Millennials, or Generation Y, are fond of luxury goods, and in a few years’ time they will represent most of the major brands’ clientele. However, they bring along their fair share of demands, and are pressing luxury brands to change their ways. Nowadays, one of the main requirement is definitely going digital, since Gen Y’s favorite territory is, without doubt, the web.
A 2017 Statista study recorded that Millennials spend an average of 3 hours and 43 minutes on their phone each day. Therefore, luxury brands have no other choice but to juggle physical and digital, while taking into account the demands of young consumers.
Which strategies are the key to success?
Strategies to draw Millennials in
These past few years, luxury brands have developed effective digital strategies targeting Millennials. Let’s review some of the possibilities.
Being visible, accessible, and instantly available on digital devices
Gen Y grew up surrounded by digital. With the growth of social media, mobile devices and ecommerce during the Millennials’ teenage years, new behaviors have appeared. Young consumers are now used to having access to everything in just a few clicks.
Digital comes with its share of practicality and convenience. In the span of one day, they can browse, order and receive a product; all while sitting in their couch. Some call it the IWWIWWIWI generation (I want what I want when I want it). Young people expect a fast and easy service from each brand, and that includes the luxury goods market. If they feel the urge to buy products, the latter should be purchasable instantly.
Burberry has perfectly understood this. The luxury brand offers a calendar with clothes that are made available online right after the fashion shows. It is an ideal way to get closer to Millennials. Gucci, on the other hand, has decided to bet on ultra-fast delivery. Thanks to a partnership with Farfetch, they can offer their customers to have their products delivered within 90 minutes.
Luxury brands develop an increasing number of digital services to make life easier for their customers. Digital gift cards are one of Millennials’ favorite service. Compared to physical gift cards, e-gift cards can be purchased more quickly and are entirely customizable. What is more, they are instantly sent to the recipient. In only a few minutes, a young affluent consumer can have his/her gift made. The fact that is it also very practical for the recipient is another advantage. They can easily save it on their smartphone, and use it any time, which encourages impulse purchases in stores or online.
Creating specific collections and targeted partnerships
Another strategy to draw in Gen Y: special collections. Before looking at the brand, young people look at the products and its connotations. They are constantly looking for products that reflect their lifestyle and the image they want to convey to others. What sets them apart from other consumers is that a Louis Vuitton bag can matter to them as much as a H&M shirt. Millennials like to overturn codes, see beyond social boundaries. They mix and match cut-label and luxury clothing in their outfits, without any problem. As a result, luxury brands have to think out of the box and open up to the world and to popular culture. That is why some of them have created collections dedicated to young consumers.
By surfing on the chic streetwear trend, and bringing together popular culture and luxury, luxury sales have increased by 5% in 2017 and will reach €320-330 billion worldwide by 2025. Some brands decide to collaborate directly with major streetwear brands. For example, Burberry has collaborated with Gosha Rubchinskiy, a streetwear designer.
Launching limited editions to boost sales
As for Louis Vuitton, they have worked with Supreme to launch an exclusive new bag collection. The key aspect is that it is time-limited. Louis Vuitton offered this new collection as a limited edition, and it was such a success that it sold out in about 16 seconds. Why such enthusiasm with limited editions?
Exclusivity paired with rarity, a combination that has long been used by luxury brands to create desire, is also a winning recipe with Millennials looking for recognition. They tell themselves that if they don’t buy it now, they will forever lose the opportunity to possess it. In the end, the product’s value largely depends on its uniqueness. By changing collections, brands renew their luxury products and are more in tune with the times.
Brands have found another solution to generate excitement : digital gift cards. For every new collection, luxury brands can create an e-gift card that is customized (design, message, amount…) specifically for the collection. It can be given to young consumers as an invitation to come buy an outfit. Moreover, the brand can decide upon the dematerialized card’s expiry date. Therefore, it is a limited chance for consumers.
Offering them the opportunity to be creative
A 2015 study by EliteDaily revealed that 42% of Millennials would like to design and develop new products and services alongside companies. This figure is directly related to a strategy used to draw Millennials in: valuing their creativity. Thanks to the internet, young consumers are over-informed. Search engines allow them to access almost any information in just a few minutes. Thanks to that, they quickly become experts on luxury brands and know all there in to know about them.
As a result, Gen Y consumers are more involved, they want to be more than simple clients and become partners of the brands they love. To grant them their wishes, luxury brands have set up initiatives highlighting the creativity of young and wealthy consumers in order to make them feel more involved. Often, they offer to co-produce items, meaning that customers can fully customize their products. That is what Guerlain does, by offering their clientele to create their very own perfume.
Encouraging the new way of sharing
With the internet and web 2.0, Millennials have become devoted social media users. They have taken up the habit of sharing their daily life, either in private with their closest friends, or publicly. Firmly rooted in their everyday routine, 90.4% of Millennials are active social media users (Emarketer study, 2019). In that sense, young consumers are much more responsive to the slightest information and, above all, love sharing with others. That is why any fulfilling luxury experience should easily be sharable. The value of the said experience takes a whole new meaning if loved ones are able to witness it. What fundamentally defines the value of an experience is its ability to be shared. For example, Refinery29, a media that targets young Millennials, has created “rooms”. They are installations created for people to take pictures and then share them.
Once again, luxury brands can use digital gift cards. It allows young consumers to give a gift card to their loved ones, which is a way of sharing their experience. In this case, it could be an invitation to come live a special moment thanks to the luxury brand.
In fact, living an experience is the main point for Millennials. A good product with a strong connotation is not enough if it doesn’t take them on a journey. That is why 62% of young consumers declare that, could they spend $10 000, they would choose to live an experience rather than buy a product.* The new generations give much less importance to possessing items, especially with the growth of the product-service system.
For an authentic experience, emotions matter. Therefore, luxury brands are led to develop both creative and emotional content. Online, videos have primacy over other communication mediums thanks to its ability to combine well thought-out visuals and storytelling. Social and environmental issues are often addressed as they are central themes for Gen Y.
Some brands also want to share their history through videos. For instance, Chanel directed a series of videos called “Inside Chanel”. It enables consumers to discover how it all started, how the brand turned the world of fashion and haute-couture upside down. However, even if the experiences lived are outstanding, they don’t last forever. The real challenge is to make it last, to create a long-term dream that continuously surrounds the brand.
Digital gift cards can, yet again, come in handy. Young Millennials with a gift card will probably not spend it straight away. And because it was given to them during an in-store experience, the gift card will directly be linked to that memory. As a result, each time they will see the card – when opening their wallet for example – the experience will come back to them and make them look forward to the next one.
Creating a personal and humane relationship
Since they are constantly online, Millennials want to be able to get in touch with luxury brands on this medium. More precisely, on social media (for 87% of them) on which they spend an average of 2h18 each day.* However, they have demands. 81% want an answer within 48 hours. And they don’t want to converse with a picture but with an actual person working for the brand. Having a personalized and relevant discussion is crucial for them. Burberry is one of the first brand that gave it a go by making Twitter part of their customer service. It made the brand more responsive and enabled them to stand out from other luxury brands by getting closer to Millennials.
*Globalwebindex study and Elitedaily study
Being accessible on digital channels, offering services to make everyday life easier, creating products designed for Millennials, having a unique online as well as offline experience … there are many ways to draw Millennials in your stores. And there is also a wide range of tools available to help luxury brands get closer to Gen Y. Among them you will find the digital gift card, which has already proven its worth.