Millennial shoppers wield an ever-increasing share of the dollars that are spent in the luxury market. Professionals have been looking for new ways to market their brands to these elusive customers in the hope of growing their customer base - all while conserving the exclusivity and prestige of their brands. How can luxury brands continue to build intimate relationships with their clients and brand ambassadors as they always have, but at a scale that generates a healthier bottom line?
Just look at this month's New York Fashion Week. Or actually, let's throw it back to the 1850's when top couture houses in France held private fashion shows for their most prized clients. The high-end fashion world has always been good at making sure no one outside of their exclusive circle has access to their products. Talk about defining affluence.
Industries like insurance are struggling to capture the attention of younger generations because fewer of these consumers are conforming to the "normal" behaviors these marketers have come to expect. While marketers still have a massive base of older consumers to fall back on at the moment, surviving market disruption will come down to how they adapt to consumers' attitudes in both the near and distant future. For many businesses targeting the affluent, it's time to begin retooling their products and marketing strategies based on the preferences of the new generations.
Specialty retailers, if you aren't convinced that you are positioned for the next big trend in retailing, then here is more proof. Another of the 'big boy' retailers, Neiman Marcus, is looking to a specialty retailer to help it restore some of its lost magic and learn some new tricks about how to sell in today's rapidly evolving retail landscape. Neiman Marcus just partnered with Story in New York City to tap its young, urban sophisticate customers and get some much needed buzz going about what it has to offer.
As we start working with our new clients, we listen very carefully to how they define their current marketplaces and target audiences. According to Webster's dictionary, affluent means "having a large amount of money and owning many expensive things." When we follow up and ask marketers what they consider to be "a large amount of money," their responses usually focus either on their customers' household-income levels or their customers' net worth.
Can we really achieve social status just by traveling? It wasn't that long ago when the well-to-do went straight for purchasing (and showing off) expensive new possessions. Want to get a leg-up on the neighbors? Buy a new Mercedes or Rolex or Gucci purse. But there's only so many pairs of Louboutins a person can buy before needing something "more."
According to the US Travel Association, direct spending on leisure travel by domestic and international travelers totaled $650.8 billion in 2015. Yet, even with this huge market, leisure travel is still just that-leisure. Put another way, people have to buy food, medicine and hygiene products-they don't have to buy a Caribbean vacation. This 'need vs. want' dynamic makes advertising crucial to the success of leisure travel companies. Marketers need to grab the imagination and emotion of perspective customers. And, in this realm, successful advertising most frequently comes in the form of great storytelling that paints a picture of an experience.
In our July column, we reviewed in some detail how much deeper Amazon has reached in its quest to penetrate the American consumer marketplace. According to our most recent survey, 151 million adults made one or more purchases from Amazon in the past 12 months.
If you haven't noticed, there's a boom in American whiskey right now. Led by bourbon, the category has grown 40% in the past decade, with revenue growth of 47% to $2.7 billion in 2014. The International Wine and Spirits Review forecasts 20% growth in the next five years. Supply can hardly keep up with demand, leading to shortages of the amber liquid in top markets across the country. And it's the favorite way for pop culture heavyweights to booze up, from Don Draper on "Mad Men" to Frank Underwood on "House of Cards" to Raylin Givins on "Justified." Like vodka ...
Let's face it. Most products positioned in the luxury sphere offer exceptional quality, workmanship and styling. These brands have aced the product-centric side of the marketing equation. As a result, luxury brands have largely become commoditized with comparable high-end products offering much the same features and benefits, with minor tweaks here and there.