Getting into the Mindset of the Affluent Consumer
Brands such as Louis Vuitton, Audi and Tiffany have slowly begun diminishing, even removing, their logos in order to appeal to mass consumers. Patron has opted for less gilding on its tequila bottles. Emirates airline has re-worked its boarding process so that coach passengers are no longer exposed to first class living. Homemade Etsy fashions are now considered a form of luxury. And we can now buy Michael Kors perfume at big box retailers. (source: Journal of Marketing Management, 2015)
Consumers’ mindsets about what is considered luxury, and their purchase behaviors surrounding how to attain such products and experiences, have shifted through the decades. With the dawn of the Industrial Revolution, the idea of luxury – and the products and experiences that defined it – became more accessible through the mass production of goods and services. However, in more recent times, and especially in light of the recent global economic recession, consumers have rethought their relationship with the “things” in their lives, and the value that such things and experiences bring.
So what does that mean for today’s luxury brands? According to Annalect’s recent proprietary study (available for download in the link above), affluent consumers– aka Affluents – expect a lot when it comes to luxury, and they look well beyond the price tag when thinking about what makes a product/experience luxurious. While Affluents expect high-quality (especially if there is a steep price tag), they also look for exclusivity, personalization and top-notch customer service (during the purchase process as well as post-purchase). And even when those criteria are met, Affluents are still quite selective. While they want the best possible price, they also consider whether a brand is socially responsible. It’s no wonder that a majority of Affluents feel a sense of pride, instead of guilt, after making a luxury purchase.
Furthermore, Affluents have a set of expectations surrounding technology in the luxury marketplace – regarding how a brand uses technology as well as how a brand enables their consumers to use technology. Contrary to what we might believe, Affluents actually purchase luxury products equally online and in-store. They demand a user-friendly online experience when browsing and/or purchasing on a luxury brand’s website. For them, technology has positively enhanced the way they shop and, more importantly, their perceptions of luxury goods and services. A win-win for both consumers and retailers, as there are now more avenues to shop for luxury.
Looking ahead to 2016, Affluents are quite optimistic about their spending potential. They report that their personal investments and quality of life are on the rise. In fact, they intend to spend more on luxury experiences and products in the next 12 months, specifically on travel and tourism. And, for Affluents, travel is often a means to an end; many Affluents select travel destinations they know will provide plentiful opportunities for them to purchase luxury products and services – for themselves as well as for others.
Marketers should aim to understand the mindset of Affluent consumers, especially regarding their expectations of what makes a product/experience luxurious, and what motivates them to purchase. Marketers could leverage this understanding in their branding and communication efforts with their consumers. Remembering that Affluents look beyond the price tag when considering what makes a product/experience luxurious, and importantly, what makes them feel proud after such a purchase, are insights marketers can use in their brand positioning. This opens the door for many product categories to create that coveted “air of luxury”.