Do you know "Generation Y" (or the "Millennials")? Born between 1977 and 1994, they represent, for example, 25% of the American population and spent over 150 billion in 2009. This is the generation of social networking and Netizens, environment protection and NGOs, personalization and information seeking.
A fascinating study on their relationships with luxury brands has just been published in the U.S. (conducted by Scott Galloway of the NYU: "Generation Y Prestige Brand Ranking"). 450 consumers with yearly incomes of around $ 100,000 were questioned: the results are a subject for reflection. Here are a few of them:
- The brands were classified into five groups: "Epic" / "Best Friend Forever" / "Whatever" / "Tired" / "Off The Grid". Of the 105 brands analysed, only 12 are considered "Epic" (and 26 "BFF") by women, and 9 by men (and 18 are "BFF") – i.e., less than 10%!
- The brand considered the most powerful by men is Apple, and Chanel for women.
- The car brands (BMW / Audi / Mercedes) feature among the "Epic" brands for men AND women.
- Some brands provoke very diverse reactions: they are both among the top 20 AND the most unpopular. These include Vuitton and Burberry - because these brands are perceived as too "flashy". Among the brands the most disliked are also De Beers, Land Rover and Cadillac, perceived as not being environment-friendly...
- Watch and jewellery brands are not on their radar (with the exception of Cartier, Tiffany and Rolex).
- Brands that develop real "social media" strategies find favour with them.
- Online purchasing is growing strongly - more on private sales sites (such as yoox.com or gilt.com) and retailers (such as netaporter.com) than on the sites of the brands themselves.
Luxury brands should draw several strategic lessons from this:
- Generation Y is their new customer base in mature markets (AND in China as I have repeated quite often on BrandWatch).
- They should acquire effective Internet strategies - and when I say "strategies" I do not mean just the addition of an online sales site, a Facebook page, a Twitter account, etc.
- They should overhaul their customer relationships completely, focusing on Customer Experience: to do this, a proper segmentation of their customer bases should be carried out.
- They should be credible in their environmental and responsibility strategies.