Not just gas tycoons: how a brand can work with a luxury audience

The global market for luxury goods and services, after fluctuations and nervousness associated with stagnation over the past 3-4 years, has begun to show growth again. However, we are still very far from the pre-crisis levels, and, frankly, I am not sure that we will return there quickly. The positive dynamics is mainly inherent in Asian markets - China, Hong Kong, India and the United States. In Ukraine, the situation is not so rosy, although, according to CBRE Ukraine, more than half of the new brands that entered the Ukrainian market in 2018 are premium brands.

If the dynamics are positive and brands are entering the market, then it would be useful to understand how to work with our premium target audience: what is important to them, where to get them, and what to say to them?

Let's look at the audience itself

Generation Z is slowly and steadily entering the market, influencing X and Y with its values and approaches to life, oddly enough. Thus, it is fundamentally changing the attitude towards brands and the consumption process.

The premium audience is now not only gas tycoons, but also young entrepreneurs, IT millionaires, startups - this class has literally burst out in the world, including Ukraine. Passionate about their business and life itself, people for whom status in the form of a “crystal chandelier or diamond ring” does not make sense, are nevertheless ready to spend a lot of money on pleasure and comfort. The global market for luxury goods and services after fluctuations and nervous Living where you like is drinking coffee in the morning on a terrace with a bird's eye view of Kyiv, flying business class and spending tens of thousands on rest and relaxation.

The premium audience is now not only “gas magnates” but also young entrepreneurs, IT millionaires, startups - this class has literally burst out in the world, including Ukraine.

The global luxury goods and services market is recovering from fluctuations and nervousness Values and expectations of luxury goods and services are changing

Expectations of environmental friendliness and sustainability are being added to the high quality of brands. No refined products, luxury is the norm - this is how they want to feel.

Self-expression through the brand and product characteristics are so important that high cost is often perceived as a “side effect” that can be ignored if everything else - service, communication - is at the same high level.

They promote the value of “living here and now,” and are not ready to wait if they really want something. But, on the other hand, they are ready to go through a lot of options, choosing the best one. But having decided, they want it right away.

Where to get it?

This is probably where digital comes in, as expected. If a couple of years ago, luxury brands avoided the Internet, now the market is showing an average increase of 20% from year to year in the sale of luxury goods and services through digital. Brands have begun to invest in the development of digital communication channels and build their own platforms, with sales exceeding 30% according to global statistics. Moreover, tools are becoming available on the Internet for the Ukrainian market that allow you to accurately identify this audience and deliver messages to them in a personalized way. And deep analytics allows you to accurately assess and calculate the cost of one client. And if necessary, quickly adjust the promotion strategy.

What to tell them?

Not to say! It's about showing or making it feel. Emotion, identification with the brand or product, involvement and response are important in luxury brands. Long texts are useless here. But bright visuals, short emotional slogans, and interactivity are the way to go. This is also due to the fact that she has little time, which means that the contact should be very easy to understand.To live where you like - to drink coffee in the morning on the terrace with a bird's eye view of Kyiv, to fly business class and spend tens of thousands on rest and relaxation.

The premium audience is now not only “gas magnates” but also young entrepreneurs, IT millionaires, startups - this class has literally burst out in the world, including Ukraine.

The process becomes important, not just the result

Not to tear off the jeans at any cost, but to have fun and a certain buzz from the shopping process itself. This gives a certain head start to online shopping - the new generation and the active present feel more comfortable with online shopping while lying on the couch.

As I said at the beginning, this segment of the target audience is not so clear-cut. This BUT, which is especially characteristic of the post-Soviet space, is that the luxury audience actually consists of two parts. The real one and the fake one. The real one is the one that can really afford this segment of services and goods. And the fake one, which I call “in a mink coat, with a 10th iPhone in a minibus” or “rich people without money”, are those who need to appear that way. And it seems that this is the same audience in terms of consumption, but the emotions to which it reacts and the places where it can be found are completely different from the first group.

And this is one of the most common mistakes when building a strategy - to generalize these two subgroups. This is especially true for small purchases or services. If a Bentley, for example, can only be bought by a real “millionaire,” then a subscription to a super-premium spa or the latest iPhone model can also be afforded by a fake one.

Therefore, it is important to understand this and simply take it into account in communication. Then you can make both the first and second segments happy with your brand.

The luxury audience actually consists of two parts. The real one and the fake one.

And finally, some statistics based on our practical experience. From our experience in online projects with a luxury audience, the following behavioral features can be observed.

1.  They read less and interact better with content in the form of graphics and pictures.

2. Spends less time on the site, on average by 20%.

3. At the same time, on average, they use 30% more touches, i.e. they visit the site either more times or through more channels.

4. But its conversion rate is higher after interaction. And on average by 50% - that is, by leaving a request or making a call, it is more likely to be converted into a transaction.

5. Discounts and promotions work very well. It would seem that in a segment where the price is not important at all, its announcement of a 10% reduction can increase sales by 20%.

Translated with DeepL.com (free version)

So, what can be recommended for premium brands to not only maintain but also expand their market presence?

1. Go digital - your target audience is there, but you need to find it (it's not easy) and communicate with it properly.

2. Remember that not only the result is important to them, but also the way. This means ensuring your presence in all the channels where they are. But keep a balance - more than 20 touches per month can make her add you to the blacklist.

3. Sharing emotions in communication, owning and using are different! Decide what you have and build your communication from there.

4. Add environmental and social responsibility to the brand. Based on the three stages of consumer behavior: 1 - status; 2 - service, care for one's comfort; 3 - spirituality, self-realization, social responsibility. Remember that Ukraine is at the stage of mixing all three types. The first is not dead yet, and the third is already in full swing.

5. Don't forget about creativity. It is able to touch and attract the attention of the most skeptical rich.