Luxury is a life-long love affair between customer and brand, but how do you capture the interest of those at the beginning — the HENRYs (High Earners, Not Rich Yet)? And should we be anticipating a change in luxury consumer behaviour on the other side of the Covid-19 crisis? Walpole member The Economist Group’s latest research covers six markets: China, the US, France, UK, Japan and Switzerland, and explores the behaviours of the next generation of luxury consumers for insights into the post-pandemic marketplace.
The growing importance of experience is key, as well as the perception of time now as the ultimate luxury. However, product ownership still remains important, as does the in-the store experience, despite the proliferation of socially distanced digital creativity over the past year. Visible luxury may well come to define 2021 for HENRYs — as well as for HNWI — but, alongside, authentic storytelling continues to be important, particularly around sustainability. However, the Economist’s findings showed a big regional difference here, with significantly lower importance for HENRYs in China and the US. Elsewhere, pre-purchase searches around heritage and access to personalised content and experience continue to accelerate — simply monogramming a product just won’t cut it for this next generation of luxury consumers, who expect to be put in the driving seat themselves to create that individual connection.
The good news for retailers, though, is that luxury purchase intent appears stronger than ever; both HENRYs and HNWIs surveyed anticipating spending more on luxury over the next two years. Importantly, though, as the findings show, they are not homogenous groups, with crucial variations in lifestyle, product set and expectations that, if anything, have been amplified through the pandemic. As such, the key to lifetime relationship building with luxury brands for the next generation of consumer looks to be talking to them in ways that have real meaning for them, rather than treating them merely as a demographic.
To request a copy of The Economist's research, please contact Jamie Credland, SVP Client Strategy & Marketing, [email protected].