As with every other thing, the luxury industry has undergone big changes post-COVID. There are newer trends, but more importantly, a new buyer persona – largely responsible for the new trends driving the industry – has emerged. Bulgari CEO, Jean-Christophe Babin, and McKinsey senior partner, Aimee Kim, discuss who this new luxury customer is. Their focus is on the female sub-group, but the insights are largely applicable to the wider audience.
1. The average luxury consumer is younger.
While Babin and Kim are more focused on customers based in China, which for now is where luxury brands have a bigger consumer base, it is important to note that more and more young people are amassing wealth through non-traditional means.
Social media has brought about the rise of influencers and affluencers who incidentally are getting younger these days. (In 2020, Ryan Kaji was named the richest Youtuber. He was just nine at the time) There are also crypto investors, gamers and members of the tech community whose wealth is rooted in current technologies as against the stock market or traditional jobs. And they are largely young people below the age of 30.
2. Today’s luxury consumer will consider logical what years ago seemed expensive.
A decade ago, a €1000 ring will be termed expensive. Now, with highly disposable gadgets going for that same amount, the average luxury consumer will most consider a ring at that price a good investment, especially seeing as it is likely to last longer and retain or supersede its value over time.
This does not mean that luxury businesses can slap high prices on their products/services. It does mean that they should not be scared to give prices commensurate with the total value of their offerings in so far as they can communicate this value to their target audience.
3. The current luxury consumer is independent and knows exactly what they want.
This applies more to the female demographic but may extend to others.
In the past, the female luxury customer was one who was viewed as the recipient of gifts as against one with the money buying exactly what they wanted. Today, it is different: she is in charge of her finances and is the one making the decisions. She knows exactly who she is, what she wants and how she wants her purchase(s) to work for her.
4. Luxury customers today are more bothered about what the brand stands for than what it says it is.
It is no longer enough for luxury businesses to say they stick to the highest standards of quality and are excellent in all that they do. What they stand for, sustainability practices, how they give back to society… all these form part of the decision-making process of the current crop of luxury patrons.
5. These days, purchasers of luxury goods are tech-savvy and have access to a plethora of information.
This ties to point No 3, and it is a reminder that brands have to be as honest, transparent and upfront as possible. It also means that they must be at the forefront of information about their products and services.
This may explain why Bottega Veneta shut down its social media pages and created its own platform to disseminate information about its products.
6. They love local luxury
Or luxury brands that are localised.
You may blame the pandemic for this, but in reality, long before the global lockdown of 2020, more buyers wanted to see themselves represented in the products or goods they purchase.
Luxury customers now want brands that are not only close enough to them, but that are also tailored to their needs and wants and can communicate with them in a way they can relate to.
7. Trends are great, but luxury customers today will go with brands that do not lose themselves to them.
AKA, luxury brands that will go with what is popular now while still remaining authentic.
It is ok for luxury businesses to take their retail online; get into the world of gaming and explore NFTs. But even as they meet their target audience in these places, the average luxury customer will still want to shop in-store and use the products in real life. Businesses should remember this, and not lose themselves to emerging trends that come and go.
