In the realm of luxury, consumer behavior serves as a compass, guiding brands and marketers on a quest to satisfy the desires of the discerning elite. As we navigate the ever-evolving landscape of consumer behaviour, it is essential to explore the dynamics between old luxury and new luxury consumers.
Why Understanding Consumer Preferences is Important
Understanding the shifting preferences and expectations of luxury consumers is paramount to staying relevant and delivering exceptional brand experiences. Luxury is constantly evolving, not only generationally, but also in location. Young luxury consumers continue to rewrite the industry rulebook. New worlds of luxury are on the map. The very definition of luxury is increasingly nuanced. And the reliance on technology is deepening in view of the Web3 era.
The Luxury Sector is Growing
According to Bain & Company, from 2021-2, 95% of luxury brands enjoyed a positive compound annual growth, compared to 25% from 2019-2020.
Throughout 2022, the personal luxury goods market enjoyed a meteoric post-pandemic rise, advancing 24 percent to $376 billion, and the Bain-Altagamma analysts expect the good times to keep rolling in 2023.
The personal luxury market is projected to see further growth of at least 3-8 percent next year, even with the expected downturn in global economic conditions
However, Millennials are not the only strong luxury consumer base, now Gen Z and Gen Alpha are considered major consumers in the affluent market.
What is Considered Luxury Today?
The term Luxury is a concept in flux, constantly adapting to societal changes and shifting cultural landscapes. Today's luxury consumers display a nuanced understanding of the term, embracing a broader range of attributes beyond material possessions.
Experiences, sustainability, personalization, and well-being have become integral components of the modern luxury lexicon. Affluent customers are increasingly pursuing positive changes in their lives and expecting luxury brands to also do better by people and the planet. Luxury brands will need to redefine themselves as elevated enablers of social change in order to remain relevant.
Source: Luxe Digital
The Importance of Customer Centiricity
Consumer centricity is more paramount than ever in sustaining a strong luxury brand. Luxury brands must deliver timely and timeless forms of meaningful value and empower expressions of individual identities.
What Remains Consistent Over Time
Despite the influence of changing norms, the allure of timeless elegance and enduring values remains a cornerstone of luxury consumer behavior. Affluent individuals seek craftsmanship, heritage, and exclusivity, valuing the artistry and meticulous attention to detail that define luxury offerings.
The desire for authenticity, exceptional quality, and enduring luxury experiences transcends time, underscoring the significance of tradition in the luxury realm.
What Luxury Consumers Value Today
Old luxury brands use to implore a badge of status, however, new Luxury consumers today place a premium on self-expression and individuality.
They seek products and experiences that align with their unique tastes, values, and identities. Customization and personalization have emerged as powerful drivers of consumer behavior, enabling luxury brands to create bespoke offerings that cater to the desires and aspirations of each individual.
The ability to curate and personalize luxury experiences fosters a sense of exclusivity and deepens the emotional connection between consumers and brands.
In the intricate tapestry of luxury consumer behavior, there are notable shifts between old and new luxury. Timeless elegance, enduring values, and craftsmanship continue to resonate with luxury consumers, while evolving definitions of luxury encompass a wider array of experiences and values. The digital realm has reshaped how luxury consumers engage with brands, yet the desire for personalized service and tactile experiences remains unaltered. Individuality, self-expression, and conscious consumption have become paramount, driving consumer choices in the pursuit of exceptional and meaningful luxury experiences.
If you would like to check out more articles related to marketing trends in the luxury sector, check out our articles:
Bain and Altagamma Luxury Goods Worldwide Market Study Fall 2022 – 21st Edition, by Claudia D’arpizio and Federica Levato, November 15, 2022.
The Future of Luxury: 7 Trends To Stay Ahead In 2023 by Florine Eppe Beauloye, January 10, 2023.