Many shoppers are cutting back their spending under the weight of more than a year of inflation, but there’s still good news for the luxury industry — 62% of its shoppers plan to spend the same or more on luxury in the next three months compared to the last three months, according to Saks Fifth Avenue’s Saks Luxury Pulse survey. This behavior, combined with growing interest in travel and going out, is creating new opportunities despite the economic uncertainty affecting the industry.
“We believe, and we’ve seen this in economic uncertainties over time, that luxury tends to be very durable,” said Emily Essner, Chief Marketing Officer at Saks in an interview with Retail TouchPoints. “The reality for luxury consumers is that it’s a part of a lifestyle and something that is really important to them. Our products are things that are incredibly well made. They can last a long time. I think our industry has done a nice job of conceiving of our products as an investment, so that makes it something that is a little bit more palatable to spend on in more challenging times.”
Taking Advantage of Luxury Consumers’ Revived Travel Plans
The return of habits to their pre-pandemic norms has been beneficial for many retailers, but it’s also carried new challenges, particularly when combined with the many options high-income consumers have for spending their money. For example, Saks found that 72% of luxury shoppers have already booked or are planning to book a trip — but the good news is that this can present an opportunity for retailers that are ready to assist them as they prepare for their vacations.
“We definitely are a business that benefits when consumers are out and about when they’re traveling, when they’re going out to eat or going back to the office,” said Essner. “The travel piece has influenced us in terms of the opportunity to sell to customers who are looking to buy specific things for that beach vacation or that trip to the mountain or that amazing city break. It also, of course, has an impact on how we think about marketing to them.”
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The top luxury items being purchased in preparation for trips are clothing (60%) and shoes (36%). Saks is taking this opportunity to continue expanding its assortment across multiple categories and offering its customers inspiration through content. Saks’ editorial team will use this information to “give our customers inspiration about what to wear to various travel destinations that is going to be compelling and relevant to them,” according to Essner.
“We have an incredible world-class fashion office that is responsible for understanding what is going on in the world of fashion, whether that’s the runways, the streets or everything in between,” she said. “They’re really providing direction. Our job is to take this input we’re getting from our consumers who are interested in travel, who are doing a lot of it, and then take the fashion direction that we’re getting from our fashion office. ‘These are the most important trends.’ ‘We’re really excited about these brands.’ We put those two together. In general, our customer is someone who wants to be engaging with things that are new, that are exciting, and so that marriage is how we do it.”
Providing Style Guidance for the Return to the Office
Luxury shoppers also plan to purchase items for nights out, special events and going to the office, which also will create new opportunities for selling clothing and footwear. Essner noted that it’s been three years since many of these people have regularly visited the office or attended concerts, which has been driving and will continue to drive demand as shoppers refresh their outdated (and in some cases now ill-fitting) wardrobes with items better suited to their current needs.
This trend may prove particularly important in menswear, where fashion has shifted heavily over the past several years. Streetwear is giving way to more classic and tailored looks with a quieter appearance, and luxury retailers need to properly guide their customers to help them understand this new look.
“I think from a marketing perspective that it’s all around communicating what this new fashion means and then really trying to make it as easy and as understandable as we possibly can,” said Essner. “We’re going to have some consumers for whom it’s been many years since they haven’t worn a sneaker, and so it’s going to be about introducing what they’re going to wear that new lace-up with, or what the new silhouettes are and how they go together. It’s about making it both aspirational and really easy, so consumers really feel like they can embrace these trends.”
Unsurprisingly, social media will be key in getting these messages across. Instagram is the most popular platform, selected by 55% of luxury shoppers, and the most common uses of social media in general are to read reviews (45%) and to get inspiration for outfits (33%). Making the most of this opportunity requires integrating social media into overall marketing strategies to ensure every part is working in synch.
“I think because of its complexity and because of how quickly it moves, sometimes there can be the desire to hide social on its own little island,” said Essner. “In general, that doesn’t serve your messaging very well and I don’t think it really serves your end consumer. The consumer is looking at all of the touch points of your brand across the board, and consistency is going to make that overall message a lot more powerful.”
