Luxury brands and the modern consumer: Insights from the Walpole British Luxury Summit

The Walpole British Luxury Summit is a thought leadership event featuring talks, panel discussions and live conversations that explore the challenges and opportunities facing the luxury sector. LEAP’s luxury brand specialists, Senior Account Director Natalie Lennon and Content Development Director Madeleine ‘MJ’ Evely, share their key takeaways from this insight-filled event.

What were you looking forward to hearing about at the Walpole British Luxury Summit?
Madeleine 'MJ' Evely at Walpole British Luxury Summit

Madeleine ‘MJ’ Evely at Walpole British Luxury Summit

 

MJ: I was hoping to learn about trends among modern consumers and how these trends are going to affect the way we market luxury goods.

We know that these are consumers whose needs are everchanging. A nice advert in a magazine, like you’d see years ago, isn’t enough anymore. Nowadays, brands need to speak to their audiences in so many different spaces. And that leads to the question: How does an iconic brand speak to its audience on different platforms?

 

Natalie Lennon at Walpole British Luxury Summit

Natalie Lennon at Walpole British Luxury Summit

 

Natalie: I wanted to get a better understanding of what heritage brands need to do to serve the modern consumer. Increasingly, we’re seeing well-established brands try to pivot towards a younger audience, some with more success than others. How does a luxury brand respect the heritage and the global positioning that they’ve always stood for whilst talking to a consumer that’s increasingly demanding so much more – authenticity, personalisation, transparency and niche marketing strategies?

What topics were featured at the summit?

MJ: The speakers covered so many topics, from AI to personalisation, new audiences and regional audiences, from bricks and mortar to eCommerce.

 

Katie Prescott Business Editor at The Times at Walpole British Luxury Summit

Katie Prescott Technology Business Editor at The Times

Local audience resonance within global marketing production is a theme that’s close to our hearts at LEAP. What insights can you share about regional audiences and the luxury sector?

MJ: In Jasmina Banda’s talk about Middle Eastern luxury consumers, we learned that although EMEA customers make up a huge proportion of luxury goods sales, not enough brands are speaking to them in a personal and bespoke way. These consumers are expecting an Arabic-first comms strategy, including representation and messaging, not English campaigns translated into Arabic.

This really resonated with us and our cultural consultancy offering – we have people on the ground, immersed in cultures across the globe, to tap into these local opportunities. Brands will need to start adopting these services soon if they want to resonate with their global audience.

Natalie: EMEA customers expect an upholding of global brand standards but with local relevance.

There are a few examples of brands who are starting to tailor their marketing strategies specifically for these markets. The new Valentino store opening in Qatar was where the brand’s new look was first revealed and Dior’s Lady Art Bag which featured the work of Saudi artist Manad AlDowayan was exclusively released in the Middle East. These initiatives  demonstrated an appreciation and understanding of local tastes and trends. But such examples are outliers.

Brands could do so much more with local first brand strategies.

What other regions should the luxury sector be thinking about more?

Natalie: Jing Zhang, the global editor in chief of Jing Daily shared some fascinating insights. The Asian market operates in a sort of bubble, but it is also a glimpse of what our future will be. Trends that start there spread to the UK and the rest of the world.

MJ: We heard about how China’s post-pandemic reopening is massively affecting the sales of luxury goods. But it’s not just because Chinese travellers are visiting new cities and buying things now. Sales of luxury goods in China continued there, even when they were closed off from the rest of the world because of the pandemic. Since that time, the rest of the world has fallen behind in finding out what trends have been developing there.

We learned that in China, the value of luxury brands and association with status comes from the connection with education, arts and culture. Association with celebrities is no longer as relevant to the evolved Chinese luxury consumer.

Natalie: Asian luxury consumers are less incentivised to purchase because of a famous global ambassador. But if the product launch is an event at a gallery or in collaboration with an arts institution, this will elevate the brand in the mind of the Asian consumer. It’s becoming important to show the link between luxury goods and intellectual and cultural pursuits. Buying luxury goods becomes an indication of your understanding of art and culture and demonstrates your elevated taste.

MJ: We’re seeing this trend start to extend across the rest of the world, for example the V&A collaborates with luxury heritage brands, and they in turn are starting to collaborate with artists tapping into culture to create elevated products and experiences.

What other trends are growing in the UK?

MJ: We’re seeing a related theme among generations Z and Alpha in that what you wear or buy signals status and demonstrates your values. These generations have a greater attachment to minimalist design instead of flashing brand names. These consumers care more about the craft, longevity and ethics of the brand as well as the opportunity to own personalised items. There’s a rejection of fast fashion, throwaway culture and opulence.

 

Mary Portas and Mark Faithfull at Walpole British Luxury Summit

Mary Portas and Mark Faithfull

 

As Mary Portas explained, for businesses to succeed, we need an uplift in values – not purpose-washed marketing. Flashy brand names may have been status symbols in the 90s; now we’re shifting into what she calls ‘status sentience’.

She shared the example of ‘Who Gives a Crap’ toilet paper. Whereas once we’d have had luxury branded goods on display to show our status, people now want others to know that they are moral and make ethical choices by having sustainable brand toilet paper rolls.

The new status, the new showing off, is buying brands that have respect and ethics embedded in the heart of their brand DNA.

What else is important to different generations of luxury consumers?

MJ: There was a lot of talk about personalisation and a brand’s ability to adapt to speak to people on a more bespoke level.

Natalie: We heard some interesting statistics. GenZ represented one-fifth of luxury spend in 2023, and this generation is expected to drive the most growth in that sector.

Analysts are also finding that each new generation is entering the luxury market at a younger age. For Millennials, it was 18; for Gen Z, it was 15. The areas that are driving the most spend on luxury are opportunities to purchase unique products and ‘money can’t buy’ types of experiences.

 

Marco Fedrigo Associate Partner at Bain & Company at Walpole British Luxury Summit

Marco Fedrigo, Associate Partner at Milan, Bain & Company

 

MJ: Luxury experiences are acting as a form of escapism from the cost-of-living crisis for a lot of consumers. Those experiences can even be brought to life within the metaverse. In fact, the first touchpoint for luxury brands among Generation Alpha is taking place within virtual worlds as we speak.

Natalie: Online and offline experiences are fully blended for these generations and a monobrand experience is imperative to success. In other words, your brand’s tone needs to be consistent wherever you are but in a way that is tailored to that space, whether that’s in metaverse or real-world spaces. Interactions need to feel authentic and relevant to the spaces where audiences are engaging with your brand.

MJ: To reinforce the importance of younger audiences, Chris Sanderson from Future Lab shared a revelation that came from working with a Lamborghini focus group. The first time that participants knew that they wanted to own a Lamborghini was at the age of four. This is why brands can’t reject the younger generation and the fact that they spend their time in the metaverse.

Natalie: Nowadays, a brand’s digital agility is expected. It’s not a bonus; it’s a minimum. As an example of brands moving forward on this, Gucci have just hired a CEO of Gucci Vault and Metaverse Ventures.

How else does personalisation come into play for the luxury sector?

Natalie: Chris Sanderson asserted that the one-size-fits-all notion of marketing will be gone in the next few years. He shared the statistic that 63% of audiences surveyed want personalisation from brands if it comes from 1st party data (not 3rd party data which is perceived negatively).

He posed the question, “can you industrialise the bespoke to get content that speaks to people on a marketing platform?” The answer lies with AI. There is a growing need to invest in AI because a multi-touch customer journey is increasing, and younger generations of shoppers expect a tailored search function.

The goal for luxury brand marketers is to create serendipity. In other words, put yourself in front of the consumers at the right time and in the right words, so it feels like fate. He shared an example of the integration of social data with brand apps to create a personalised user experience: L’Occitane uses data from social searches to customise what the viewer sees on their app.

What are some of the other challenges facing luxury brands?

MJ: The number of places that brands are expected to be is growing so much, so quickly. Years ago, it was print, TV, radio, and OOH then digital, then Meta. Now it’s growing to include metaverse spaces and new, disruptor social platforms like TikTok and Discord. Marketing budgets are having to stretch so far to reach all these touchpoints.

That leads to the question: are we risking the long term of what brands can do because we’re relying too much now on on-demand data rather than thinking about how to invest for the future? Or, for example, if we invest in metaverse now, will we find that in 10 years we have futureproofed ourselves?

Natalie: Digital and social have made it easier for challenger bands to saturate the eCommerce space. It might be that automation and AI are going to free up resources and enable brands to get into so many more spaces.

 

Helen Brocklebank, CEO Walpole British Luxury

Helen Brocklebank, CEO Walpole British Luxury

 

Is there something that you learned at the event that you’d like to apply to LEAP’s work with luxury clients?

MJ: I think the key message is that you could be everywhere, doing everything, and there’s still more you could be doing, so you need to trust your data, trust your brand, trust your agency partners, and trust yourself not to spread too thinly. Strategise where your budget is best placed. Explore and welcome new technologies. Don’t let it overwhelm you – let it inspire you!

Natalie: Historically there’s been a reluctance by some luxury brands to engage with digital spaces and open up dialogue with the consumer, but as new generations enter the market, such reluctance will hinder growth and alienate these digitally native shoppers. While pushing the brand boundaries with new marketing platforms can seem daunting, it can also open up huge possibilities, and I think that’s an incredibly exciting opportunity for luxury brands.

What are the most important points to remember from the British Luxury Summit?

Natalie: An omnichannel experience and consumer journey is not just important, it’s an unavoidable necessity.

MJ: There is hope for the continued success of luxury industry because in times of global economic crisis, the luxury sector is still thriving, and it will continue to do so as long as we adapt to the needs of the modern audience.

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