An exploration of the luxury market through trends, insights and expert opinions
Amid Donald Trump’s ongoing bombast, the USA’s luxury market is being driven by affluent immigrant consumers.
Forward-facing immigrant consumers want to feel valued by luxury brands – a sentiment they rank as highly important.
Two luxury brand managers meet in a bar in New York. One says to the other: ‘Where are you going to open your next retail location?’ The other replies: ‘Wherever Asian-American tourists are travelling.’
When it comes to the new luxury market in the US, there is more truth to this fable than is commonly known. Forward-facing immigrant (FFI) consumers, as we at MVI Marketing describe them, are driving the growth of luxury brands.
We recently completed a consumer research study asking affluent, Millennial Asian-American and Latinx-American consumers about their shopping preferences and behaviours. The results are noteworthy for brand marketers.
Firstly, despite the very loud political conversation about immigrants in the US, second- and third-generation immigrant families are the new class of luxury consumer. After attending the world’s finest universities, they’ve been cherry-picked for top jobs, are working in the highest-cost-of-living cities and own the most expensive property.
Perhaps most significantly for luxury brands, these consumers travel well. And travel, for personal holidays, is where most are using their discretionary income for luxury purchases and experiences.
For example, our research study asked how important it is that their choice of hotel offers spa and wellness services. Some 79% responded that this was either very or somewhat important.
Luxury marketers hoping to reach FFI consumers must embrace their uniqueness and recognise their achievements.
FFI consumers rely heavily on online reviews and research; in turn, their path to purchase of various luxury services is somewhat different from that of their peers. For example, they are most likely to purchase luxury travel, spa experiences and hotels via mobile devices or web pages, reflecting the technology-driven nature of daily lives.
When it comes to hard luxury, the major players consistently denote status, quality, prestige and affluence among FFI consumers. Asian-American women associate such attributes with brands like Tiffany & Co, Swarovski, Gucci and Cartier. Meanwhile, Latinx-American women cite Michael Kors, Louis Vuitton and Chanel among their most favoured brands.
FFI consumers also expect a high level of touch and in-person experience when purchasing pieces from luxury labels, in particular fashion and jewellery. Indeed, when asked how likely they were to purchase the following luxury items using their mobile device without going into a store, 46% said ‘not likely’ for luxury jewellery, while 40% said ‘not likely’ for fashion.
Both Asian-Americans and Latinx-Americans also value having a personal stylist, private shopping rooms and post-sales follow-up from luxury brands. For Latinx FFIs in particular, native language-speaking sales staff are another key value driver.
This group are sophisticated, discerning and rapidly growing into a significant segment of the American luxury consumer population. And perhaps most importantly, FFI consumers want to feel valued – they rank this sentiment as the most important shopping experience factor.
In my opinion, those luxury marketers hoping to reach the FFI consumer segment must embrace their uniqueness, recognise their achievements and those of their families – even if the President himself refuses to do so.
Marty Hurwitz is the founder of MVI Marketing.
Luxury campaigns took a dramatic twist in 2018, with cinematic experiences dominating brand communications. In the spring, Tiffany & Co.’s, musical-inspired short featuring actress Elle Fanning and rapper A$AP Ferg positioned the brand towards Millennial audiences, while in the autumn, Lexus brought together man and machine with Driven by Intuition, the first luxury campaign written by AI and directed by Oscar-winning director Kevin Macdonald.
The dynamic among society’s wealthiest started to shift in 2018. Public backlash against overt displays of prosperity and privileged lifestyles drove a major re-assessment of what is considered appropriate today when it comes to luxury spending and investments, inspiring our 2018 luxury macrotrend Uneasy Affluence.