[Estimated read time: 5 minutes]
One of the biggest buzz topics for marketers over the last 12 months would have to be the emergence of ‘’Millennials’’ consumer power. How many pieces of content (articles, studies,…) have we seen by experts trying to define this generation’s features and how to best communicate with them. The more I read on this subject, the more I realize that we, in the luxury industry, are wasting marketing dollars targeting increasingly obsolete consumer profiles. As challenging as it is to understand my 18 years old daughter at times, maybe I should really try to learn how she and her friends are connecting with luxury brands and adjust my communication strategy accordingly.
In the past, luxury brands positioned their brands to appeal to Baby Boomers. Those days are over. A new generation of customers have taken center stage for their buying power and unique relationship to luxury goods. Millennials are emerging as the prime target audience for today’s leading luxury brands. According to Unity Marketing, Millennials (aka Gen Y or consumers currently aged 18-34) will be the largest generational segment in the luxury market in the US by 2018 or 2020. Millennial spending on luxury fashion has grown at a rate of 33 percent a year and luxury jewellery spending has grown at 27 percent.
Boston Consulting estimates Millennials exercise around $1.3 trillion in buying power each year. Take note, luxury brands! This is how you can step up and claim a larger percentage of that revenue. The pathway for your marketing strategy is through social media, since, as SDL research indicates, 5 out of 6 Millennials connect with their favorite brands through social channels.
When Does a Luxury Become a Necessity?
Luxury becomes necessity when it becomes integral to how consumers define themselves; this perception is what luxury items have come to mean for Millennials today. The explosive growth of trends ranging from selfies to new social channels to extreme personalization indicate Millennials increasingly express who they are in terms of how others see them; luxury items are essential in communicating their place in the social scene and their appreciation for excellence.
Millennials love luxury brands, and they want “exclusive inclusivity“: the type of direct connection that comes from interacting with your brand over social media. For example, the USC Annenberg Center for the Digital Future found that 56 percent of US Millennials would agree to share their location with brands in exchange for deals at nearby locations. Millennials expect your brand to be part of their daily lives, and they value those initiatives that grant them true insider access or let them peak behind-the-scenes at the creation of luxury goods.
Instagram, Pinterest and Snapchat are the top social channels that luxury brands need to master for digital marketing. All three social networks prioritize high quality visual images, so they have become go-to channels for luxury brands seeking ways to develop their brand image and help Millennials visualize how these enhance their lives. These social channels let you interact directly with Millennials in their own language, in spaces where they are most comfortable.
Here are the three top social channels you need to master for digital marketing. These social channels let you interact directly with Millennials in their own language, in spaces where they are most comfortable.
Pew Research says 53 percent of Millennials are on Instagram. Another study shows that people under 35 years old represent 90% of instagram users. This social network is therefore the place to be to reach millennials who are known to spend an average of 29.9 minutes of their daily time on this platform.
Instagram is an essential social network to the eyes of these young people. It helps them to express their creativity and share their daily life with pictures which is sometimes easier than with words. Most importantly, Millennials use Instagram to discover the lifestyle to which they aspire most. The New York Times coined it “Instagram envy“.
This social network gives luxury brands a great opportunity to develop their branding using beautiful visuals.
An example of Dolce Gabbana’s posts made by models during the Milan Fashion Week.
Some luxury brands are already successful on Instagram; Dolce & Gabbana made a brilliant use of this social network during the 2015 Milan Fashion Week. Pictures were not only about Haute Couture and fancy show. The brand encouraged models to shoot selfies on the runway and post them on Instagram. Dolce Gabbana achieved high conversion rates while wowing Millennials enough to change them into devoted followers .
Pinterest, the creative bookmark social media recently announced 100 million active monthly users. A Pew Research reported that at least 34 percent of Pinterest’s users are Millennials. They represent a segment that is highly sought-after by luxury brand marketers. This social network is also well known for having a heavy female community since women represent 85% of Pinterest users.
Pinterest has the great advantage of being massively browsable; Millennials are able to look for a wealth of pictures in a short time.
Not only is this social media really influent on Millennials, but it is also the most affluent social channel with over 28 percent of users
earning over $100K/year. Pinterest as well as Instagram have the asset pf being both inspirational and aspirational, they are the perfect place for luxury brands to develop their brand image and play on beautiful visuals.
Marc Jacob’s Pinterest profile overview
The most famous luxury brand known to get the most of this Pinterest is Marc Jacobs. With a large community of 101k followers, the brand makes great use of Pinterest’s boards by pinning its fashion collections and assigning visuals to several categories. All the pictures are linked to the brand’s website, encouraging followers to have a thorough look at Marc Jacobs’ products.
Millennials account for a whopping 71 percent of Snapchat’s user base, in research from Cowen and Co, despite common perceptions this channel is for teenagers. This channel is the 3rd most popular social media for Millennials. Snapchat might seem inappropriate for luxury brands and quite tricky but since its release of “Snapchat stories”, the social network totally made the case for business and storytelling. Considering that 77% of college students are using Snapchat daily, luxury brands can benefit from a great exposure;
Snapchat offers one of the most effective ways for luxury brands to relearn and practice, “The Art of Seduction.” Indeed, Millennials fancy Snapchat; the social network is used for sharing fun daily moment with friends.
Some Snapchats made by Michael Kors brand during the New York Fashion Week
Michael Kors is the ultimate reference among fashion brands using Snapchat. By using this social media during the New York Fashion Week, the brand revealed the backstage of the show, exposing models runaways, celebrities shots… Playing with Millennials on a seductive way, the brand succeeded at capturing imagination and making the young generation dream.
Michael Kor brilliantly showed why Snapchat is the key to the industry’s future.
A New Meaning for Turning the Channel
In the next few years, Millennials will be the top buyers of luxury goods, and they will prefer the brands they interact with on social media. You need to innovate strategically to survive, which typically means engaging with Millennials through their preferred channels, since millennials seek out appealing campaigns that reinforce your brand’s high-quality image. Given the agility of global competition, luxury brands don’t have the luxury to wait.