Times have changed for the luxury industry. Traditional luxury brands are still earning money in emerging Eastern European, Asian and LATAM markets where the rise of a mid-class, looking for prestige brands that radiate their freshly earned status, is fuelling growth of luxury items. But it is clear that the glamorous glitter is increasingly losing its golden appeal to Millennials in many Western markets. Most luxury brands in the Youth brand index won’t be found in the top 250. And some that were still there in last edition have dropped drastically in this year’s ranking. In the early 2000s, iconic luxury brand logo’s shouting “I can afford this stuff” were still part of the preppy Millennial lifestyle, but today visibly showing off is totally not done.
Being smart and saving money is the new cool for youth. Fashion retailers like Forever 21, H&M and Uniqlo know how to give Millennials the affordable catwalk look without burning money on stores that once thrived off the concept of chest logo billboarding such as Abercrombie & Fitch, American Eagle and Aeropostale, whom are all suffering. Lately A&F decided to remove the well-known logo from most of its clothing in the spring 2015 collection. Macklemore’s hit single “thrift shop” was all about keeping the dollars in your pocket and it’s a sign of times that even hip hop artists who used to brag about expensive champagne, Courvoisier cognac and ‘bling bling’ Mercedes cars have changed their lyrics. Today owning a house is the new bling thing. In studies 3 out of 4 Millennials would state “real estate property is the best indicator of success”, whereas less than 10% refers to expensive cars and only 5% to wearing designer fashion.
Hot tweetaway: Being smart and saving money is the new cool for #youth insit.es/1Gt0G65 by @Joeri_InSites via @CoolBrands #youth100 #geny
But let’s take a look at the 3 brands that DID make it to the top 250. Number three BMW is obviously supported by a herd of male fans, but still it seems to be the only car brand in the luxury top 20. Surprisingly, the brand has never consciously tried to appeal to the youth market. The German car manufacturer is using its other strong Mini brand within the family to recruit that demographic segment. BMW is a classic example of a brand that is not trying to appear cool and yet succeeds in connecting with Millennials more than any other car brand. The recent launch of two electric vehicles, the BMW i3 and sportive i8 did certainly contribute to the guilt-free luxury image of the brand keeping it hotter than Tesla for a youth generation that is obsessed with sustainability and urban mobility.
Number two Swarovski has grown from a family-owned cut crystal company to one of the world’s leading jewellery retailers. In recent years Swarovski has launched the Lolaandgrace youth-oriented brand with a range of accessibly-priced fashion items. It has a more relaxed and funky free-spirited image if you compare it to the more streamlined Swarovski collection. The company also understood that to keep the brand into a luxury premium environment, it has to focus on design. Swarovski has collaborated with more than 60 fashion designer for its collections including Viktor&Rolf, Maison Martin Margiela and Versace. Swarovski created a microsite and mobile app called “Passport to Sparkle” aiming at the globe-trotting Millennials. Shoppers can earn unique stamps through purchases worldwide and exchange them for discounts and prizes.
The number one luxury brand Chanel has shifted from a high-fashion inaccessible fortress to a more Gen Y and future proof retailer. It positively surprised Millennials by opening a store in London’s Covent Garden with a nail bar, beauty vending machine and flower stall. The Chanel No. 5 ad with Brad Pitt didn’t just appeal to Gen X women but landed near the top of the viral videos because it was boosted by parody derivatives of the ad. Chanel – and its head designer Karl Lagerfeld – have worked hard to retain or regain its air of exclusivity. It cut the list of distributors, refuses to sell most items (except for beauty products) online, and never holds sales in its stores. This approach makes the brand scarcer, hard to find and desirable. Chanel also extended its brand appeal to Millennials with the Coco Mademoiselle sub-brand for younger women.
Hot tweetaway: Top 3 luxury youth brands according to #youth100: @BMW @Swarovski @Chanel insit.es/1Gt0G65 by @Joeri_InSites via @Coolbrands #geny
As a last observation, I would like to point at the low scoring luxury watches brands like Omega and Tag Heuer. In this age of mobile technology and self-quantifying wearables like the fuelband or the UP24, luxury watches are literally missing the pulse of the Millennials generation. They better watch out for the Apple watch as a new entrant in this luxury segment. In recent years Apple has hired the former VP of Tag Heuer’s global sales and retail, the former CEO of Burberry, the former CEO of Yves Saint Laurent and the former marketing manager of GAP. I am very eager to see what kind of disruption this fashion dream team will bring in the luxury segment.
Hot tweetaway: Luxury watches are missing the pulse of #millennials, they better watch for #AppleWatch insit.es/1Gt0G65 by @Joeri_InSites #youth100
As published in the 2014 Youth 100 report by Voxburner.