Fashion consumers have always been attracted to the exclusive nature of luxury labels — But what happens when the largest spending generation in history is willing to spend less on luxury items and more on heightened experiences? In a world when the ‘soon’ is already the new ‘now’, Millennials or Generation Y are disrupting the retail industry.
The difference between current and past generations is that they value experiences and memories over possessions; they now expect brands to align with their own personal values and passions and they are digital natives looking for instantaneous gratifications. This means buyers need to offer more than just great products - they must understand their current audience and adjust their retail formulas to fit the digital market, embrace the social media phenomenon, and provide personalised experiences.
Vogue China’s editor-in-chief, Angelica Cheung, explains the Millennial trend as a more organic method of consumption during the BoF VOICES live discussions: “they consume for the sake of consuming. They love things they want to buy. It’s not for any purpose”. China accounts for 40% of the global millennial generation with a rapidly growing consumer base. Millennials are more likely to find products across digital platforms, informing themselves first and sharing opinions before deciding to buy. In light of this shift in consumer habits, Cheung launched Vogue Me, a bi-monthly, special edition publication of Vogue China specifically targeting the post-1990s generation with tailor-made content. It provides print, social media apps, video and music sites to engage young celebrities with millions of followers and collaborates with brands on special projects.
Luxury brands are also capturing the attention of high-spending Chinese millennials through instant-messaging apps. More than half of the country’s population is on WeChat, with 900 million users. Born as an extension of the social-media phenomenon, WeChat partners with luxury companies to create brand interest and seamlessly connects them with consumers. The mobile app can be used to deliver real time news, share campaigns and act as an e-commerce and customer service interface all at once - Céline is the most recent fashion house to join. The WeChat strategy creates transparency with tech-savvy customers through personalised dialogues and an easy shopping experience, reaching an increasingly important millennial market.
One of the greatest assets of technology is the ability to connect retailers with customers like never before. Younger clients want to feel like they are part of a community where they can influence and learn from each other. Leaders in the industry strongly believe that creating intimacy between the consumer and the brand is essential to feel immersed in the story of a product and to create a sense of community. Antoine Arnault, C.E.O of Berluti, spoke on the topic at The New York Times Live Luxury Conference in Brussels: “Transparency, authenticity, sincerity - these are the three points of the communication triangle of a luxury house or group.” As people become more digitally connected every day, they seek openness about products, and brand identity and values. However, he warns “if (a luxury house) exposes itself too much or in the wrong way, then it breaks the spell of desire that binds it to its clients. Opacity kills love, total transparency destroys desire.”
While it is important to think and communicate digitally first, brands and stores are also shifting their strategies to offer memorable experiences and entertainment offline. Millennials want to feel they are living the brand they buy into. They look for experiences both in-store and online that incorporate what they value; sharing time with peers, realness, and being a part of something great. Uncovering different collaborations between brands, stores or celebrities are exciting opportunities for the consumer to feel immersed in the brand as they shop. For this reason, festivals like Single’s Day and Complex-Con attract a huge number of millennial followings.
In China, Alibaba’s record-breaking shopping festival Single’s day, integrates offline and online in their new retail strategy. Smart pop-up stores in malls are set up for the event, so that shoppers can benefit from high-quality luxury products and improved customer experiences with tech features. These include virtual stylists and makeup tutorials, facial recognition payment solutions and exclusive reward-based loyalty programs. This year’s festivities began with performances from local and international celebrities such as Pharrell Williams, which made the shopping occurrence a hit.
Similarly, the Long-Beach Complex Con event in America - a pop-culture marketplace for brands and retailers to debut collections and collaborations - attracts hundreds of young creative attendees each year. They partner with designer brands and celebrities for exclusive products, musical performances and interactive elements. One of the most anticipated sneaker drops of the year was a quadruple collaboration featuring ‘Reebok Ex-O-Fit Vintage Hi x BAIT x Stranger Things x Ghostbusters’. The merge between American retailer BAIT and the Netflix franchise was a successful mix of popular and celebrity cultures coming together with fashion and marketing, to entice a large millennial following. Only fifty pairs of shoes were released each day with a limited number of quantities available to win online. Collaborations make fashion desirable, creating an impact on the shopper and finding the balance between exclusivity and high end products.
Overall, millennials are proving themselves to be passionate shoppers, looking for emotional experiences and connections. They are challenging retailers to meet their millennial state of mind - to relate to them by being transparent, thinking digitally, and providing unique moments both online and offline.