Luxury consumers are evolving. So how are brands using and adapting to digital media?
Fast cars, high fashion, elite travel and fine jewelry. What was once an industry focused on catering to the rich and famous is now competing for increased market share, as America’s affluent audience continues to transform into a blend of millennials, Generation X and baby boomers who are working to earn high incomes. Wealthy shoppers in the U.S. spend more than $6 trillion per year, which equates to almost half of total U.S. consumer spending. With changes in the identity of who the affluent consumer is, luxury brands need to adjust their media strategies to create meaningful relationships with these new groups, and place an increased focus on cross-platform engagement.
Luxury market forecastAccording to Mintel, the luxury goods and services market has shown positive growth on both a domestic and international level. What used to be a market dominated by legacy brands interested in old money is now being inundated by those catering to millennials and Gen Xers with technology, customization and innovation. That said, premium brands in the luxury automotive, fragrance, beauty, fashion, watch and jewelry categories are facing increased competition.
In May 2016, Zenith released its second annual Luxury Advertising Expenditures Forecast, revealing the outlook of the luxury advertising industry on a global scale. The report, which looks at trends in 18 luxury markets, forecasted that luxury ad spend will grow 3 percent in 2016—an improvement from the slowing 1.9 percent growth in 2015 and 2.9 percent growth in 2014. Although the report does show that luxury industry ad spend is bouncing back, it is still pacing behind the total advertising industry’s growth rate, which comes in around 4.5 percent. In essence, luxury’s dominant challenge in the coming years will be...