Over the course of the last two-and-a-half years, every industry category experienced rapid e-commerce growth. And while early adoption can be tied to the immediate change in consumers’ needs amid stay-at-home orders and the comfortability to shop online, recent preferences for online shopping are now linked to higher expectations: A well-received omnichannel experience embraces the consumer’s demand for convenience, adapts for personalization, offers seamless alternative payment solutions and addresses social responsibility and sustainability across the entire value chain while building community.
For the luxury segment in particular, creating community and establishing cultural credibility has served to further extend a brand narrative and inspire and attract larger followings. And by understanding these followers, brands have been able to reach more consumers, knowing that the lines have blurred from who is a “luxury consumer” and consumers who purchase luxury because of a mindset or due to aspiration.
An example of mindset driving luxury purchases is especially noticeable from younger generations who commonly have a buy-less-buy-better mentality in tandem with concern for shopping sustainably. Services like Klarna, which now sees more than 147 million consumers and 400,000 retailers globally, enable these consumers to make smarter shopping choices with the convenience and flexibility they want.
In a recent report on Unpacking Luxury in 2022 conducted by Klarna, surveying over 1,000 US shoppers as well as Klarna’s proprietary shopping and app data, Gen Z and Millennial consumers were more likely to purchase a luxury item than their elders. Across all cohorts, a preference for higher quality to last is a key motivator when purchasing luxury. Top drivers of purchases among luxury shoppers were found to be quality materials (64 percent), brand name (52 percent) and longevity (50 percent).
It’s within this context that WWD editors from Fairchild Studio interviewed leading luxury brands and industry experts to shed light on how the consumer mindset around luxury has changed and what brands should consider when engaging the new luxury shopper.