Hermès gets hip with a Supreme-esque drop of its new skateboard collection
Affluent consumers have new expectations, particularly when it comes to luxury. They want more from the brands that they purchase. This transformation of luxury goes hand in hand with a generational shift in affluent consumers. Millennials and Generation Z consumers are indeed now driving the growth of luxury sales globally.
New consumer trends aren’t just limited to the younger generations, however. Changes are transcending all age groups, including the baby boomers. This is what we call the Millennial-minded transformation of luxury.
For example, affluent consumers increasingly demand social responsibility and sustainable best practices from luxury brands. 73 per cent of Millennials say that they are willing to spend more on a product if it comes from a sustainable or socially conscious brand, according to a study from Nielsen.
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Beyond a brand and its products, consumers also want to live life experiences. Experiences that are unique, authentic, and easily shareable online.
72 per cent of Millennials prefer to spend their money on experiences rather than material objects.
As a result, the high-end travel industry is set to see spending by young affluent travellers reach $1.4 trillion by 2020.It’s no surprise, therefore, that luxury group LVMH decided to purchase the hospitality group Belmond for $3.2 billion.Belmond recorded $572 million in revenues in 2018 from its portfolio of high-end hotels, train services and river cruises. Some of its most well-known properties include the Hotel Cipriani in Venice and the Orient-Express train service.
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Luxury experiences aren’t just limited to travel and services though.
Experiencing luxury can also apply to the high-end goods industry.
For example, by embedding elements of wellness into their offerings, luxury brands from the beauty and fashion industries have been able to deliver a level of experience that goes well beyond their products. Inspiring their consumers to live a healthier life and feel better about themselves.
And it has proven effective. In our recent report on the luxury wellness industry, you’ve read indeed that affluent consumers are willing to pay a premium for perceived wellness solutions.
Four ways to infuse experiential luxury in your product
The modern affluent shopper journey isn’t as linear as it might have been in the past. Digital and the adoption of mobile, in particular, have fragmented the purchase funnel into a myriad of micro-moments.