Luxury brands for millennials are more than a price tag

They want to be directly part of the experience that these labels want to portray

The attitudes and habits of the millennial generation continue to grow in economic power and influence. Already the key drivers of the digital economy, millennials now represent more than 25 per cent of our global population and will form 75 per cent of global workforce by 2025.

Many reports focus on — and to some degree stereotype — this particular demographic group. However, like any other generation, millennials are made up of a broad section of individuals separated by age, culture, religion, race, gender, sexual identity, occupation, spending power, personality type, attitudes and taste.

Nonetheless, millennials are inevitably marked to varying degrees by the social and political realities of their formative years, as well as by the cultural dominance of early-adopter peers (aka ‘gen-narrators’) and social media ‘power millennials’ such as Gigi Hadid or Huda Kattan. As strategists, we have to look with both scepticism and insight into research on millennials to find the key underlining deep trends.

As millennials enter their prime spending years, these trends are strategically important for brands and retail businesses. The stakes are high for establishing a connection with the coming generation; a connection that could lead to a longer-term relationship and brand loyalty.

One of the most important changes for brands to accept is that young consumers today now have a role in the co-creation of branded content. Clever brands accept their brand doesn’t belong entirely to them, but also owned directly by the consumer.

Any brand that tries to control their brand while ignoring this new landscape will risk alienation or irrelevance. This is a generation that simply doesn’t see the difference in channels older consumers perceive, creating a great opportunity for those that know how to use it. Because personal online profiles are a significant part of millennial identities and social approval from peers in the form of likes and comments is a real form of social currency, brands have to ask themselves how imaginatively they are engaging with this?

When it comes to luxury, big changes are coming. This is because millennials buy from brands because of what they stand for, as much as what they make, with a key emphasis on authenticity, collaboration, contribution and participation. Artificiality is a major turn-off.

Millennials still aspire to purchasing luxury goods, but only where brand values resonate with them on a personal level. The new generation is looking for brands that create an emotional connection and offer a sense of self -discovery.

Status is moving away from being invested in known labels, often considered snobbish, exclusive-in-a-bad-way and simply poor value, towards smaller brands, where the benefits on offer represent some form of true personal augmentation. The longevity promises of high-quality traditional luxury offers are also being challenged by the ‘rent, not own’ mentality of the coming generation.

As the number one trend prediction for the future just released by the World Economic Forum states — ‘you’ll own nothing. Whatever you want, you’ll rent.’

With many alternatives to choose from, millennials are demanding better value for their money and greater real-time curation from luxury brands, refusing to accept a brand’s status at face value and preferring to unearth information for themselves. They are absolutely not passive, but rather are curators and creators of their own worlds, appreciating personalisation and the ability to share their voice — user-generated content is 35 per cent more memorable and 50 per cent more trusted than other types of media, especially among millennials.

Likewise, 92 per cent prefer recommendations from people to branded content, even if they have never met the person doing the recommending.

Digital experiences are paramount to millennials’ purchasing journeys and luxury brands that neglect digital channels do so at their peril. Luxury and mobile are still sometimes viewed as mutually exclusive, with luxury brand apps notably failing to gain the digital territory they should be owning.

In fashion, digital campaigns are only just beginning to be as imaginative and content-rich as their real-world catwalk equivalents, with some exceptions, including Burberry, who lead the way with imaginative digital content, undertaken in the full knowledge that as a young brand fan’s loyalty will deepen as his or her taste develops.

A first perfume purchase could convert to a scarf and eventually a trench coat, if the relationship can be maintained.

Technology itself is challenging fashion as the premium luxury sector. In China, where purchases account for nearly a third of the global luxury market, major shifts in spending are being seen. A new class of luxury consumer is emerging, possessing both a reverence for heritage and an eye for subtle, understated quality.

Apple has now overtaken Louis Vuitton as the go-to brand for wealthy Chinese men seeking to buy gifts; just the first ripple from a sharp change in direction.