Thanks to its high-net-worth and ultra-high-net-worth customers, the luxury market is well equipped to weather almost any kind of storm. But following the events of the past two years, when the global pandemic took hold, we’ve seen it face up to its biggest challenge yet, with almost every industry dramatically impacted by widespread lockdowns and restrictions across the globe.
Nevertheless, we have already seen the luxury market begin to rebound as it adapted quickly to the new status quo – some might say, stunningly so. And in 2022, as life continues to return to normal, many industry experts are predicting that it will continue to recover rapidly.
Of course, in order to do so, it will need to continue to keep its finger on the pulse of current customer trends and demands, and understand them better than it ever has before. And some of our favourite brands may well have a few tricks up their sleeves to keep us engaged and boost our spending.
Here, we take a look at what we can expect from luxury brands in 2022 – which is set to be an exciting year all round for global recovery.
A greater focus on understanding the consumer
Over recent years, brands have begun to study our behaviours more closely in a bid to better understand the way we think, the things we like and dislike, and how and when we prefer to shop. In 2022, this will continue to be a crucial element of any long-term marketing strategy – but brands will need to up the ante and dig a little deeper if they really want to impress us.
According to the experts at 12Handz, the luxury industry will need to focus more time and attention on its digital marketing efforts than ever before if it is to keep up with the increasingly discerning high-net-worth customer, and get to grips with their personal values as well as their more general behaviours if they want to continue to resonate with them.
By focusing more attention on consumers as individuals, luxury brands can provide targeted content that really speaks to us, and that shows that they are the right choice for fulfilling our needs and desires and solving their problems.
Retention programmes that reward
Luxury brands invest a huge amount in marketing to ensure they are reaching and resonating with their target customers – but what happens once they’ve reeled us in? The fact that a high-net-worth consumer has bought from a brand or used its services previously doesn’t mean that it has cracked the required recipe to keep us coming back for more, and it’s what happens after we hand over our payment details for the first time that really matters.
Excellent customer service and a quality product is only one part of the equation, and making customers feel special is set to become increasingly important in 2022 for luxury brands if they want to retain them in the long-run. Wealthy consumers are demanding more from the brands they choose to shop with, and a rewards and recognition programme is a great way to satisfy them.
This year, luxury brands will need to focus on not just satisfying their top 20 per cent of frequent buyers, but also the 80 per cent that are less active. It is well known that in marketing, the focus is mostly placed on the top five per cent, because they generally make up over 40 per cent of total sales – but now that brands can more clearly identify individual customers’ needs, there’s no excuse not to engage everyone. With the tools now available to them to do so, this could see some high-end brands undergo some impressive growth in 2022, and we can expect to see retention and loyalty programmes become more appealing than ever.
Friends for perks
In the real world, most people go shopping with friends or a family member, which makes it easier for brands to introduce themselves to them, too. In the virtual world, we tend to do our shopping alone, sitting in front of our computers, which has changed the traditional relationship between brands and customers and also reduced the scope of potential additional sales.
This year, we’ll see brands making more of an effort to get you to share your experience with your friends, and reward you for doing so by offering both you and those you recommend discounts on future purchases, free gifts, and a plethora of additional luxury perks. In 2022, we’ll be getting more from our favourite brands than ever before, so prepare to be spoiled and treated like the royalty you deserve to be.