Predictive Audience Behavior Data for the New Luxury Consumer
Unique, Personalized, Customized: Fairmont gets a two out of three for the cost of a paper label.
Some people think luxury is the opposite of poverty. It is not. It is the opposite of vulgarity.
– Coco Chanel
The following is adapted from We Are All the Same Age Now, a book about Valuegraphics and the end of demographic stereotypes.
Perhaps you’ve heard of the term New Luxury.
According to industry trendsetters, New Luxury is a way of talking about whatever came before (Old Luxury, presumably).
It seems that fewer and fewer luxury consumers want the latest “it bag”. That’s an Old Luxury symbol of excess defined by the fact that everyone will recognize it, including those who can’t afford to buy one themselves, which was more or less the whole point. Old Luxury was about badging, and letting people know you belonged to a tribe that was at least partially defined by money.
Some sources within the New Luxury industry write about how it is embarrassing today to carry one of these recognizably expensive bags. One commentator, a blogger who writes about luxury goods with reverence, suggested these bags “scream for attention” and make the people carrying them look like they are “lacking in confidence.” Okay, looks like Old Luxury is out.
So, what’s the New Luxury equivalent? The New Luxury bag is a one-off (or at least hyper-limited-edition) purse, crafted by a charming yet salty, white-haired artisan with reading glasses on a chain over her white lab coat. She works in a tiny atelier in Paris. She’s been making these bags—each one takes three months—since she was a girl, and she’s nearly blind now. Her hands shake from stitching leather every day for sixty-five years.
There are no logos on the New Luxury bag, except a discreet tag inside that only the owner of the bag will ever see. Why? Because the rules of New Luxury dictate that the only people who should know your handbag cost as much as a new car for your nanny are the other four people who own the same one. And with any luck, they live in another part of the world so you never have to suffer the embarrassment of being at the same luncheon together.
Put another way, proponents of the idea of New Luxury talk about how luxury is no longer about badging yourself with conspicuous labels for the benefit of others. Using Valuegraphics—a database of more than 100,000 surveys, and as many as 380 metrics—our data analysis confirms that luxury consumers are looking inward and are more concerned with how an object or service makes them feel. New Luxury is about a personal experience with the product, service, or brand.
Specifically, the Valuegraphics Database points out that New Luxury is all about delivering three things:
· Personalization
· Customization
· Uniqueness
Importantly, New Luxury is also more attainable for more people. New Luxury products, services, and brands don’t necessarily come with price tags exclusively for The One Percent. As New Luxury replaces Old Luxury, democratization is coming along for the ride.
The Valuegraphics database reveals that 25 percent of the total population of Canada and the United States are attracted to the idea of New Luxury to some degree. With a total binational population of roughly 360 million, that means there are ninety million people in the total available market who are, or could be, New Luxury consumers.
Three Types of New Luxury Consumer
Ninety million is a lot of people who may be interested in New Luxury. Who might those people be? Under the personalization/customization and uniqueness umbrella, we found three New Luxury profiles that coalesced primarily around varying types of consumption: experiences, practical products, and non-practical products.
We’ve given them snappy names to make them easier to remember and talk about, and I’m only including a couple of quick distinguishing characteristics from the full Valuegraphics Profile for each, because that’s all it’s possible to cover in a short article.
The first segment is the Experiencers. There are a lot of experience junkies out there in many industries today. We keep running into this characteristic in our work, profiling target markets for clients in a broad range of sectors.
The New Luxury Experiencers represent 7 percent of the overall population of Canada and the United States, or 27 percent of those who find New Luxury attractive. We are rounding things off here to keep the math simple, but either way you look at it, this group is roughly twenty-five million strong.
The Experiencers are like Goldilocks. They spend a lot of time and effort searching for experiences that are just right. The thrill of the hunt is as much a part of the experience as the experience itself.
Experiencers want to talk about their experiential memories with others. In some ways, this takes the place of what the status handbag used to provide. It’s an ego boost and an affirmation that they are indeed fabulously special. They subconsciously want other people to wish they could be more like them.
However, the Experiencers tell us they are quite concerned about showing off too much. They want to talk about their experiences just enough to get the verbal and emotional feedback they desire but no more. They don’t want to overdo it and become known as that annoying party guest who is always trying to impress. But they do want to impress just enough to be admired. They are walking a very fine line.
Want to sell to New Luxury Experiencers? Help them feel like victorious hunters and design the customer experience so people will know all about it without your customers having to ever say a word.
The second group, representing 10 percent of the overall population of Canada and the United States, or 39 percent of those who find New Luxury attractive, is the Practicals. Across Canada and the USA, this group represents roughly thirty-six million shoppers.
The Practicals will buy luxury brands without hesitation if they are convinced the product or service in question fills a practical need. This idea of practical luxury is an oxymoron to many, but in fact, it is quite historically aligned with the very beginnings of what we call luxury today.
While they may not have known it, our entrepreneurial ancestors who found a way to make better weapons were leveraging the shared values of the Practicals. Instead of relying on more easily available materials like copper, which is all bendy when used as a spearhead, or obsidian, which can cut things quite nicely but gets dull rather fast, they figured out a recipe to add a few different metals together under certain rules of mixology and make something superior, called bronze.
This new, commingled material had immense practical value for weapons and tools. And it was, I would argue, one of the first luxury products, no doubt commanding a far greater number of goats in fair exchange than any practical implements that had come before.
Back to the present day, it is important to note that not only do the Practicals seek out luxury products and services that fit their Valuegraphics desires, but they also share an inverse and quite pronounced disinterest for material possessions of any sort. Unless, of course, those possessions have practical value.
Want to sell to the New Luxury Practicals? Avoid any suggestion that your product or service is luxurious and focus instead on why it is the best designed and best made tool for the job. The right practical object made perfectly for a well-defined purpose is worth paying top dollar for.
Practicality and perfection-of-function is the only signifier the people who fit this profile are concerned with. Even the right pencil, if it does a better job of being a pencil than a normal pencil, will be highly coveted and respected by members of this Valuegraphics audience.
What’s the third group? Surprisingly, given the apparent decline of Old Luxury, Materialists are still a significant part of the market. Indeed, it turns out the Materialists are a whopping 9 percent of the overall population or 35 percent of the total population of those who identified themselves as New Luxury prospects. So that means there are roughly thirty-one million, give or take a half-million, across Canada and the United States.
We’ve found studies proving a direct correlation between lower household income relative to one’s neighbors and the purchase of high-status cars, riskier portfolios, and higher levels of debt. Another researcher found that in regions with higher levels of income inequality, more people searched Google for luxury brands.
In other words, the existence of such a large number of Materialists is about the stockbroker who has just graduated from university and leased a Porsche 911 Turbo instead of finding a more modest means of transportation, or the entrepreneur who is operating on credit but is trying to project success. They’re still interested in using material things to give them a sense of status. Just different things. As long as what they have is a bit better than their peers, they’re satisfied.
Selling things to the New Luxury Materialists? I think the Old Luxury industry already has this down cold.
What Does This Mean for Your Business?
The information in this article is only a small snapshot of the ways in which Valuegraphics can be used to pinpoint the interests of potential clients. The rabbit hole goes much deeper, through many more subtle distinctions.
Nonetheless, I hope it’s given you a flavor of how Valuegraphics works and if your business involves selling to New Luxury customers—perhaps some ideas about what you can do to appeal to their true values instead of their age or income. With careful framing, even the right bar of soap or box of tea can wow a New Luxury audience.
For more information and advice on New Luxury and other areas Valuegraphics can illuminate, you can find We Are All the Same Age Now on Amazon.
David Allison is the author of We Are All the Same Age Now. He began working in advertising agencies in 1985 and helped motivate audiences for some of the world’s largest brands. Today, his company creates custom Valuegraphics Profiles from the ever-evolving Valuegraphics Database, and consults with organizations who are interested in the full scope of what Valuegraphics can tell them about audiences they want to motivate.