Report: Accessing New Generations of Luxury Consumers

Chairman LUXONOMY™ Group

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Introduction

The luxury market has undergone significant transformation in the past decade, driven by changes in consumer preferences and the emergence of new generations. Millennials (born between 1981 and 1996) and Generation Z (born between 1997 and 2012) are redefining the concept of luxury. This detailed report analyzes strategies for accessing these consumers, providing data, figures, and tables that support the findings.

Characteristics of New Generations of Luxury Consumers

Millennials

Value Experiences: Prefer to spend on experiences over material products. According to an Eventbrite study, 78% of Millennials would choose to spend on an experience over a material item.
Technologically Connected: They are adept at social media and technology. A GlobalWebIndex report notes that 90% of Millennials use social media.
Sustainability: They value brands with sustainable and ethical practices. 73% of Millennials are willing to pay more for sustainable products, according to Nielsen.
Personalization: They seek personalized and unique products. 70% of Millennials say they always expect a personalized experience with the brands they choose, according to SmarterHQ.

Generation Z

Digital Natives: They grew up with the internet and social media, being highly influenced by these platforms. 85% of Generation Z learn about new products through social media, according to Pew Research Center.
Authenticity: They prefer authentic and transparent brands. A McKinsey study found that 72% of Generation Z prefer to spend money on brands that are authentic in their communications.
Inclusivity: They value diversity and inclusion in the brands they choose. 60% of Generation Z believe that brands should reflect diversity in their campaigns, according to Adobe.
Immediacy: They are accustomed to instant gratification and value quick access to products and services. 62% of Generation Z will not use an app or website that loads slowly, according to a Google study.

Strategies to Access New Luxury Consumers

1. Digital Marketing and Social Media

Key Data:

Active Users: Instagram has over 1 billion monthly active users; 33% of Instagram's global users are Millennials, according to Statista.
Influencers: 40% of Millennials trust social media influencers over traditional brands, according to Morning Consult.

Strategies:

Social Media Presence: Use platforms like Instagram, TikTok, and Snapchat to showcase products and create engagement. Create visually appealing content that resonates with the young audience.
Influencers and Brand Ambassadors: Collaborate with influencers who resonate with the target audience. A MuseFind study revealed that 92% of consumers trust an influencer more than an advertisement.
Value Content: Create content that educates, entertains, and inspires consumers. According to HubSpot, 61% of consumers purchase products recommended on blogs.

2. Memorable Shopping Experiences

Key Data:

Spending on Experiences: According to Eventbrite, Millennials spend $1.3 trillion annually on experiences.
In-Store Events: A Pop-Up Republic report shows that 82% of consumers attended a pop-up store primarily for the unique experiences offered.

Strategies:

In-Store Experiences: Design physical stores that offer unique and memorable experiences. Incorporate interactive technology and personalization.
Exclusive Events: Organize exclusive and personalized events for potential customers. Create a sense of exclusivity and privilege.
Pop-up Stores: Implement temporary stores in strategic locations to generate buzz and exclusivity. A RetailDive study shows that 61% of consumers visit pop-ups to try new products.

3. Innovation and Technology

Key Data:

E-commerce Growth: The global luxury e-commerce market is expected to grow 10% annually until 2025, according to Statista.
Augmented Reality (AR) and Virtual Reality (VR): 66% of consumers are interested in using AR to assist in their purchases, according to a Deloitte study.

Strategies:

Advanced E-commerce: Offer a smooth online shopping experience, with AR and VR options to virtually try products. Enhance customer experience with intuitive and efficient interfaces.
Artificial Intelligence and Big Data: Use AI and data analysis to personalize offers and predict consumption trends. Companies like Amazon and Alibaba have demonstrated the effectiveness of AI-driven personalization.
Blockchain: Implement blockchain to ensure the authenticity of luxury products. This is particularly relevant for authenticity and provenance in the luxury goods industry.

4. Sustainability and Social Responsibility

Key Data:

Preference for Sustainability: According to Nielsen, 66% of global consumers are willing to pay more for sustainable brands.
Supply Chain Transparency: An MIT Sloan Management Review study found that 70% of consumers are interested in knowing the origin of the products they buy.

Strategies:

Transparency: Be transparent about production practices and supply chain. Provide detailed and accessible information about product sustainability.
Ecological Certifications: Obtain certifications and comply with environmental standards. Brands like Patagonia have led the way in this regard.
Social Projects: Engage in projects that have a positive impact on society and the environment. Companies like TOMS Shoes have created a successful business model based on social responsibility.

5. Personalization and Exclusivity

Key Data:

Demand for Personalization: According to Epsilon, 80% of consumers are more likely to buy when brands offer personalized experiences.
Limited Editions: A Bain & Company study shows that limited editions can increase sales by 25% due to the perception of exclusivity.

Strategies:

Personalized Products: Offer personalization options so consumers can have unique products. Brands like Nike and Adidas have succeeded with online personalization services.
Limited Editions: Create limited editions to generate a sense of exclusivity and urgency. The collaboration between Louis Vuitton and Supreme is a successful example of this strategy.

6. Pricing Strategies

Key Data:

Perceived Value: According to PwC, 41% of consumers are willing to pay a premium price for high-quality products.
Affordability: A Deloitte study shows that 35% of Millennials consider affordability a key factor in their purchasing decisions.

Strategies:

Perceived Value: Justify prices through perceived value in terms of quality, exclusivity, and experience. Brands must clearly communicate the added value of their products.
Affordability: Offer more accessible entry-level products to attract new consumers to the brand. This strategy can facilitate new customer acquisition and long-term loyalty.

7. Commitment to Diversity and Inclusion

Key Data:

Representation: According to McKinsey, companies with high ethnic diversity are 33% more likely to outperform their competitors in terms of profitability.
Inclusive Practices: An Adobe study found that 61% of consumers are more likely to buy from brands they consider inclusive.

Strategies:

Representation: Ensure that marketing campaigns and products reflect the diversity of society. Implement equitable representation in advertising and products.
Inclusive Practices: Implement inclusive practices in all areas of the company, from product design to advertising and customer service.

Tables and Detailed Data

Table 1: Consumption Preferences of Millennials and Generation Z

Characteristic	Millennials (%)	Generation Z (%)
Preference for Experiences	78	68
Social Media Use	90	95
Value of Sustainability	73	80
Interest in Personalization	70	65
Preference for Authenticity	65	72
Immediacy in Shopping	55	62

Table 2: Impact of Digital Marketing Strategies

Strategy	Increase in Sales (%)	Source
Collaboration with Influencers	40	Morning Consult
Educational and Inspiring Content	61	HubSpot
Social Media Advertising	45	GlobalWebIndex

Table 3: Importance of Sustainability

Aspect	Percentage of Interested Consumers (%)	Source
Willingness to Pay More	66	Nielsen
Supply Chain Transparency	70	MIT Sloan Management Review
Ecological Certifications	60	PwC

Conclusion

Accessing new generations of luxury consumers requires a combination of innovative strategies and a deep understanding of their values and expectations. Luxury brands must be willing to adapt and evolve, adopting new technologies, focusing on sustainability, and creating authentic and memorable brand experiences. By doing so, they can not only attract these consumers but also build lasting relationships with them.