Author and politician Anthony Crosland once said, “What one generation sees as a luxury, the next sees as a necessity.” Given the explosive growth of the sales of luxury goods as new generations start exercising their spending power, we might just have to agree.
Statista reports that online luxury sales are projected to grow at twice the market rate and capture 18% of all sales revenue by 2023. With a new demand for high-end goods by up-and-coming generations, luxury retailers are eager to capture their share of the emerging market.
But not all retailers are prepared to evolve with and adapt to this ever-changing market. Here, we offer six strategies you can use to appeal to a new set of customers and grow your luxury brand.
1. Expand Internationally
You’ve gotten into a groove selling domestically, but sales have stalled. You know there’s a whole other world to sell to beyond your borders, but promoting your products overseas feels overwhelming: You’ve got to adapt to new languages and currencies, manage new payment preferences, and understand other countries’ taxes and customs regulations.
But expanding your reach to hot overseas markets is an investment you should consider making. After all, most regions of the world have seen their share of global luxury spending rise in the last few years, and shoppers are estimated to spend $4 trillion online by 2025. With some careful planning, you can safely and successfully sell outside your border and reach new markets.
2. Promote Sustainable Sourcing
Consumers worldwide are becoming more aware of the impact their purchases have on the world around them, and they’re drawn to merchants who take accountability and responsibility for their global footprint. Google reports that searches for “sustainable fashion brands” has increased dramatically in the last several years, and there have been triple-digit increases in sales at sustainability-driven companies.
Take advantage of this shopping shift by:
- Implementing a more sustainable approach to developing and merchandise and then communicating that to customers on their websites
- Updating product descriptions to promote carbon-neutral and sustainable fabrics
- Promoting your company’s environmental initiatives — like zero-waste policies, renewable energy sources, and green building strategies
- Sharing your commitment to reducing packaging and unnecessary filler during shipping
While these approaches require significant effort and a true commitment to sustainability, they’re also amazingly effective at garnering the attention, shopping dollars, and loyalty of the customers who value this approach.
3. Embrace the Secondhand Market
Consumers are willing to invest in timeless pieces they know will last for decades. And if they decide not to hold on to the pieces themselves, they know these investments will hold their resale value when the buyer trades the pieces in for new-to-them luxury items or resells them.
The secondhand market in Europe grew to €22 billion in 2018, and the trend is similar worldwide. This spectacular growth is thanks in large part to younger customers, who are committed to supporting circular economies. As a result, they’re often looking for ways to resell their luxury items and then reinvest in other quality goods on the resale market, whether it’s with vintage resellers or online marketplaces like Poshmark or Depop.
Luxury merchants can take advantage of this active secondary market by promoting the longevity of their products and even offering repair and maintenance services on items like handbags and watches to keep resale values high. Brands like Coach offer a year warranty on the original purchase of their leather goods, but they also offer repairs performed by Coach craftsmen to keep their goods looking and performing like new for generations.
4. Expand Your Target Demographic
No longer are luxury items exclusive to older, more established customers. New cultures and subcultures have an increasing interest in (and influence over) the high-end market, and brands who pay close attention to these evolving trends can capture the lifetime value of these shoppers.
Consider millennials, who are becoming more established in their careers. As they approach the peak spending age, they’re eager to use their spending power to invest in themselves. Generations Y and Z are also entering the market, accounting for 33% of luxury purchases in 2018 and an estimated 55% by 2025.
But these aren’t the only customers you’ll need to focus on. You’ll also want to identify the cultural, size and gender preferences of your prospective customers. This means customizing your offerings to fit a range of needs — including modest and plus-size customers, and those who prefer high-quality sports- and streetwear over ballgowns. But it also means creating targeted communications and offers that are customized to specific shoppers. Either way, staying on top of current trends and identifying the products your customers are most interested in can help you attract the attention and spending dollars of up-and-coming consumers while also staying relevant to your established clientele.
5. Leverage the Power of Storytelling
New social media platforms are popping up seemingly daily, and their reach is impressive. Instagram has transformed from a photo-sharing app to a one-stop shopping opportunity. Even TikTok is getting in on the action, creating in-app shopping features for its short-form videos. Contributing on these and other platforms isn’t just a way for you to share more about your products, but it’s also a great way for you to connect with customers through storytelling.
Through carefully crafted microfilms, pictures posted by influencers, or digital campaigns showcasing your brand’s history, merchants can help customers fall in love with a brand — and a company. So, tell your story through posts that resonate with customers, encourage them to interact with you, and engage them. Seeing how your product looks, feels, and acts in real life is often a great way to create interest and FOMO.
6. Protect Your Brand
Your luxury brand customers expect nothing but the best from you — and that includes a smooth purchasing process. But with the generally small size and high price of luxury goods, it’s no surprise that you’re a target for fraudsters. So as your business grows and you expand into and target new markets, you’ll need to protect you and your customers against an increased fraud risk.
That’s where ClearSale can help. Contact us today to learn how implementing ClearSale’s Total Guaranteed Protection Solution can help you protect your profits and your valuable customer relationships.