What’s in store for luxury brands when young jet setters are taking over the travel industry and changing the definition of “luxurious” as a social currency?
When I heard how many Chinese citizens holiday abroad, approximately 120 million people, who collectively spent more than $80 billion on luxury items and experiences in 2018, it got me thinking. This kind of shopping spree makes up two-thirds of the growth in global luxury spending. Who in their right mind would spend this much on luxury items?
The answer: millennials and Gen Z-ers who make up more than 20% of the total travelling population. They are taking over, and making huge ripples in the market trends. Now that the young and elite are jet setting more than ever, the players in the fashion market are rejigging their calendars and refitting their strategies to cater to these new “experience-first” generations.
With the rise of “bizcation” (the unimaginative portmanteau of business and vacation), young, impressionable entrepreneurs and executives are extending their business trips to holiday spots. An executive on a business trip in autumnal Shanghai would not want to be restricted to winter wear when she is looking to extend her trip to sunny Bali. The response to this is the ever-increasing Resort/Cruise and season-less collections where luxury travelers no longer have to wait for summer to make eclectic choices as to bathing suits.
When I said “experience-first”, I know you have seen it all on your Instagram feeds. Gone are the days when people are flexing their Dior bags and Gucci sweatshirts. When it’s winter, you see your favorite influencers relaxing on their yacht somewhere in the Bahamas – not wearing their warmest LV coats. As China Market Research Group’s Sean Rein observed: “The new luxury is not buying a branded bag, it’s swimming with dolphins, hiking mountains, visiting far-flung, amazing places—and then sharing the images on your phone.”
To cater to this new market, luxury brands are now associating themselves with specific experiences in particular countries. Bespoke brick-and-mortar stores are taking over generic, company-standard stores. The market today is seeing the rise of exclusive storefronts that are only available in certain cities or countries. The changes in this aspect come in two forms: the store itself, and its products.
Creating a limited experience is one thing the brands are doing to build an experience around FOMO. Nike Town in New York, for example, is combining a retail storefront with a space to experience its brand. It’s practically building a Disneyworld for the shoppers with a price tag to match. By coming into this space and participating in particular experiences, brands have figured out that buyers will feel closer to them.
Another way of achieving this is how luxury brands are incorporating their heritage, or the culture that they’ve built around a particular city or country. The experience has to be as authentic as buying a silk Sari in the streets of Delhi, or Yukata in Nagoya. The products are becoming luxury souvenirs that come with their own stories and experiences. They signify that a person has been to a particular place, and experienced the brand as they experienced the country.
With more luxury customers starting to make multiple, consecutive trips to countries that offer authentic experiences, it wouldn’t be a surprise to see Airbnb collaborate with Burberry to offer an exclusive London experience (which of course, will end at a Burberry store offering limited items). It is not difficult to imagine young jet setters eating it up like crazy – before they hop on to Dolce & Gabbana's exclusive cruise along the Amalfi Coast.