Popular wisdom is that Millennials eschew luxury retail for experience-driven entertainment, such as traveling or dining out at Michelin-starred restaurants. Higher-end goods like designer watches and handbags, once coveted status symbols for Baby Boomers and Gen X alike, have largely failed to entice younger shoppers. Last year, Louis Vuitton sales declined 73 percent, Saint Laurent fell by 68 percent, and Balenciaga dipped 55 percent. The Marriott, though? They’re doing better than ever.
But while plenty of well-known luxury retailers continue to cede revenue to hotels and hors d’oeuvres, many more are doing just fine. There is money to be made in selling the high life to precious twenty-somethings—just so long as you do it on their terms.
Here’s how the best retailers are doing it:
Talk to them in their terms
Older luxury retailers tend to revere their products as classic or timeliness, which is, predictably, reflected in their marketing. Take Tiffany’s, for example. Last year, in a report Reuters admonished the brand’s continued insistence on “old-world luxury.”
“In the Americas, 22% of sales are attributed to the engagement/wedding jewelry category, as compared with 28% worldwide. This, no doubt, is a reflection of lower marriage rates in the U.S. and young American bride’s willingness to ignore the tradition of the diamond engagement ring.”
Conversely, Gucci, ostensibly as old world as a brand can get, has made significant in-roads with twenty-somethings.
“Gucci captures a larger share of luxury Millennials, compared to audiences above the age of 35. Gucci has successfully reinvented its image from ‘old world’ to ‘new world’, with digital and social technologies that maintain a youthful, edgy approach to high fashion.
Renowned for their progressive embrace of gender fluidity and androgyny, bold granny chic florals and Instagram-exclusive model interviews, by focusing on rich content Gucci has seen an enormous growth in traffic from social media, including a 190% rise from YouTube over the past three months year-on-year.”
Know their interests
It’s not that Millennials refuse luxury goods solely because they are “luxury.” It’s that they reject luxury goods if their sole purpose if they can’t derive value from it. It’s an important distinction.
Again, according to Internet Retailing:
“The fact is, Millennials care more about what luxury goods say about them than the luxury goods themselves. Luxury brands are about making a statement, creating an experience, building social capital and making an emotional connection to celebrities who lead incredible lives. To buy a Versace dress that Gigi Hadid wore is to feel part of her world, connected to something more glamorous, opulent and beautiful than ordinary life (and of course, to capture your abundance on social media for all your friends to see).”
It makes sense. Why do Millennials love travel and dining so much? Sure, it’s an experience. But even more, it’s something they can easily share with their followers.
Have a point of view
Millennials are socially active, and brands that embrace this are more likely to resonate. When it comes to some Tiffany’s product lines, many Millennials equate diamonds with conflict. And while that may not be necessarily true for Tiffany’s, the association of diamonds with third-world suffering is on the mind of many. On the other hand, as we saw above, Gucci is celebrating in-vogue social issues like gender fluidity, and Millennials have flocked.
From Business of Fashion:
“The brands that are best placed for success within the millennial economy are those with a strong and distinct point of view, says Rebecca Robins, co-author of the book “Meta-Luxury” and global director at branding agency Interbrand. That point of view needs to run deep inside the business in order to resonate and show up across the entire brand experience.”
Millennials have been a tough market to crack for many luxury brands struggling to maintain a timeless, old-world identity. Luxury brands — and most brands in general — are looking at how to use their stores to their advantage and as an experience. Those who have taken the time to get to know their customers are finding success — even if they know have to compete with experience-driven entertainment.