By 2026 Millennials and Gen Z will make up 61% of the luxury market (up from 39% in 2019). According to a report by Highsnobiety with Boston Consulting Group – Culture Culture Culture: Quantifying What Matters Most to the New Fashion & Luxury Consumer – their post-Covid 19 behaviours indicate that brands need to focus even more on community. This doesn’t mean communication is replacing the perceived high value of a great product – since the coronavirus outbreak, US luxury consumers say a brand’s timelessness has become more important. However, a brand narrative that builds an emotional connection with them is crucial. Brands no longer need to speak to their customers, but rather through them.
This is a fundamental nuance for watchmaking brands such as Panerai, which benefits from a tight-knit community of Paneristi, or for the more recent communication and marketing strategies coming from accessible brands like BɅ111OD Watch Concept, which communicates directly with customers, or Afluendors as it calls them, and documents the full experience of buying one of its timepieces from concept to delivery. This new marketing mix is not that different from the salesman’s classic adage to “make a new friend every day”, an expression coined by drinks entrepreneur Paul Ricard, with the difference that the ability to make these new friends has been supercharged by messenger apps and social networks.
According to the Highsnobiety report, what matters most now is brands’ ability to evoke emotions and not just at the moment of purchase. A structural fact substantiates this: since the early 2000s, China’s middle class has been among the fastest-growing in the world. For luxury brands to benefit from this audience, they need to create desirability, brought forward by refreshed communities and influencers who can appeal to this new pool.
“Brands that deliver on both luxury fundamentals and the key factors that constitute our cultural credibility matrix saw annual revenue growth that is two to three times as much as those who only deliver on classic luxury factors and are not considered culturally credible,” states the report. Additionally, synergies between word-of-mouth and amplification through social media and ads have become vital, and are expected to keep on growing.
More than just a purchase
We already knew that visiting stores is a favourite social activity for members of Gen Z across the world. In China, “Gen Zers tend to regard consumption as a combination of expressions, belongings, and verifications of their personalities or interests,” reports Jing Daily. In the US, Highsnobiety highlights the vital role store associates play in the luxury experience, as they represent “the conduit between a new consumer and the universe they represent.” Going to the store is a way to enter the real scenery of a long-built relationship – and expectations – with a brand and its values: “It’s a notion with roots in early streetwear boutiques and skateboarding outposts, where the “shop guy” was a physical manifestation of a brand’s vision.”
The report notes that Gen Zers spend 51% of their purchase journey seeking inspiration and inspiring others (versus 37% for Gen X), as opposed to more directly purchase-related activities. When Louis Vuitton hired Virgil Abloh, it did so not only for the creative vision and vista he could bring to the brand, but also to connect with the communities it has built its reputation on. In the fashion industry, objects that were once perceived as simply merchandising or packaging are now sought-after and resold. They are as legitimate as the product itself because they represent a core component of the brand’s universe. In Haute Horlogerie, vintage booklets, notices, leaflets, and other items that were given or used for commercial purposes are now selling online for a couple of hundred dollars, depending on the rarity of the object.