By: Charlotte Bunyan, CSO, Cult London
After a long year and a half, luxury sales are rebounding, setting most premium brands back on a pre-pandemic keel, at least in terms of revenue.
However, they may be bouncing back to find that their customers are not the same. Most people have become even more digital-first over the pandemic, used to the convenience and immediacy of online shopping after a long lockdown. Digital often democratises brands. This doesn’t always sit comfortably alongside the ‘super premium’ appeal which historically has relied on aspiration, exclusivity and desirability. How can luxury keep pace with its customers without compromising on its brand DNA?
The pandemic has accelerated this challenge for luxury, It was always going to reconcile the need to stay culturally relevant and continue to grow new audiences, especially when it comes to cultivating younger luxury shoppers – who, it is predicted, will make up almost half (45%) of the market by 2025. But now is a key time for luxury brands to re-evaluate what they stand for in the eyes and lives of their consumers, or risk losing relevancy and salience. This shift means overtly standing for something, rather than remaining arm’s length from the many.
High Snobriety defined this shift in luxury’s appeal as moving from social proof to cultural currency; from exclusive to unique; and from buying to buying into. Younger shoppers are less motivated by brand cachet alone, their luxury outlays have to carry meaning, as signifiers of something more than affluence. The same whitepaper found that two thirds of this growing luxury demographic believe that the products people wear demonstrate whether they are culturally knowledgeable. It’s no longer about flaunting what you’ve got, but what that says about you. That’s what this all important aspect of cultural currency means. It’s the new ‘cool’.
It’s well known that experience is everything for millennial and gen z audiences. Multichannel brand activations have further fuelled this evolution of luxury and sense of ‘buying into’ what it conveys. Frontrunners are shaping platform converged experiences to wow and engage audiences. Last winter, Balenciaga released its collection as a virtual game called “Afterworld: The Age of Tomorrow,” in which players were invited to navigate a five-level fantasyland envisioned by creative director Demna Gvasalia. Bridging the experience, it started at a virtual Balenciaga retail store and continued through a forest and a rave. Gucci has embraced Animal Crossing, Roblox and took over TikTok with its Gucci Model Challenge – inclusivity and a willing to embrace the unknown is reaping dividends and widening its audience appeal.
These are still campaigns which touch on elements of exclusivity, but luxury is increasingly being shaped by social commerce and creator economies. Traditional brands could see this as a threat, an erosion of their carefully curated status. This is rapidly outdated thinking. For products not to harness the potential of social status as a core element of the brand may risk the organic sharing of their products occurring anyway, independent of brand involvement. Even stalwarts of the ‘not for everyone’ status brand like Chanel, Dior and Balenciaga have embraced TikTok, for example, recognising that nearly 6billion views and a more fluid, creator-led approach can bring more to the brand than strict brand-led control. As social commerce also rapidly grows, taking a King Canute approach to holding back the social tide risks cutting off brands from revenue. Estee Lauder’s livestreamed campaign for China’s Singles Day led to an estimated $300million in sales.
Digital access combined with physical retail also enables luxury brands to deliver greater convenience for shoppers. Mr. Porter offers premium multi-channel assistance in certain cities to their best customers, known as ‘EIPs’ (Extremely Important People). As well as getting at-home shopping consultations, EIPs can select a ‘you try, we wait’ delivery service. Meanwhile, non-EIPs can access 24/7 customer care or fashion consultations by phone, email, or live chat. Meanwhile, understanding the digital landscape is also helping western luxury brands to gain a better foothold in the East. Burberry’s first social retail store in China’s technology hub Shenzhen is a digitally immersive retail experience made up of a series of unique spaces for customers to explore. Through a dedicated WeChat mini program, customers can unlock exclusive content and personalised experiences and share them with their communities as well as use this social currency for real life experiences in store.
These are frontrunners, leading the luxury pack when it comes to innovating with new digital channels. Savvy brands in this space also understand that they can start small, such as Givenchy launching its latest perfume on Animal Crossing. They don’t have to be all digital, all the time. Forward thinking luxury understands it is not about changing your brand. It is about embracing new ways to connect with people and share their brand story. To do that in the modern era and with the growing younger luxury customer demographic, the price paid is elements of rigid brand control.
Digital more than ever has allowed luxury to truly make personalised experiences, enabling fans to try, discover, explore and connect with a brand in many more ways. To gain the all important buy-in from luxury’s soon-to-be biggest market, It is truly time for luxury to be more inclusive, rather than exclusive.