Ask many high-end appliance dealers who their target audience is and they’ll likely describe what sounds like a typical high-earning Baby Boomer. More specifically, they may describe empty-nesters in their mid-50s or older who have worked hard through their professional life and are ready to enjoy the fruits of their labor by adding premium and luxury appliances to their dream home.
While that demographic snapshot has proven to be true for a long time, the last few years have shown a marked shift in what a luxury consumer looks like. And it’s more than just a normal attrition cycle in which one demographic ages out of the market and the next one takes their place. In fact, according to Bain & Company, millennials and Generation Z will make up 45% of the luxury market by 2025.
As a high-end appliance dealer, it’s important that you begin taking this new crop of luxury consumers into account as you think through your marketing strategy. But first, let’s take a closer look at who this new audience is, and then explore how you can tailor your approach to reach them.
Understanding the new luxury audience
Millennials and Generation Z are more than just individuals born after 1980. They think, act, and shop differently than preceding generations, and this is particularly true for luxury consumers. In their report, The Next Generation of Luxury, Pace Perspectives defines the new luxury consumer as “people aged 23 to 39 with an annual income of $150,000+, with fast growth in net worth expected. Their average age is 32 and their average household income is $416,000 with an average net worth of $1.7M.”
In our experience, dealers in more urban markets are on the leading edge of seeing this shift play out in the showroom. And as trends usually go, this one will continue to push down into mid-sized and smaller markets over the next few years. So what does that mean for your business?
Social media matters
If you haven’t yet implemented a plan for utilizing social media as part of your marketing strategy, now is the time. Today, 85% of luxury consumers use social media – each using an average of three platforms. And that number will likely grow as new generations enter the luxury market. In fact, 72% of Generation Z and Millennials use social media at least once per week, and Millennials are three times more likely to use social media to research brands and products.
From communicating with customers to reaching your local audience, social media has never been more valuable for your business. If your brand still doesn’t have a presence on Facebook, Instagram, and other social media platforms, there’s still time to implement a strategy.
Does your brand resonate with a younger audience?
Is your branding up to date? Branding that comes off as bland or out of fashion can give younger generations the impression that your business itself is bland or out of fashion. At the same time, refreshing your brand’s aesthetics to reflect a more modern style can help draw Millennials and Generation Z in.
What does your business stand for?
Aside from the visual impression of your brand, it is now more important than ever to consider the ethics and motivations of your business. In their report, Pace states that “Beyond just purchasing a product with a logo on it, the young luxury consumer is buying into a community of people with shared values and passions.” Community involvement and operating in a charitable and ethical way can give your business an important edge over your competitors.
Every marketing strategy has a shelf life, and embracing change is the best way to ensure that your business continues to thrive in an evolving market. While the new generations of luxury consumers present a need for an updated strategy, there’s still time to shift your marketing approach to include these new consumers. If you’re ready to plant the seeds for future growth, we’re here to help.