“Generation Y”, “Digital Natives” or “Millennials”: they are leading a new era and at the heart of all brands’ debates.
This generation, which represents 30% of the world’s population, includes all those born between 1980 and 2000. These future consumers are shaking up the codes and embodying many hopes while arousing the interest and fascination of brands. According to the experts of the Bain & Co firm, they will represent 45% of luxury clients by 2025. With 85% of the sector’s growth driven by young consumers, luxury is undergoing profound changes in order to respond to the widely different consumption habits of this generation.
This change has already been observed by some Luxury Houses that have granted a growing place to the Streetwear universe. Louis Vuitton and the arrival of Virgil Abloh as Menswear Art Director in 2018 and the LV x Rihanna collaboration are great examples. Dior and the arrival of Kim Jones, Balenciaga and Demna Gvasalia or Matthew M. Williams at Givenchy as well.
This seduction approach requires taking into consideration new modes of consumption.
So why is it useful to rethink the product approach through the prism of innovation?
A rupture is taking place between the historical consumers of luxury houses and this young generation that requires and shares many new demands and beliefs. Two of the main inclinations of the Millennials would be ethics and digitalization.
Ethics and Commitment :As sustainable development becomes a necessity, luxury is facing a generation with hopes for the future of our planet, forcing brands to rethink the luxury of tomorrow. In the midst of an ecological transition, the Millennials are calling for sustainability with more transparency and ethics.
Digitalization :According to a study conducted by B2X, the Millennials embody the “never without my mobile” generation by devoting more than five hours of their daily time on their mobile, considered as an indispensable tool. Clearly, they strongly favor the use of products based on the ATAWADAC “Any Time, AnyWhere, Any Device, Any Content” logic.
Should this constant need for connection and digital dependency, symptomatic of this generation, be taken into account by brands?
Understanding and identifying this population seems to be a real strategic shift. One of the main responses of Luxury Houses to these challenges is to create products dedicated to them. But how to make sure to reach this target without falling into anecdotal product?
“The new generations are very volatile and hard to capture. They force luxury brands to let go in a sector historically focused on mastery and control.”
Jérôme Grange, Media Director of Guerlain France
In De Rigueur’s experience, an innovative collection launch is often motivated by the need to add emotional value beyond the use value. To reach this generation, which is no longer as sensitive to the ancient know-how mastery, the elitist symbol or social status associated with luxury, but which values the experience provided, a strong product that delivers a new experience should be thought of.
In addition, brands confronted with “digital dependencies” (marked by digital culture and little consumption of traditional media) are encouraged to rethink their approaches and ways of selling.
The luxury sector, historically incompatible with the virtual world, has to adapt to new formats and decline its messages. Also, according to a Deloitte’s survey conducted by the firm Deloitte, 62% of Millennials are convinced that new technologies (automation, robotics, AI, etc.) are the key to future and synonymous with positive spin-offs, productivity and economic growth. Therefore, it seems relevant for these brands to follow this trend and move towards the Wearables by integrating smart and technological bricks into their products.
The duty of brands is not only to meet these expectations but also to educate the consumer with a revolutionary product that surprises and changes the way to consume. Indeed, it is not simply a question of integrating technology for technology’s sake, but of telling a story in a constructive and virtuous way.
The Millennials are destined to represent the bulk of the Fashion & Luxury clientele in the years to come and implies sweeping away the historical codes associated. But what about the perceived brand image?This challenge is a real gamble on the future, because knowing how to grasp and develop one’s own culture of innovation will enable one to be identified as an avant-garde player, who knows how to reinvent himself and embrace the world of tomorrow.One thing seems to be taking shape: the brands that succeed in taking the lead will be the first to reap the benefits in a long term manner.