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Methods of customer engagement in theluxury industry are changing. Some majortrends include the rise in buyers betweenages...
Kuliza Social Technology Quarterly Issue 07Photo Credit: Pedrosimoes7
consumers today do not seek luxury by price but by values ofstyle and design. Their involvement in customization highlight...
Kuliza Social Technology Quarterly Issue 07Therefore, the future of engaging theseyoung luxury buyers is the creation ofhy...
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Engaging the Next Generation of Luxury Buyers

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This article by Saswati Saha Mityra, a Consumer Behaviourist, was published in issue 07 of Social Technology Quarterly.
Summary: While the community of luxury buyers grows with the addition of young luxury buyers, a technological advancement and direct engagement by luxury brands is required as the new entrants are tech-savvy and arrive with their own perceptions of luxury.

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Transcript of "Engaging the Next Generation of Luxury Buyers"

  1. 1. Methods of customer engagement in theluxury industry are changing. Some majortrends include the rise in buyers betweenages 18 and 35, rise of new markets inthe BRIC and Gulf countries, and theirreplaceable presence of technology.These trends have impacted the industryin the following ways: Younger customersof luxury brands have to be catered to withas much attention as the mature ones;cultural preferences need to be reflected inoffers, activities, and strategies in order tobuild new loyalties. Research also showsthat technology for this generation is thenew luxury. The freedom to explore, thattechnology has enabled, is the new normand nothing less than this comfort will do forthe new consumer. This means that socialmedia and technology innovation are nolonger outside the purview of luxury.Future buyers of the luxury industry areyoung, tech-savvy, and globally familiaryet locally in-tune. A deeper understandingof their networking and communicationpractices is necessary to effectively engagethem. Based on a qualitative researchconducted by students of the Masterprogram in Market Research and ConsumerBehaviour from IE School of Social andBehavioural Sciences, with young luxurybuyers from Russia and the Gulf countries,it was observed that within the ages of 22to 35, there exist two distinct customermindsets.Luxury buyers in the 18 to 25 age group arehighly individualistic to the point of beingnarcissistic; mobility is woven in their DNA;as consumers, they are highly demandingabout the worth of a product. Unabashedin showing off their wealth, theseWhile the community of luxury buyers grows withthe addition of young luxury buyers, a technologicaladvancement and direct engagement by luxury brands isrequired as the new entrants are tech-savvy and arrive withtheir own perceptions of luxury.by Saswati Saha MitraEngaging the NextGeneration ofLuxury BuyersCommerce
  2. 2. Kuliza Social Technology Quarterly Issue 07Photo Credit: Pedrosimoes7
  3. 3. consumers today do not seek luxury by price but by values ofstyle and design. Their involvement in customization highlights theinformed side of these consumers - they are not fashion victims butfashion explorers and trend co-creators.Given the heightened sense of ‘self’ and continuous presenceonline of these luxury buyers, luxury brands, in the last two years,have increased their presence on social media platforms such asFacebook and Twitter. Burberry has 14 million followers. Watch andautomotive brands range between 8 to 10 million fans online. Socialmedia then seems to work for luxury brands. However, engagingluxury buyers is not as easy as it looks. Research indicates thatalthough these young, luxury buyers may constantly be on socialmedia, they do not use social media to connect with their favouritebrands. Most do not even ‘Like’ their favourite brands.Why is Social Media a Failurewith these Young Buyers?Social is antithetical to luxury.Social is democratic andaccessible while luxury isexclusive and inaccessible.These young buyers may betechnologically modern, culturallyopen, and exploratory in designbut when it comes to the reasonto buy luxury brands, they believein exclusivity. Social mediapages of luxury brands areopen, accessible to all, and havemillions of fans. However, theterm ‘fan’ itself is objectionableto these luxury buyers. Fans arepeople who worship a celebrityfrom afar. Luxury buyers do not worship their favourite brands fromafar. They buy them. As a result, as the high priests of a brand, to becalled a fan is almost an insult. The real luxury buyer refuses to bein the crowd and as a result refuses to engage with favourite luxurybrands on social media. While this was seen as predominant themeacross most luxury industries, the automotive sector is experiencingconsiderable consumer appreciation on social media. Buyers ofluxury automotives are highly satisfied with content generatedby automotive brands on social media. Cinematic in their effects,intensely masculine, going in-depth about a car, automotive brandsare able to engage in ways both mass and unique. More masculineluxury brands, focusing on automotives enjoy a more democraticattitude amongst ‘fans’ of different socio-economic background,while more feminine luxury brands, especially those in luxuryclothing, perfume and accessories, dislike the same democratizingeffect.nouveau riche youngsters personify the ‘I-Me-Myself’ generation.Technologically, they do not prefer ostentatious machines such asVertu phones or Swarovski studded designs. They are more intosimplicity and efficiency of Apple products or power machines thatare Android based, email synched with heavy storage facilitieson Dropbox, and can run heavy imaging and entertainment apps.They use their phones as single point multimedia devices ratherthan one for communication alone. These young, luxury buyers areonline on Facebook Messenger or Whatsapp around the clock andcommunicate constantly through them even while shopping to bemore discerned about the things they are going to buy.Amongst the 26 to 35 years olds, media and content saturationis comparatively lower. Although advanced users of technologydevices, their platforms of choice are iPads and mobile devices.These individuals do notsynchronize media consumptionto one device they end upspending comparatively lessertime on both devices. Whatsappcontinues to be popular butis used more as an SMSreplacement rather than as aconstant messenger. This groupvalues the ability to switch off andengage in sustained interactionswith family and externals.Facebook for this group is justa platform for people to findthem on, but real conversationshappen via Gmail or Skype.Many of these luxury consumersare also moving away from thepopulist Facebook to more nichenetworks such as Path where they can share content with limitedfriends and family. As buyers, they are extremely alert to productinformation, try out more items, and demand individualized andcustomized servicing.Both groups, although distinct, share some similarities. Bothpossess a keen sense of value and a strong desire for uniqueness.The research shows that for these consumers, value perceptionis becoming more rationalized while the need for uniqueness isheightened. An example that illustrates this need for uniquenessis young buyers’ preference of shopping at Zara. Zara is affordablefashion, but luxury brand buyers flock to Zara because it is a cleverchoice for the fashion forward. While it stocks fashionable goods atlow costs, it allows young luxury buyers to mix and match a Zarapiece with a Versace trouser, together creating an ensemble thatis hybrid and unique to the creator. However, being fashionableis top priority and not the cost. Therefore it can be asserted thatSocial is antitheticalto luxury. Socialis democratic andaccessible whileluxury is exclusiveand inaccessible.
  4. 4. Kuliza Social Technology Quarterly Issue 07Therefore, the future of engaging theseyoung luxury buyers is the creation ofhybrid realities, the development of closednetworks and investing in unique, youthfulevents that will help establish strong brand-consumer ties.The hybrid reality concept introduceslatest spatial and social technologies suchas augmented reality, virtual reality andtouch screen technology to create specialexperience zones. Depending on theshoppers, a retail space can be turned intoa younger, wired space whereas for moremature buyers, the luxury retail spacecan be maintained. These personalizedexperiences will allow different age groupsof buyers of the same brand without makingthem lose the sense of being a privilegedbuyer. Buyers can then use these latesttechnologies to socialize their purchaseexperience. Instead of sending images onWhatsapp of clothes trial, they can invitein their trusted network of friends via videoshare into the boutique itself. The luxuryexperience of the brand then translatesnot only to one buyer but also to a groupof potential buyers at minimal acquisitioncosts for the company. Luxury here issocialized but not democratized. It gains atechnological edge which is folded into theguise of luxury to create an out-of-the-worldexperience that luxury buyers are constantlyon the lookout for.The research also indicates that young,luxury buyers believe that the place theywould like to interact with the brand andother fellow users is on the brand site. Thisshould help brand websites, who are oftenvisually sumptuous, to go beyond a visualappeal and improve their functionality andthus increase opportunities to engage. Inthe future, these sites will become the newbrand-led social networks. Buying memberswill connect with others similar to them fromaround the world united by a shared lovefor luxury. Luxury brands should capitalizeon their unique strengths - the wealthand social positions of their buyers - tocreate a semi socio-professional networkof High Networth Individuals. Brands thatwill be able to successfully engage theseconsumers using the hinge of powerrelationships, will achieve strong ties notonly between members but also with thebrand as the initiator of this effort.ReferencesMorphy,Erika.“Luxury Brands on Social Media:AllThey Have to Do is Show Up.” Forbes.30 Oct 2012.Kapferer, Jean-Noel and Vincent Bastien. TheLuxury Strategy: Break the Rules of Marketing toBuild Luxury Brands.Kogan Page Limited.2012.“Luxury brands and majestic FAILS: Loewe, or‘There is no such thing as bad publicity (exceptyour own obituary)’“ Appnova.02 May 2012.Gallo, Di. “Luxury Brand Burberry Moves Beyondthe Tartan.” Social MediaWeek.14 Aug 2012.Photo CreditsLeft: Jason HargroveRight: Mac Ivan

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