Insights Series

Reimagining Luxury, Embracing new desires and demands

tycadmin

17/07/24

Thoughts Piece

Embracing new desires and demands

Embracing new desires and demands in the luxury market allows brands to thrive in the competitive market. As consumer behaviours evolve and markets expand, the challenge remains for luxury brands to remain authentic, relevant, and compelling in their narratives, products and services.

We’ve shared our insights on shifting codes, new consumer expectations, and geographical nuances and focus on how brands are utilising the new codes to master the art of storytelling to thrive in this competitive market.

Introduction

Consumers

Brands must navigate the rising complexity of targeting multigenerational consumers. With the “greatest wealth transfer” underway, Baby Boomers are set to pass an estimated £42 trillion to their children. Gen X and Millennials are entering or are already in their peak income years.

Growth of the luxury market

Consumers

Millennials and Gen Z drove the entire growth of the luxury market in 2022, and Gen Z is projected to account for 30% of luxury purchases by 2030.

Additionally, Gen Alpha’s spending is expected to grow three times faster than that of previous generations.

This multigenerational complexity presents a challenge. While we often discuss mindsets over generations, brands must understand these generational nuances to effectively connect with and bridge different mindsets.

New Codes of Luxury

Emotion, Responsibility, Discernment, Acquisition, Elevation

Emotion

Enhancing, transforming, and bringing meaning

The new code of emotion in luxury is about creating experiences that deeply resonate with consumers, transforming ordinary interactions into meaningful moments.

This emotional connection can elevate a brand, making it an integral part of a consumer’s lifestyle and identity.

Summary

New Codes of luxury

In the evolving landscape of luxury, traditional codes of craftsmanship, quality, and exclusivity are complemented and expanded upon by five new codes:

Emotion, Responsibility, Discernment, Acquisition, and Elevation.

This record growth underscores the industry’s resilience and adaptability in an evolving economic landscape.

The luxury market achieved significant milestones in 2023, reaching €1.5 trillion globally with an impressive 8% to 10% growth from the previous year.

Source: Bain & Co

Case Study

Arc’teryx

Arc’teryx Responsibility

Arc’teryx champions sustainability through ReBIRD™, promoting circular economy practices in outdoor apparel.

Initiatives include repair workshops, garment resale programs, and up cycling efforts, aligning with consumer demand for eco-friendly products and responsible consumption.

Over 70% of consumers globally prefer brands that demonstrate environmental and social responsibility, underscoring Arc’teryx’s appeal with its sustainable initiatives and consumer-centric approach.

Source: Source Optimove