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    The Total Revenue Is 100 Billion, The Millennial Generation Is The Main Consumer Force, And The Luxury Goods Industry Is Coming To Spring.

    2019/6/28 13:11:00 1

    Luxury Industry

    With the rise of environmental awareness and the reshaping consumption change of the new generation of consumer groups, the luxury industry, which has long been the brand name of history, has been greatly impacted. In 2016, the global luxury brand's revenue growth rate was only 1%. In the face of the new generation of consumers, luxury brands have to make corresponding changes to save the declining trend.

    An old dog needs to live. A new trick must be learned.

    According to the 2019 luxury report released by DDT, the age group of luxury customers is decreasing. The postwar baby boom and the X era (the group born from 1966 to 1980) is no longer the main purchasing force. The millennial generation (post-80s and 90s) has become the main group of luxury goods.

    The young group has new cultural values and consumption habits. Their rise has made the luxury brand with rich historical background face the new generation and have to re-examine their brand value, make adjustments and changes.

    In DDT's research, consumers are no longer taking the brand history as the first consideration. The factors that affect their purchase are: quality, customer service, design, production process and product uniqueness.

    "Henry" ethnic group is reshaping luxury goods

    In the consumer group of luxury brands, the emergence of Henry ethnic group is the main factor that must change the brand. Henry (English Name: HENRYs) usually refers to groups like China's petty bourgeoisie, the whole name is High-Earners-Not-Rich-Yet, meaning "not rich high income group". They are 25~45 years old, have online shopping habits, and are not particularly keen on saving money. They have become the new major customers of luxury goods nowadays.

    The Henry family's dependence on online shopping and the Internet has changed the strategy of luxury product development and marketing. The traditional business strategy is no longer edible. The luxury brand facing sales decline has begun to adjust its original mode, and it should be iterated in response to the advent of the Internet age and changes in consumer groups.

    First, the rise of moralism, reshaping the industry supply chain.

    According to DDT's Research Report on Henry's ethnic group, when buying a family, the Henry family tends to buy Ethics and moral values products. Organic, environmental protection, humanity and other key words become one of the important considerations when they consume.

    In terms of raw materials, past luxury brands seek high quality, use animal fur as raw materials, and provide high quality management, resulting in killing a large number of animals in the process, and not directly meet the standard product damage and discard, resulting in the loss of natural resources. Italy's luxury brand Prada has announced the establishment of a sustainable eco and environmental protection committee, which establishes the relevant production process standards as head players and restricts and supervises the numerous brands of Italy, a high-grade leather producing country. Its The group Kering Group, which owns Gucci, Stella McCartney and Saint Laurent, has announced that it will increase the Commission of raw materials suppliers and promote the sustainability of the supply chain. As a result of the disputes between the government and the business community in the previous drilling industry, many African drillers have been mistreated and killed. The US jewelry brand Tiffany has announced a zero tolerance policy, and has adopted a sanction to refrain from exporting diamonds to inhumane countries, as the first luxury brand to announce relevant policies. The British luxury brand Burberry announced in September 2018 that it would stop damaging defective products.

    Two: play social media, become the main marketing channel.

    Henry's ethnic group has a high degree of dependence on the Internet. Luxury brands used to rely mainly on magazines for marketing. However, nowadays, the proportion of subscribers subscribing to magazines is relatively small. Social media has become an important medium for connecting with customers. Luxury brands not only begin to develop social media marketing strategies that are consistent with brand tonality, but also have a close relationship with KOL, such as bloggers and celebrities, and expand their brand influence through imitation effect of fans.

    In 2017, the French luxury brand Chanel became the world's most influential internet luxury brand. The strategy used by Chanel is to release some publicity content on the Instagram first, which triggering user concerns, and then releasing the full version on YouTube and Facebook. The content of the publicity is mainly on films, mostly for the content of visual effects. It will also talk about the behind the scenes shooting, releasing it in the name of "Inside Chanel" series, in order to better stimulate the user's visual experience and stir up the user's concern.

    According to theloup.co's Internet data, Chanel's social media video material total hits 3 billion, ranking first.

    Gucci, a luxury brand in the US, collaborate with online artists on Instagram to launch #GucciGram and #24HourAce, allowing artists to have the right to operate Gucci accounts in 1 hours.

    The French luxury brand Tod 's has been working closely with the well-known Chinese KOL bag. Mr. Bao has helped the brand sell a handbag worth 324 million yuan in WeChat's small program in 6 minutes.

    Three: achieving more parity of customization.

    Consumers' brand loyalty is not as strong as before. Luxury brands began to develop more approachable custom-made businesses to attract consumers' attention. In the past, custom-made services of luxury goods were priced at a high price, and the items that could be customized were relatively limited. Nowadays, such services as lettering on lipstick shells and the establishment of exclusive packages and other services with different leather parts have been gradually launched.

    For example, Shiseido, a Japanese cosmetic group, acquired the US MATCHCo in 2017. Consumers can scan their facial data by App, and then reconcile the best color of the consumer according to the data.

    Cold winter footsteps far away, brand usher in spring

    In 2017, the brand revenue of the top 100 luxury brands in the world totaled 247 billion US dollars, up 10.8% from 217 billion US dollars in 2016, and the compound growth rate from 2015 to 2017 was 5.3%, while 2016 only grew 1% compared with 2015. In the top 100 enterprises, 76% of the enterprises' revenue increased, and nearly 50% of the enterprises achieved a growth rate of over 10%.

    The total revenue is 100 billion, the millennial generation is the main consumer force, and the luxury goods industry is coming to spring.

       It is worth mentioning that in 2016, the French luxury brand Christian Dior Couture, which ranked 26 in 2016, was bought by LVMH group in 2017, and the top 100 brands list was dropped in 2017.

    In the luxury category, there are two main reasons for the growth of small products such as cosmetics and clothing, which are the expansion of online channels and the younger consumption groups. As brands gradually expand the sales channels of these two categories by electronic commerce, the sales growth of online sales in China, Germany, Switzerland and Ireland is particularly evident. In addition, because of the decline in the age of luxury goods, the price of cosmetics and clothing is more relative to other products, so the growth is larger.

    Canadian apparel brand Canada goose sales grew by 16.5% in 2017. French clothing brands such as Sandro, Maje and Claudie Pierlot have been expanding in mainland China and Taiwan after being bought by Chinese consortia, and have achieved excellent sales results.

    epilogue

    In 2017, for luxury brands, it passed the winter last year, ushered in the spring of sales growth. It can be attributed to the strategic adjustment of brands in product R & D, marketing and sales channels, so as to fully cater to the new consumer groups.

    After summing up the strategies of various brands, we can find that consumers are still the most important factor in the consumer retail industry. Many luxury brands with rich brand histories have chosen to lay down their reputation and history and understand the new needs of consumer groups in the face of changes in consumers.

    In contrast, China now has many brands that rely on topics and enthusiasm, but it is difficult to maintain long-term operation. If the enterprise lacks the polish of the core content of the product and truly understands the needs of consumers, it will eventually come to the end.

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