Mindshare Report Delves Into The New Luxury Market

Although today's shoppers still seek to "keep up with the Joneses," there is a new form of envy called “competitive altruism” where individuals attempt to outdo each other in terms of generosity and altruism to enhance their status. 

That’s one of the trends explored in a new report aimed at updating clients on changes in the luxury category. 

To address competitive altruism, the report urges luxury marketers to consider incorporating a softer side to their brands, focusing on attributes such as kindness, empathy, or purpose. For example, over the past few years, some luxury brands have launched or sponsored programs to empower women and help veterans, or have taken political stances.

In a consumer survey the agency found that 73% of respondents said that they would buy “premium, mid-priced products if they offered the same level of quality as luxury products.” 

Thus, Mindshare concludes, brands should be mindful of opportunities to communicate product development stories to consumers. An example might be a story about one of more of the artisans that hand-craft leather goods or other products for a brand.

Luxury marketers should ensure that they’re targeting multicultural consumers, and consider dynamic creative optimization to speak to different demographic motivations and needs. To that end, Mindshare cites MRI data finding 29% of multicultural consumers owned or purchased luxury brands in fashion, versus 20% of white consumers. 

Also, today’s consumer believes that the definition of luxury is less about scarcity and about intangibles like wellness, uniqueness, and exclusivity. 

Mindshare's research also classifies luxury shoppers into five categories. Strivers (24%) see luxury as evidence of success and are most likely to be influenced by social media influencers, family members, and TV shows. 

Similar to Strivers, Trendsetters (16%) see luxury as a way to differentiate themselves and also track social media influencers, though they are also guided by shopping websites, and their friends on social media.

Only The Best (23%) define luxury as unsurpassed quality and service and are most likely to be influenced by search, online reviews, and recommendations from their friends. 

The Aesthetes group (17%) have the highest percentage of women and define luxury as the pinnacle of design. 

The oldest-skewing Comfort First (19%) class see luxury as a meaningful way of life and are most likely swayed through online reviews and brand websites. Unlike other shoppers associated with luxury, brands need to downplay status and image as part of their communications. Instead, they should focus on communicating the comfort and ease that their products or services provide. 

Luxury markets are closely tied to the upturns and downturns of the economy, says Mark Potts, Head of Insights, Mindshare North America. Long-term pressures on luxury sales mean that investing in brand building now is critical, by addressing the changes in perceptions and consumer desires around the world of luxury. Those that do so will find that stronger brands are more resilient and bounce back quicker in downturns – and set themselves up for success in the future.

Mindshare NA’s report includes a survey 2,000 U.S. consumers - 1,600 "luxury" consumers and 400 non-luxury consumers - across the U.S, ages 18 and up. The agency also conducted four different focus groups with affluent consumers, and consulted with Yale psychologist, Paul Bloom.

More about the report is available here.

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