Millennials have become a coveted demographic for luxury brands to capture. Here, innovation research & advisory firm, and new Luxury Society knowledge partner, Stylus exclusively reviews the key digital strategies to attract their attention.
Digitally savvy millennials will soon outstrip other demographics when it comes to buying luxury goods, making them an audience that premium retailers must embrace.
From enabling self-promotion to mobile-friendly formats, here, we review key digital strategies for enticing young and future luxury consumers.
“ Millennials will become the largest generational segment in the luxury market ”
Summary – 5 Things You Need To Know
1. A Valuable Tribe For The Luxury Sector
According to American market research agency Unity Marketing, millennials/Gen Y consumers (people currently aged 18-34) will become the largest generational segment in the luxury market in the US between 2018 and 2020.
The figure is supported by data from the American Express Business Insights (AEBI) report, published in February 2012. This revealed that in 2011, US millennials increased their spending on full-price luxury fashion by 33%, and on luxury jewellery by 27%. These were the biggest gains in spending for any age group – making it a segment that luxury brands cannot afford to neglect.
2. Self-Focus: Personal Profiles Become New Status Symbols
Whether its shoot-and-share photo booths or interactive social media ad campaigns, retail experiences that cultivate individuality or aid self-promotion are essential for targeting millennials, for whom online profile is just as important as bank balance.
“ Millennial consumers expect higher levels of participation and access to the brands they deal with ”
3. Exclusive Inclusivity
The direct connections fostered by social media mean that millennial consumers expect higher levels of participation and access to the brands they deal with than their generational predecessors. This heightens the value of initiatives that grant insider access or reveal behind-the-scenes creative processes.
4. Editorial Content Boosts Engagement
Heavily editorialised soft-sell e-tail platforms are helping luxury brands to convey their heritage, brand ethos and contemporary relevance to millennial consumers, who are already highly accustomed to lifestyle-focused, contextualised commerce. See also Shoppable Content.
5. Mobile Is A Must
With mobile commerce expected to grow 30%+ by 2019, according to global research firm eMarketer, luxury retail experiences optimised for mobile are swiftly becoming a necessity. For the ‘always on’ youth sector, mobile expectations are especially high; according to a 2014 study by global information services group Experian, mobile usage is 14% higher for millennials than older consumer groups.
Celebration of Self Beats Traditional Rewards
Coined by American writer Michelle Miller, ‘muppies’ (millennial yuppies) are a rising group of post-recessionary, educated, social and outspoken 22- to 35-year-olds, who – unlike their ‘yuppie’ predecessors – care more about exposure and their online profiles than money. Shrewd luxury brands are pursuing this emerging demographic via self-centric, branded, online or social media experiences.
• Bringing social media in-store, German fashion designer Karl Lagerfeld has installed photo booths in the fitting rooms of his Amsterdam and London flagships, where consumers can apply ‘Karl-inspired’ filters to ‘selfies’ before sharing them on social media.
Pier Paolo Righi, chief executive of Karl Lagerfeld, told Stylus: “The key in making the online shopping experience more engaging for the younger consumer is to be reactive in real-time – the consumer sees something that is happening or is of relevance now and shares it with the world. We see this through the digital activity in our bricks-and-mortar stores and online – a true shopping experience should always be an Instagram and Twitter-worthy experience.”
“ The key purpose of the ‘I Am Porter’ app was to forge a direct allegiance with individuals ”
• US jewellery brand David Yurman’s ‘Imagine’ initiative promises profile-raising rewards to consumers who post selfies of themselves wearing the brand’s jewellery to either its own website or social networks like Instagram and Twitter. Those that do have the opportunity to be named a DY Style Leader (flagged up on its e-commerce site) and also to help curate the brand’s holiday gift collection.
• In March 2014, multi-brand fashion e-tailer Net-A-Porter celebrated the launch of Porter – its digitally shoppable debut print magazine – with an ‘I Am Porter’ app that allowed users to place their face on the magazine’s cover and share it on Facebook. While participants had the chance to win Net-A-Porter vouchers, its key purpose was to forge a direct allegiance with individuals by allowing them to self-promote.
• US fashion brand Calvin Klein is currently reposting selfies of fans wearing CK underwear accompanied by the hashtag #mycalvins on a live Instagram feed on its website.
• Demonstrating how to monetise a selfie-focused marketing campaign, Italian fashion label Pucci has released a Scarfie app. It allows users to personalise their selfies by adding a Pucci scarf to the shot, positioned around the neck or as a headband, and then to share them via social media. Creating an easy transition from play to purchase, the app automatically adds a clickable link below each look that redirects consumers to Pucci’s e-commerce site.
Dean Fankhauser is co-founder of premium social wish-list e-commerce platform Nuji, whose core audience consists of millennials. He told Stylus: “Everyone wants to be retweeted or repinned; it’s social validation and the ultimate in massaging our digital egos. This need for social validation has been prevalent among all generations, but never has it been so visible since the advent of these technologies that are enabling us to show our more narcissistic side. Because millennials are the first to adopt these new social platforms, they’re showing us, and are responsive to, all sorts of creative ways that our digital egos can be massaged.”
“ Millennials have heightened expectations about participating in brands’ creative processes ”
Insider Access Shows Modern Side of Luxury
Fuelled by the groundswell of social media and ‘access-more-areas’ digital forums, millennials have heightened expectations about accessing or participating in brands’ creative processes. A handful of luxury labels are adopting a carefully mediated level of accessibility in order to foster engagement with younger, future consumers without alienating existing clientele.
• Italian fashion house Fendi is consciously aiming to entice younger, info-hungry consumers with the launch of a bimonthly column – Fendi Confidential – on its e-commerce site. Curated by British stylist Charlotte Stockdale, the visually led column serves as a portal to industry access – offering behind-the-scenes access to photo shoots, backstage videos and interviews with models and others in the creative team.
• French fashion brand Louis Vuitton has developed an app dubbed ‘Pass’ that unlocks behind-the-scenes photo-shoot content, detailed product information and a store locator. Users simply scan printed Louis Vuitton ads (featuring a special Pass icon) with their smartphones.
• British fashion house Burberry gave fans on Chinese messaging platform WeChat access to the A/W 14-15 London runway show, providing audio commentary from industry insiders such as Burberry’s creative team and Chinese celebrities.
• In November 2013, LA-based fashion label Juicy Couture previewed behind-the-scenes images from its S/S 14 campaign to 2.5 million fans by debuting Snap Stories – a new feature belonging to photo-sharing app, Snapchat. The brand was able to send a stream of images that lasted up to 24 hours, as opposed to Snapchat’s usual service, which automatically deletes images in 10 seconds.
• In February 2014, US fashion brand Tommy Hilfiger became the first to use its catwalk show as the subject of an ‘InstaMeet’ – gatherings of Instagram users in the same city, who create content together that’s streamed from one place. It invited 20 influential NY-based Instagrammers to document its New York Fashion Week A/W 14-15 show to give the brand’s social media audience a unique glimpse of the proceedings backstage.
“ This behind-the-scenes narrative gives millennials something to attach to beyond the name of the brand ”
Megan Wintersteen, lead planner at New York-based digital agency Huge, told Stylus she believes such schemes can help younger consumers find a gateway into the sometimes seemingly impenetrable world of international fashion brands. “This behind-the-scenes narrative gives millennials something to attach to and self-identify with beyond the name of the brand; it’s giving the brand additional layers for shoppers to assimilate with.”
For more on maximising catwalk shows, see Catwalk to Closet and Fashion Week 2014: Social Media & Tech Partnerships.
Content-Fuelled Commerce Charms Gen Y
Editorialised, content-wrapped commerce, which presents not only a shopping opportunity but also a wider pool of inspiration, is a key way of engaging millennial consumers who are increasingly attuned to shopping via non-traditional, inspiration-based sources. See our Shoppable Content reports (Publishing and Entertainment).
Chris Mason, strategy director at UK social media agency We Are Social, told Stylus: “Luxury retail has always been driven by storytelling. Knowing the stories, methods and people behind a product always helps to create perceived value. Those stories are now delivered through blogs, videos and Instagram feeds.”
• Italian fashion label Missoni has injected editorial style content into its website in the form of an online magazine – Missoni Moments – conceived to showcase the brand’s wider ethos. The highly visual, fully shoppable e-mag is created in collaboration with bloggers, illustrators and photographers and consists of fashion features, social media updates and interviews with creatives including writers and artists.
“ The audience is more interested in the richness of the story behind the brand and products ”
• London department store Harvey Nichols has also traded on the lifestyle sell by mixing editorial features with social media content on its new homepage, which includes scrapbook-style notes and hashtags alongside more traditional product directories, firmly aligning itself with the digitally savvy language of Generation Y.
“The rise of lifestyle content is due to the importance that millennials place on the narrative of the brand,” says Wintersteen. “It’s no longer about buying a luxury brand for the name’s sake; instead, the audience is more interested in the richness of the story behind the brand and products.”
Luxury M-Commerce: A Must For Millennials
With mobile fast becoming a critical shopping tool for millennials, brand experiences of all types must be attuned to an in-transit, mobile mindset – including those orchestrated by luxury brands. A handful of forward-thinking premium retailers have already begun sharpening their mobile capacity.
• In 2013, Italian fashion house Gucci quadrupled its mobile revenue as a result of launching a mobile commerce website, which entices consumers with bold visuals and an easier-to-use interface.
• Similarly, French fashion labels Louis Vuitton and Lanvin have optimised their websites for mobile, mirroring all the content consumers can find on their main websites. This not only includes e-commerce directories, but also videos and store location information.
Court The Digital Ego To Boost Engagement
The millennial mindset is particularly responsive to digital initiatives that offer an opportunity for individuals to raise their personal profiles and seek validation from their peer groups. From showcasing selfies on a luxury brand platform, to offering fans a publicly visible spot as a brand-influencer, use new communication platforms to trade on the digital ego.
Access More Areas
Social media has propelled the consumer appetite for behind-the-scenes, insider access to huge proportions – and never more so than within the millennial mindset. Offering glimpses inside your brand world can bolster overall brand dialogue and offer a way for luxury brands to embrace younger and/or future consumers without alienating existing clientele.
Talk To The Lifestyle, Not Just The Consumer
Millennial consumers are already well attuned to the premise of shopping via non-traditional, inspiration-based sources such as shoppable print magazines, and expect to see retail enhanced by content. Entice millennials by emphasising the wider lifestyle aspects of your brand stories.
To further investigate the millennial consumer and brand innovation on Luxury Society, we invite your to explore the related materials as follows:
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