Millennials, famously (if incorrectly) labeled as the brokest generation, have been blamed for the death of everything from the Big Mac to home ownership. So it might come as a surprise to learn that these same millennials are responsible for saving our favorite luxury brands.
As boomers settle into fixed-income years, modern luxury brands are forced to explore new ways to build their customer pipeline. Key to this strategy are millennial and Gen Z audiences that, by and large, do not yet have the ability to actually purchase (or in some cases, even legally use) their products. Nevertheless, the focus on engaging millennial and Gen Z audiences in the near term to secure a loyal, long-term customer base is a shift luxury brands must make to ensure their ongoing relevance.
Some brands are already making that shift. Look no further than Louis Vuitton’s partnership with Riot Games to tap into the esports space, rapper Gucci Mane’s presence in Gucci’s new campaign (which seemed inevitable in retrospect), and Prada’s collaboration with National Geographic to reduce the future use of plastics in its designer bags. All three were developed with young consumers in mind, precisely engineered to build relationships for the future.
Which leads to the question that every luxury brand is asking: How do you do it right?
The difference between old and new luxury
New luxury products and old legacy brands that are successfully adapting put an emphasis on product accessibility, not just ownership. As millennials increase their purchasing power, they want luxury that they can integrate into their lives without having to change who they are.
Peloton, despite its recent marketing missteps, is still an example of a new luxury product that taps into the idea of accessibility. Not long ago, a $2,500 stationary bike with a $50-per-month subscription fee would have been viewed as a bound-to-fail business model. At the time, luxury was an expensive gym destination. But today, luxury has become about the aspiration of having an experience designed with you in mind, not pushing you to a place that fits everyone who has the membership fee. In the case of Peloton or follower brands like Mirror, passion, performance, and loyalty are shared through casual conversation and social posts, not membership cards. Young consumers aspiring to embody the luxe lifestyle prefer it that way.
Evolve your story to fit new platforms
Louis Vuitton’s recent move into the esports space strategically delivered a new market for future purchasers. The formerly “old luxury” brand jumped at the opportunity to join a space estimated at $1.5 billion that attracts hundreds of millions of next-
generation viewers. It is not alone.
Audi has also been looking for new ways to democratize its high-end vehicles for millennials. It found a unique opportunity on Reddit by welcoming audiences to engage with their brand through a number of Ask Me Anything (AMA) threads. The “Think Faster” AMA allowed Reddit users (skewing much younger than the traditional Audi demo) to ask celebrities anything they wanted, live, while the celebrities were rocketing around a track in Audi Sport vehicles. The resulting live videos took the Reddit AMA, and Audi’s product, to every major social outlet. A nontraditional platform for Audi to advertise its cars served as an opportunity to bond with millennial and Gen Z audiences, even before they have the purchasing power to buy an Audi.
Lead with your values
When considering young consumer engagement strategies, too many companies today use a bait-and-switch mentality: Bait them with a lifestyle service that feels indispensable and has a low barrier to entry, then up the cost once they are hooked. Modern luxury brands, however, need to take the opposite approach. Lead with the belief system and values of your brand, and price them accordingly. New luxury is not about cost or sales or subsidies, it’s about customer loyalty and desire.
The more authentic and inclusive your brand is, the more likely your customers are to stick around once you have them in the door. When customers feel embraced, trusted, valued and truly see themselves reflected in your brand, this alignment of beliefs helps to ensure a customer sticks around long enough to cover your long-term, relationship-based investments related to customer acquisition.
If luxury brands want to succeed in the future, they’ll have to adjust strategies that have worked for decades. It’s no longer a suggestion or potential idea for brands to consider targeting millennials and Gen Z, it’s a necessity.
For those luxury brands still looking to define their positioning in today’s marketplace, find out where millennials and Gen Z customers are, and welcome them in. Demonstrate how you will work to elevate their existing lifestyle. Start building a relationship as soon as possible. When the time comes for them to purchase, they’ll remember your efforts.