five years ago, but now, due to consumer demands, luxury brands are seeking ways to be more responsible. Concern for the planet and its people is no longer at odds with the world of luxury.
Utilize a Variety of Cultural Influences
The influence of Asian culture continues its steady rise and emergence in every avenue of the luxury market, reshaping luxury sectors like airlines and hotels, with global brands levelling up their service to meet the expectations of well-heeled Asian consumers.
Fashion and beauty have been quick to embrace a variety of Asian cultures to remain relevant. This is clearly manifested in packaging and marketing campaigns. But we can also see changing beauty rituals as well. The 10-step Korean beauty routine, new regimens and innovative ingredients and technology is spreading from Asia to the rest of the world.
An example of this is Anthem’s recent work for Ponds’ Thailand, creating a new “Instagram-worthy” range to target the Gen-Z audience (shown above). By collaborating with a well-known Thai beauty influencer, Ponds’ new packaging created an authentic connection with a new, social media savvy generation, which elevated the brand experience for both online and offline shoppers.
But luxury brands need to do their homework when engaging with different Asian cultures. High profile missteps, such as Dolce & Gabanna’s insensitive campaign for China, illustrate how a lack of genuine cultural respect can not only miss the mark -- but create hostility towards the brand.
Connect on a Personal Level
A notable trend in luxury that high-end consumers are now gravitating toward are those that bring a human touch to the buying experience. Connection is so scarce now that direct contact with a person is, in a way, a luxury item in itself. Customers are seeking things like concierge services, or even connections to the founder of a company, to make the experience feel more personalized. Creating a sense of closeness and a deep human connection is what ultimately brings high value and prestige to a brand.
Tiffany’s opening of the Blue Box Café in New York is a prime example of how creating a tangible experience can bring luxury consumers closer to very essence of the brand, in this case reliving the film that elevated the brand to iconic status.
Another example is Frederic Malle, a self-described perfume ‘editor’ collaborating with some of the world’s foremost perfumers or ‘authors’.
Every facet of the brand experience uses storytelling to bring the customer closer to the individual creators, allowing them behind the scenes to witness the creative process, watch personal interviews and delve into their personal stories. The faces and voices of the editor and his authors are integral to the customer journey, from portraits in the stores, to rich social media content, to in-person events.
This level of personal contact is more valued, more engaging than any amount of technology or convenience. It places authenticity and creativity, once again, at the heart of true luxury.