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The Evolution of Luxury Brand Marketing and Opportunities in 2024

While the last few years gave rise to heavy spending in the luxury category, recent reports show a sobering shift by shoppers. But that doesn’t mean they don’t want luxury – they just want it to be more accessible. Luxury marketers need to refocus and pay close attention to how purchasing behaviors are evolving. We have our eyes on a number of opportunities for brands in 2024.

Widening Market with Different Expectations: According to Bain & Company, the number of luxury consumers is expected to grow from 400 million now to 500 million by 2030 with an emergence of new consumers such as millennials, Gen Z and Gen Alpha who have different preferences and expectations than traditional luxury buyers. The expansion of luxury categories beyond fashion, accessories, and beauty to include wellness, home, art and technology, not to mention the increasing demand for luxury experiences such as travel, dining and entertainment, is also creating more opportunities for consumers with a niche for all things luxe.

Meet Digital-First Consumers Where They Are: By 2025, more than half (55%) of the luxury audience will be millennials or Generation Z, groups who feel completely at home on their preferred social channels. They’re active online creators and want luxury items for their own self-expression. They also value the recommendations of peers and influencers on social media. In fact, people are 3x more likely to read posts from a friend than from a brand itself and micro-influencer collaborations can help propel this. 73% of luxury brands are already collaborating with influencers and, according to a report by The Beauty Monitor, even more are expected to work with micro influencers (defined by 360PR+ as influencers with followings of 10,000 to 100,000) due to their ability to create content that leads to higher engagement and conversion rates compared to macro and celebrity influencers.

One of the most successful beauty brands to build a large community of loyal supporters who serve as not only their primary customers but also their biggest salespeople is Glossier. They have a truly digital-first word-of-mouth approach to skincare and beauty products and have utilized user-generated content (UGC) to turn many fans of the brand into nano and micro-influencers who spread the word about Glossier product. Through the company’s referral program, Glossier has an actionable network of more than 500 ambassadors who routinely post about their beauty routines and the products they love. Ambassadors also receive product discounts by participating.

Livestreaming on TikTok can also help luxury brands in several ways. TikTok Fashion Month, a now annual event during Fashion Month in September, saw the platform partner with influencers to provide fashion fans behind-the-scenes access and insight to the latest runway trends. Some companies are also partnering with influencers on TikTok livestreams that have a direct link to purchase.

Cunard, a luxury cruise brand, chose to promote an exclusive Arctic Circle cruise by inviting a crew of influencers to join the voyage on their luxury liners. They all had advanced photography and videography skills and a shared passion for travel, which allowed Cunard to gather extraordinary, authentic guest experience footage revealing its breathtaking Arctic Circle experience. Influencers’ in-the-moment sharing delivered a hefty reach of over 5 million social media users and a 12% engagement rate.

Source: Cunard Line, Instagram

The Physical Experience matters for luxury brands because it is a way to create a deeper and more emotional connection with their consumers while differentiating themselves from competitors. Known for eschewing trends and creating an aura of exclusivity, Hermes has designed immersive retail store experiences that allow consumers to engage with the brand in a more meaningful way. For example, the brand’s “Hermes in the Making” exhibition showcases the brand’s heritage featuring artisans from France who demonstrate their craftsmanship to customers.

Immersive experiences or Mixed Reality and Augmented Reality (AR) are experiences where users can interact with both physical and digital items and environments at the same time. Chanel’s Lipscanner uses AI to match a consumer’s image with a lip color from the brand’s expansive selection of 400 products. The patented technology incorporates “intensive algorithm training” and can identify exact shades and textures from images to render AR products onto consumers’ faces, delivering a compelling try before you buy experience. The launch of Chanel’s AI Lipscanner app provided a great platform for publicity, too, awareness with Vogue, Popsugar, Stylecaster, WWD, Elle, Forbes and others covering the brand’s innovative consumer experience.

Source: Chanel Lipscanner App.

The future of luxury brand marketing lies in understanding and adapting to these and other evolving trends that enable brands to connect to new, younger consumers with different preferences. And you can think of editors and influencers as VIP consumers – they want immersive experiences, too, and those experiences can provide the impetus or a backdrop for storytelling that differentiates your brand.

To learn more, email Cindy Riccio. Riccio founded CRC, a 360PR+ agency specializing in luxury, fashion and beauty brands, after serving in senior communications and marketing roles at L’Oreal and HanesBrands.

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