High-end streetwear is where luxury brands are finding their growth. This year alone, global sales of this segment have contributed upwards of 5%, bringing the total sales of luxury brands to around €263 billion ($309 billion) according to an analysis done by leading consultancy firm – Bain and Company.
Luxury Brands were in a bit of a flatline over the past two years. However, with streetwear making a revival among the younger customer base, we can expect around 5% growth yearly until 2020. “Customers are becoming younger, and that is very good for the mid- and longer-term survival of this industry since the younger generation seemed to be a little detached from luxury brands,” said Federica Levato, a partner at Bain & Company.
Millenials and generation Z customers are in the crosshairs of many luxury brands. This is evident with the ever-evolving influencer marketing arena where social media and celebrity influencers hawk goods as part of numerous communication strategies.
“There is a big market of €2.5 million for luxury T-shirts, for example, that is growing very fast. And a half-a-billion-euro market for rubber sliders, which is very unusual in this market,” Levato said.
It is not all roses though because bringing in younger consumers is a balancing act of sorts. It is about how the youth live their lives as compared to work wear and other trends from yesteryear. This means luxury brands when co-opting this dress sense can easily be copied by Fast fashion outlets. The ideas are Open Source and not exactly the overly eccentric or innovative playground of high brow designers from the 90s. This can be difficult to stomach for luxury brands.
To counter that, Levato said, luxury brands are putting more emphasis into branding activities including Instagram Stories, creating relationships with influencers and making stores unique in each city to attract both tourists and domestic shoppers.
“Once it was all about beautifying a product. Now product is just one of the many levers you use to maintain and capture your customer,”
This is where platforms such as WHEN come into play, content is king, Experiential shopping is key. In a market where many of the product designs can get homogenous in their aesthetic, unique experiences are needed. You have to entertain the shoppers, you have to educate the shoppers, you have to reward the shoppers. Luxury brands, luckily have the budgets and the clout to differentiate themselves in this area.
Here are a few things, a forward-looking luxury brand can do on WHEN:
- Create content that anchors the brands and shows they understand what the younger generations feel and what they love
- Provide promotional goods tied to an interesting marketing campaign or cause. These goods are more affordable and provide an entry point for those with less disposable income (but are upwardly mobile so they will be able to afford the brand in the next year or two)
- Be socially active and aware. Have an opinion. Show boldness. that is the only way to stick out in an increasingly saturated market.