CONSUMERS

To Post-90s Chinese, Luxury Is No Longer for Rich People

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Campaign Asia-Pacific

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This is the featured image caption
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An Ogilvy study says to make luxury matter to the post-90s generation of young Chinese, brands have to change six marketing rules. What do white-collar professionals, performing artists, college students,…

Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.

PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.

In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”

The Fondation Cartier pour l’Art Contemparain building in Paris

An Ogilvy study says to make luxury matter to the post-90s generation of young Chinese, brands have to change six marketing rules.

What do white-collar professionals, performing artists, college students, nurses, engineers, TV hosts, entrepreneurs, sales representatives, train drivers, airport traffic controllers, Airbnb hosts, and freelancers born between 1990 and 1999 in Beijing, Xi’an, Taiyuan, Wuhan, Chengdu, and Shenzhen have in common? According to Ogilvy China's qualitative research, they amplify pointed differences in knowledge levels and perceptions of the luxury category from the previous generation of senior buyers. And they all share a collective value system around 'how to become a better me', leading to new implications for the luxury industry.

1. From 'A Badge of Status' To 'A Badge of Me'

For the parents of the post-90s generation, luxury brands served as 'a badge of status'. A few classic luxury products served as universally-recognised status symbols. For their children, owning luxury products do not mean much unless they enhance their personal styles. The new game rule for luxury brands is to serve as 'a badge of me' to help the post-90s in shaping their unique individual image via a product portfolio that has enough variety, according to Ogilvy.

2. From 'Showing Money' To 'Showing Talent'

Twenty or thirty years ago, when someone wore a luxury brand, what did that communicate to other people? It showed they had money, or were proud of having money. However, the younger generation today does not like the feeling of being perceived as 'rich'. Instead, they would rather be seen as 'interesting' and 'talented'. Luxury brands should help the post-90s exhibit their talent and display their intellectual achievements, such as being well-travelled, rather than show what an extravagant life they live, according to Ogilvy.

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3. From 'Unapologetic Mentality' To 'Companion Mentality'

Luxury brands, unlike brands from most other categories, do not ask consumers for permission because they think the House knows best, and the consumer can either participate in the brand’s style or move along. This unapologetic mentality is almost always evident in the brand’s communication tone and store service. However, this needs to be changed for the new generation who deem the "formal" luxury store atmosphere to be a turn-off, according to Ogilvy.

4. From 'Scarcity' To 'Virtual Rarity'

Luxury brands were either very expensive or difficult to obtain, as scarcity marketing creates value. This requires adjustment for the post-90s generation. While they want to own something nobody else owns, they identify more with the feeling of privilege and of exclusivity, according to Ogilvy, quoting academics John Groth and Stephen McDaniel. One way to create 'virtual rarity' is regularly launching limited-edition collections that are related to post-90s’ hobbies and interests.

5. From 'A Lifetime Achievement' To 'A Lifetime Recruitment'

The old game rule dictates that luxury brands position themselves as the ultimate dream purchase. Older consumers were made to believe that they would only be able to afford a luxury bag, for instance, upon making a certain amount of money (typically one that takes them a lifetime to attain). This approach, when transferred to younger contemporaries, does not resonate. According to a Mintel study from May 2017, emotions associated with luxury are less about superiority for the post-90s. Luxury brands should start recruiting buyers at an early age and offer a mixture of products at each life stage to reward their self-improvement efforts.

6. From 'Offline' To 'Omnichannel Customer Experience'

In the past, consumer journeys were very simple. Today, there are many touchpoints in the process – as many as 85,000 different combinations according to a BCG study – from the discovery phase to the post-purchase phase. Moreover, not all touchpoints are created equal, evoking different levels of trust across different ones. Omnichannel customer experience is the panacea. Social CRM tools such as WeChat mini-programs have accelerated this in China, according to Ogilvy.

The full version of this report is available for download here.

Article originally published on Campaign Asia-Pacific. Republished with permission.

Cover image: Ermenegildo Zegna

Campaign Asia-Pacific
Campaign Asia-Pacific

Providing insights and intelligence into the ideas, work and personalities shaping the region’s marketing-communications industry, Campaign Asia-Pacific dives deeper into important subjects and presents the most compelling information that matters to businesses in the fastest-growing and most exciting communications market in the world. Campaign Asia-Pacific serves the marketing elite, those that are pushing creative advertising and communications to new boundaries, redefining brand experiences through multiple touch-points, both on and offline.

CONSUMERS

To Post-90s Chinese, Luxury Is No Longer for Rich People

by

Campaign Asia-Pacific

|

This is the featured image caption
Credit : This is the featured image credit
An Ogilvy study says to make luxury matter to the post-90s generation of young Chinese, brands have to change six marketing rules. What do white-collar professionals, performing artists, college students,…

Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.

PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.

In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”

The Fondation Cartier pour l’Art Contemparain building in Paris

An Ogilvy study says to make luxury matter to the post-90s generation of young Chinese, brands have to change six marketing rules.

What do white-collar professionals, performing artists, college students, nurses, engineers, TV hosts, entrepreneurs, sales representatives, train drivers, airport traffic controllers, Airbnb hosts, and freelancers born between 1990 and 1999 in Beijing, Xi’an, Taiyuan, Wuhan, Chengdu, and Shenzhen have in common? According to Ogilvy China's qualitative research, they amplify pointed differences in knowledge levels and perceptions of the luxury category from the previous generation of senior buyers. And they all share a collective value system around 'how to become a better me', leading to new implications for the luxury industry.

1. From 'A Badge of Status' To 'A Badge of Me'

For the parents of the post-90s generation, luxury brands served as 'a badge of status'. A few classic luxury products served as universally-recognised status symbols. For their children, owning luxury products do not mean much unless they enhance their personal styles. The new game rule for luxury brands is to serve as 'a badge of me' to help the post-90s in shaping their unique individual image via a product portfolio that has enough variety, according to Ogilvy.

2. From 'Showing Money' To 'Showing Talent'

Twenty or thirty years ago, when someone wore a luxury brand, what did that communicate to other people? It showed they had money, or were proud of having money. However, the younger generation today does not like the feeling of being perceived as 'rich'. Instead, they would rather be seen as 'interesting' and 'talented'. Luxury brands should help the post-90s exhibit their talent and display their intellectual achievements, such as being well-travelled, rather than show what an extravagant life they live, according to Ogilvy.

Join Luxury Society to have more articles like this delivered directly to your inbox

3. From 'Unapologetic Mentality' To 'Companion Mentality'

Luxury brands, unlike brands from most other categories, do not ask consumers for permission because they think the House knows best, and the consumer can either participate in the brand’s style or move along. This unapologetic mentality is almost always evident in the brand’s communication tone and store service. However, this needs to be changed for the new generation who deem the "formal" luxury store atmosphere to be a turn-off, according to Ogilvy.

4. From 'Scarcity' To 'Virtual Rarity'

Luxury brands were either very expensive or difficult to obtain, as scarcity marketing creates value. This requires adjustment for the post-90s generation. While they want to own something nobody else owns, they identify more with the feeling of privilege and of exclusivity, according to Ogilvy, quoting academics John Groth and Stephen McDaniel. One way to create 'virtual rarity' is regularly launching limited-edition collections that are related to post-90s’ hobbies and interests.

5. From 'A Lifetime Achievement' To 'A Lifetime Recruitment'

The old game rule dictates that luxury brands position themselves as the ultimate dream purchase. Older consumers were made to believe that they would only be able to afford a luxury bag, for instance, upon making a certain amount of money (typically one that takes them a lifetime to attain). This approach, when transferred to younger contemporaries, does not resonate. According to a Mintel study from May 2017, emotions associated with luxury are less about superiority for the post-90s. Luxury brands should start recruiting buyers at an early age and offer a mixture of products at each life stage to reward their self-improvement efforts.

6. From 'Offline' To 'Omnichannel Customer Experience'

In the past, consumer journeys were very simple. Today, there are many touchpoints in the process – as many as 85,000 different combinations according to a BCG study – from the discovery phase to the post-purchase phase. Moreover, not all touchpoints are created equal, evoking different levels of trust across different ones. Omnichannel customer experience is the panacea. Social CRM tools such as WeChat mini-programs have accelerated this in China, according to Ogilvy.

The full version of this report is available for download here.

Article originally published on Campaign Asia-Pacific. Republished with permission.

Cover image: Ermenegildo Zegna

Campaign Asia-Pacific

Providing insights and intelligence into the ideas, work and personalities shaping the region’s marketing-communications industry, Campaign Asia-Pacific dives deeper into important subjects and presents the most compelling information that matters to businesses in the fastest-growing and most exciting communications market in the world. Campaign Asia-Pacific serves the marketing elite, those that are pushing creative advertising and communications to new boundaries, redefining brand experiences through multiple touch-points, both on and offline.

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