Do higher income consumers make purchase decisions differently than the average consumer? How do they find out about new products? How much research is involved in making the decision to make a purchase or hire a service provider? As marketers attempting to reach this audience with advertising these are among the important factors to consider when developing and implementing a media strategy. Let’s take a look at some trends that can help a luxury marketer craft a more strategic media buy for their audience.
TREND #1: Modern Luxury: The Experience vs. The Object
When media buying for luxury brands a major factor to consider is that modern luxury is now less about acquiring material things and more about having richly rewarding experiences. As Ivana Taylor, of diymarketers.com, has observed, “the best way to market to the new luxury consumer is to position luxury items as simple living.
High quality and simple will allow them to spend money without looking like overtly in-your-face spendthrifts while other areas of the economy are suffering.” And the categories of luxury resort and travel, luxury entertainment and upscale food and beverage, along with other market segments that could be classified as “experiential,” are projected to continue growing in the next several years.
In other words, affluent consumers are likely to continue thinking in terms of experiences rather than tangible items. Luxury brands must position themselves to appeal to a new audience, one seeking an experience characterized by simplicity rather than ostentation.
TREND #2: Luxury for the Masses?
One reason for the robust growth in luxury brand media buying is the evolving definition of “luxury” from an indulgent and historically exclusive lifestyle to a different notion of luxury—the concept of democratic or aspiring luxury—that reflects the fact that a larger portion of the population can experience a “taste” of the finer things in life.
In this broadened sense of the term, luxury is not limited to the buying habits of an extremely wealthy person, but instead can include a Millennial entering the high-end market in a small but meaningful way. According to the article, “How Luxury Brand Can Prepare for Affluent Millennials,” Millennials differ drastically from Baby Boomers in the way they interact with and consume luxury brands.
This increasingly sizable portion of the population seems to view luxury as more aspirational than Baby Boomers, adopting a mentality that the author refers to as, “inclusive exclusivity.” “People who have money but live far from enclaves of luxury now can easily go shopping online,” says Rumble Romagnoli of Relevance Web Marketing.
The convenience of online shopping means that posh consumers all over the globe (and increasingly those in emerging markets) can access their favorite brands online and on-the-go, via improved mobile shopping experiences.
TREND #3: A Multi-channel Shopping Approach
Just as the Internet is facilitating the luxury shopping experience for a broader audience, social media also shows promise as a communication platform for luxury brands. A report by Four Seasons Hotels and Resorts revealed that 78% of affluent consumers are active on social networks and 65% of affluent consumers say brands without a presence on social media are out of touch with consumers.
Barbara Robinson, of StructureMarketing.com, has observed a major shift in the way luxury brands interact with customers: “The accelerating shift toward online engagement is positively impacting the brands that are proactive. Since luxury consumers are buying and spending more online, the market is ideally situated to thrive and grow via the engaging social media experiences and inbound ‘magnetic-attraction’ marketing approaches.”
Additionally, research by the Luxury Institute found that while 48% of shoppers with an income over $150,000 researched products online. Emarketer found that 74% of products researched online where completed in-store.
TREND #4: Trust “Tried and True” Traditional Media
Although spending for online media has surpassed print, traditional media remains an integral part of the marketing mix. Paid circulation for magazines may be down, but luxury marketers are still utilizing it as a way to reach their affluent clients. A recent example is Apple who took out a 12-page ad in Vogue, to announce their new line of watches which include a 18-karat gold version among the offerings.
Newsstand success is no longer a standalone metric for gauging publisher success, as digital print mediums are another key indicator of profitability. But digital is still growing, currently they only make up about 10 percent of luxury ads.
TV media buys are expected to maintain their current coverage of about 39% of total market share, according to industry analysts. Experts say television is still the world’s most powerful advertising medium, and for luxury brands, TV is an especially impactful media channel.
TV media buys in the categories of legal services, financial and insurance services and high-end automobiles remain popular due to consistent results.
For the luxury media buyer, keeping a finger on the pulse of trends like experiential luxury, “inclusive exclusivity,” and digital communication platforms will help to ensure continued success for your brand. As Barbara Robinson notes, “Brands that don’t take action, by engaging their customers in new settings or by responding to customer’s changing definitions of what is relevant to them, may vanish beneath the tsunami of real-time content.”
Your target audience may be changing before your eyes and it is up to you to make sure that your luxury media buys are in the right place, at the right time, and with the right message to appeal to consumers’ minds and (designer) pocketbooks.