Millennials change the luxury market: experience becomes more important than possessions
BrandTrust's third luxury study shows that wealthy Swiss people prefer immaterial luxuries, such as free time, to material luxuries.
On Tuesday, BrandTrust hosted its traditional New Year's aperitif in Zurich and presented the results of the international study on the impact of digital transformation on luxury brands. Around 50 clients and friends of the house discussed what luxury means in the age of digitalization and what luxury brands need to do to remain attractive to millennials in Europe's largest hotel suite at Atlantis by Giardino.
The Royal Residence at the Atlantis by Giardino hotel in Zurich is the largest hotel suite in Europe. It was designed especially for the royal family of Qatar. Normally, it is not open to the public. For the management consultancy BrandTrust, the hotel made an exception; and thus provided a fitting setting for the discussion of the latest study with Philippe Frutiger, director of the Giardino Hotel Group, Christine Hutter, founder of Moritz Grossmann, a luxury watch brand from Germany, and Klaus-Dieter Koch, luxury brand expert and founder of BrandTrust.
The third luxury study by BrandTrust shows that wealthy Swiss people prefer immaterial luxuries, such as free time, to material luxuries (see chart below). Travel is the most important luxury: as a way of escaping constant accessibility and switching off mentally. It is virtually the new No.1 luxury good. The Millennial generation in particular equates travel with a luxurious and fulfilling lifestyle. "It's about something they can't just buy at the store: Experiences and adventures. Personal encounters and human closeness take on a special significance for Millennials in an increasingly digital world," explains study co-author Klaus-Dieter Koch.
The market volume of luxury goods is proving to be enormously robust and steadily growing. The luxury industry seems less susceptible to fluctuations compared to other industries. Nevertheless, the third BrandTrust luxury study shows that a lot has happened in the last six years: For Millennials, Instagram accounts of luxury brands are very important. Experiences that are "Instagrammable" will become a highly differentiating brand touchpoint in the customer journey in the future. The more unique and brand-specific such experiences are designed, the higher the appreciation for the brand. The monobrand store in an exclusive location - still number 1 on the importance scale today - will become significantly less important in the next few years and fall to number 13.
"Millennials want unique items, something personal - even when it comes to watches," says Christine Hutter, founder of Moritz Grossmann, luxury brand from Glashütte. "Hotel brands are becoming less important, and the self-dramatization of customers is increasingly taking center stage. As a result, people themselves are becoming brands," explains Philippe Frutiger, director of the Giardino Hotel Group.
"Luxury brands need to know the movie Millennials are making about themselves and plug into it. That's how they become relevant to the future generation of customers," explains Klaus-Dieter Koch, luxury brand expert and founder of BrandTrust.
Klaus-Dieter Koch, author of luxury studies and Managing Partner of BrandTrust with the team: Johanna Otto-Erley, Sarah Bömer, Benedikt Streb and Eva Wandhoff (from left).
