Luxury companies are complacently selling to their established customers while ignoring the next generation of millennials.
This attitude could jeopardize future business because millennials are "skeptical" about luxury brands like Louis Vuitton and Burberry, according to a report by Pam Danziger at Unity Marketing.
So far, luxury brands have taken the easy way out and marketed to their reliable customers.
"Luxury marketers face a challenge repositioning their brands for this next generation of highly-educated, soon to be affluent young people," Danziger says. "Luxury brands will have to adapt to meet this next generation of luxury consumers in the marketplace."
Reaching the younger generation is challenging because research shows that young people think that luxury brands are overpriced and aren't worth the expense.
While millennials aren't making up much of the market now, Danziger predicts that by 2020 many will be affluent and buying more expensive goods.
Marketing to younger people should be luxury brands' top priority, according to Danziger:
"Understanding the aspirations of Millennials for a luxury lifestyle is critical for luxury brands, including what money, status, and success means to them. They will need to both innovate with new products, services, marketing strategies and branding concepts, as well as let go of old ideas that will prove ineffective, even counterproductive, for marketing to this new generation."
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