THE CHANGING WORLD OF LUXURY RETAILING
TEN YEARS AGO, brands used to be able to segment
customers in 2 to 3 categories, but now a singular
definition of a luxury customer is being shattered. The
new luxury consumers are younger, better-informed,
ethnically diverse, tech savvy, more educated, have
household incomes more than the national average,
and lead complex multi-tasking lives. At 80 million
strong, Millennials are about 25% of the total U.S.
population, outsizing Gen X as well as Baby Boomers.
A new cohort called HENRY’s (High Earners Not Rich
Yet) should be on the constant vigil of luxury brands.
They have the ability to cut through the marketing
clutter and find true connections. Building brand
credibility is crucial to influencing this category.
An interesting and meaningful
development around these new young
consumers is that they’re not obsessed
with ownership. Millennials are renting
plush apartments at exorbitant amounts
rather than owning one, using Rent the
Runway for a perfect evening dress,
or Uber for a drive around the city.
The world shouldn’t wonder about
whether Millennials will ever engage,
but rather anticipate how and where
they’ll choose to do so. Millennials are
82% more likely to use their phone
than speak with a sales associate,
which means that brands must change
their inspiration, story, and discovery
process before they enter the store.
Brands needs to understand how to
catch their attention and what added
value they can bring to the table.