Illuminating the Next Generation of Luxurians
In a time where targeting has to be pinpoint-precise, your brand won’t and doesn’t need to appeal to every demographic, psychographic and consumer behaviour. But New Wave Nomads, The Crypto Rich, Inclusive Power Players and Conscientious Agents of Change are in the spotlight right now – offering immense opportunities for luxury brands to get in with the next gen. So why not take the leap?
By no means an exhaustive list of every Tom, Dick and Harry roaming around the luxury space, here we’re highlighting four standout psychographics we think are worth your while and letting you know what they want from luxury brands.
Do with these golden nuggets of info what you dare to.
New Wave Nomads
The cool kids of luxury’s new graduating class. Free-spirited wanderlusters-turned-wanderworkers thanks to the freedom and flexibility afforded by new hybrid working norms. Not exclusively the gap year toffs you might be imagining, though they are someone to cater to, professionals from every level are throwing off their shackles and exploring the world in style.
With lockdowns over and done with, remote working (as a choice rather than a stay-at-home order) is rising rapidly as more and more commute-wary professionals make moves to become location independent. Nearly 25% of ultra-HNWIs are planning to, or already have, applied for a second passport, preferring the concept of an ‘untethered existence’ as a global citizen.
For travel, hospitality and placemakers around the world, the increasing number of digital nomads offers a wealth of opportunity. Of those who have embraced the lifestyle, 19% are now Gen Z, 42% are millennials, 22% are Gen X and 17% are boomers.
Placemakers should keep these migratory trends in mind when looking at their target demographics. Despite objectives to cultivate communities so homely residents wouldn’t want to leave, the reality is COVID-19 triggered a reevaluation for many.
Lockdowns propelled people to seek out enriching existences, and for a significant percentage that enrichment can only be found travelling the world.
Brands who can curate agile, escapist experiences in the luxury vein will be go-tos for the borderless.
Hospitality locations with dreamy, focus-fuelling workspaces will do well, travel advisories who can find and deliver out-of-this-world excursions will be the most recommended and destination officials who can balance a sense of belonging without inflicting feelings of constraint will win big with the nomads of today.
Achieve the above and all you’ll need to nail down is your channels of discovery. We got into the details earlier this year but here’s a couple of tips for you time-poor readers:
- Tell Your Story
Every marketer and their mum knows storytelling is the key to consumers’ hearts. And their credit card details. Compelling content is your lifeforce. Convey your positioning, mission, service mindset and every memory guests will walk away with through evocative messaging, meaningful imagery and striking video.
- Showcase Thoughtful Experience
Your digital footprint needs to take potential clients and consumers through a gallery of what their lives could look like if they choose you – your city, your hotel, your experience, however it presents. Think about remote working, potential post-lockdown overindulgence, the need for absolute reassurance about such a shaky period. Build those into your strategy and your CX and you’ll be golden, just like all those visas taking HNWIs across the world.
Conscientious Agents of Change
Luxury has always been about perception, external and internal in equal measure, whether we’re outwardly displaying luxury purchases as a status symbol or making those purchases to satisfy a sense of self.
And those motives will likely persist even as desires regarding perception shift become more value-centric.
The eco-warrior of today isn’t necessarily a spiritual, often barefoot, radically-liberated person. Not many luxury consumers are spending time hugging trees or typifying the term ‘hippy’ (some do) but rather transitioning into casual climate routinists, where people and the planet are key stakeholders in their daily purchasing decisions.
Every professional throughout the world knows the newfound, widespread emphasis being placed on sustainability in business, catalysed by climate horrors like the 2019-2020 Australian Bushfires, global flash floods and unprecedented heatwaves.
It’s unsurprising then, during the pandemic-induced anthropause, the importance placed by consumers on ESG values soared.
- 44% of luxury buyers globally are now influenced by a brand’s ethical and sustainable credentials when it comes to buying decisions.
- And in China, 81% of millionaires demand brands operate ethically to secure their custom with 78% planning to invest in sustainable companies.
Evidently, HNWIs are increasingly wanting to incorporate sustainable and philanthropic decisions into their consumption. In a post-pandemic world, giving a shit = soaring social status.
So a strong ESG proposition is no longer just ‘nice-to-have’, it’s essential during this surge in conscientious consumerism, that will no doubt last. Especially for luxury brands who have the budget and resources to commit to ethical and sustainable initiatives, it is now expected.
How to position a luxury brand as ethical/sustainable/morally sound is an article in itself, and even the thousands already saturating search results only scratch the surface. But here are a few places to start:
- Show Your Credentials
As the saying goes: if you have it, flaunt it. Dedicating website space and compelling copy to sustainability awards, ethics accreditations and so on is an incredibly effortless move towards attracting the ‘conscientious agents’ psychographic. It’s simplicity itself if you have them.
- Join the Restoration Revolution
For fashion and other luxury goods, an important part of creating an irreplaceable product is ensuring it doesn’t need to be replaced. Many luxury labels are now incorporating repair and restoration services into their offerings, adding an element of care for customers whilst elongating their relationship with the brand.
- Total Transparency
Transparency should be table stakes really. But it’s not, and operating honestly and openly as a business can get you far with conscious consumers. From supplier audits and stringent codes of conduct to unambiguous material sources and carbon footprint reports, there are plenty of actions and functions going on behind the scenes consumers now have a vested interest in to influence their purchasing decisions. Don’t let it look like your brand has something to hide.
Despite the significant perception element, building ESG values and the opportunity to ‘do good’ into your product or service offering shouldn’t exclusively be about escalating your consumer base. In the current market, performativity is obvious and HNWIs see straight through it.
Rarely do we find a company that ticks every box to the highest degree, but commitment to a better future shouldn’t be scarce in luxury or merely performed for favourable optics.
Inclusive Power Players
Speaking of performative acts, diversity and inclusion are the business buzzwords of the year. Or the last two years. Or three. Yet, despite the words’ ubiquity, not a lot of progress has been made across the board. Certainly not enough to warrant the phrase’s presence in every brand mission statement.
And new luxury consumers have noticed.
This strain of luxury’s upcoming unit could very well be marching for #BlackLivesMatter, toppling statues or attending Pride in the same weekend they find themselves shopping for treats, gifts, memberships and so on. At the very least, they’ll be perusing luxury store displays wearing a political slogan t-shirt.
Groups previously overlooked by the sector now possess some serious spending power. The LGBTQ+ community currently represents America’s fastest-growing consumer market while younger Black Americans are overtaking older generations in terms of household wealth. Upcoming luxury power players China and the Middle East are seeing huge scaling of their ultra-HNWI percentages, further diversifying the luxury consumer.
And with these trends comes progressive attitudes intertwined with demands for inclusive luxury as these power players won’t buy from brands who contradict their beliefs.
‘It’s about “celebrating who people are – not what they have. Young affluents are much more interested in belonging and identity than prestige. They’re saying: ‘I don’t feel my personal politics and identity really match with any of the established [options].’ – Jamie Caring, Founder of Sevengage
Historically, a sense of belonging in luxury circles and settings was directly generated via exclusivity. Like aspiration, the desire to be part of a cultivated group is something we likely won’t evolve past but the contemporary consumer brands must cater to now is political, cultural, active. And they want to exist in spaces they feel align with their spirit.
Many members’ clubs are effectively going against the elitist grain. Still selective, their admissions are based on character, personalities, passions and stories, in the interest of maintaining a diverse and inclusive environment yet still one consisting of like-minded individuals.
Zero Bond in NYC selects their members based on ‘integrity’ while The Curtain in Shoreditch, London is dedicated to creating a vibrant club for ‘strong, talented women’.
In the world of fine art, work from Black and Latinx artists is being uplifted and celebrated by both established and smaller galleries, with many raising awareness on social justice issues and/or using proceeds to donate to relevant causes.
Sometimes demonstrating inclusivity as a brand is as simple as pledging some coin to a charity, campaign or movement you believe in, philanthro-shaming be damned.
But sometimes it’s not and you have to embark on either or both of the below:
Decades of diversity-lacking, demographic-excluding brand culture bred a negative perception of the luxury industry – fashion in particular. So it’s time for brands to do the work and self-correct. The complexities of diversity and inclusion should be a daily conversation in boardrooms across the world, and attempts to reconcile the socioeconomic exclusion that comes with luxury and its intersections with race and gender should be ongoing. By all means be exclusive by product, but not by identity.
- Inclusive Innovation
Prejudiced restriction from the luxury club is in the past as far as consumers are concerned and brands who can’t keep up will be left behind. Beyond the morality of it all, practising inclusivity makes good business sense. Use advancements in AI, robotics, blockchain and other technologies to innovate for differing abilities and ages, enhancing your brand experience for these groups and widening your appeal overall.
The Crypto Rich
Ready or not, here they come. Tech-savvy, sci-fi lovers that stormed the crypto space faster than you can say Bitcoin.
The ‘crypto bro’ is more than a stereotype, they’re a mainstay of the early 2020s and no one can escape them, not even luxury. Not exactly the typical archetype of a luxury buyer, usually adorned in backwards caps and high-end footwear, they meander through parties throwing around terms like ‘blockchain-based economies’ and crypto slang.
But ignore them at your peril.
In the past year, nearly three quarters (72%) of HNWIs globally invested in cryptocurrencies. It’s the new luxury consumer craze. And the benefit of diversifying investment portfolios is only the tip of the crypto-rich iceberg.
Wealthy, typically young, consumers are purchasing virtual assets to either collect, curate and inflate or exchange for IRL luxury goods.
In the US, 83% of millennial millionaires already own cryptocurrencies and these sky-high numbers are forcing luxury brands to take notice.
Established auction house Christie’s sold 150 million dollars worth of digital art in 2021 while plenty of luxury fashion labels and designers across all luxury goods have created crypto-collections.
During last year’s New York Fashion Week, Rebecca Minkoff became the first designer to create and showcase an NFT collection on the runway and this year debuted her second NFT collection, this one designed to exist exclusively in the metaverse.
- Get Involved in NFTs
In the last year, the luxury sector has stormed the beaches of web3. Most notably via NFT drops. From Gucci to Ray-Ban, designing and releasing digital collections has seen success across the board for luxury brands. With the metaverse gaining ground, an original, limited-edition NFT collection is a good place to start connecting with the crypto rich.
- Trade in Cryptocurrencies
In the not-so-distant future, luxury brands will begin to accept cryptocurrency in transactions. Tesla has gone back and forth, stopping the acceptance of Bitcoin in May 2021 but Musk performed a 180 in January of this year, accepting Dogecoin as payment for some selected Tesla merchandise. It’s happening. Slowly but surely. And being one of the first brands to integrate cryptocurrency as a payment option is an achievement that will pay off in luxury crypto-rich consumer circles.
It’s a truth universally acknowledged (or at least it should be) that content and experience now sits at the heart of luxury.
People want to buy into a brand’s all-encompassing world, one that reflects the things they value, mirroring and enhancing their lifestyle: what they think, what they believe, what they do, what they feel.
As much as we’d like to believe our postmodern, post-pandemic, not-quite-yet-meta society has evolved beyond aspiration, it hasn’t. And it won’t.
Instead, we are simply aspiring differently. Desiring and striving for symbolism that transcends the requirement of social status – lifestyle kudos are now a given in luxury – and fulfils concepts, beliefs and values that have become steadfast facets of the luxury consumers’ DNA.
If you want support in strategy, experience design, brand and tech services as you take on luxury’s newest cohort, get in touch with our consultants at firstname.lastname@example.org.