Luxury Brands Prepare for ‘Millennial Domination’

As luxury apparel brands plan their omnichannel future to take advantage of shifting demographic trends and more brand-attached consumers, there is a big blind spot that needs to be addressed.

“By [2025]Millennial & Gen-Z will dominate the luxury market with over 70% share,” said an investor presentation last week from Tapestry, the holding company that owns the Coach, Kate Spade and Stuart Weitzman brands, while outlining what which it considers the steps was to bring its sales to $8 billion for the fiscal year ending in July 2025.

Plans revolve around changing styles and increasing the buying power of Millennials and Gen Z customers, with Tapestry coining the term “expressive luxury” to describe Coach’s new direction. This departs from the brand’s positioning in the “affordable luxury” market of recent years and focuses on an omnichannel approach to keep its two main demographics engaged in the years to come.

Tapestry CEO Joanne Crevoiserat told Vogue Business on Friday (September 9) that “Soon Gen Z and Millennial shoppers will represent the majority of the luxury market, and they will also continue to influence the interests of older generations. elderly. Expressive luxury represents our vision for this future as well as our heritage, and is at the heart of the accelerated growth strategy we have laid out for Coach.

Coach is poised to get the biggest push in the portfolio, which is expected to hit $5.7 billion in sales within three years, with about three-quarters of sales currently direct to consumers. The omnichannel push is considered essential for successful growth after this period.

In an interview with Karen Webster of PYMNTS, Susan Jeffers, CEO of XY Retail, said, “Retail may change tomorrow. I may not come out of the store with a bag. I may have everything delivered to me and it’s more of an Apple Store concept where I do showrooming. At this point, I just need to have a digital and physical experience where I can experience the products the brand has to offer. »

See also: Luxury Retailers Seek to Connect Payments, Data and High-Touch Service

Luxury transformation on the 3-year plan

For a broader three-year roadmap established for the three iconic brands, Tapestry’s plan calls for building on its work in consumer centricity and brand building. This takes the form of increasing customer lifetime value by increasing acquisition, retention and reactivation strategies, according to a release, and focusing on “sustained growth in handbags and small leather goods, while accelerating gains in footwear and lifestyle products.”

Crevoiserat added that Tapestry has “radically transformed our business, with a greater focus on the consumer and their commitment to brand building, delivering remarkable results. From this solid foundation, we have a tremendous track and are poised to drive the continued growth of each of our iconic brands. The environment is constantly changing and we are ready to move at the speed of the consumer with agility and intention. »

The social influence is clearly reflected in Kim Kardashian’s choice as the new face – or foot, so to speak – of the Stuart Weitzman shoe brand. Crevoiserat told Yahoo Finance, “We’re giving the brand momentum and amplifying the heat,” with its product and omnichannel focus now fueled by adding Kardashian appeal to the marketing mix.

Luxury has largely held its own despite economic headwinds, despite consumers generally seeing the current inflationary storm lasting for some time.

According to the latest “PYMNTS Consumer Inflation Sentiment Report: Inflation Slowly Easing, But Consumer Outlook Remains Gloom,” “The average consumer expects inflation to continue at its current rate for more than 22 months into the future Consumers who live paycheck to paycheck with problems paying their bills are the most pessimistic, with 28% saying they think inflation will continue at its current pace for more than two years.

See now: Consumer Inflation Sentiment: Inflation Slowly Easing, But Consumer Outlook Remains Gloom

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