Luxury Markets for a New Generation of Buyers
By Evelyn Heinbach
Senior Director, Corporate Strategy
Are luxury goods truly timeless? At HARMAN, we are on an ongoing quest for relevance for each new generation of luxury buyers. We look for emerging trends, shifts in consumer behavior and changes in technology that create opportunities to capture the attention and taste of luxury buyers.
The Luxury buyer is changing. According to a 2021 consumer insights study by BCG and AltaGamma, most luxury consumers are now born after 1978. This generational shift is also changing product preferences and the level of digital engagement that consumers are seeking when considering and buying luxury goods.
Luxury consumers are increasingly buying online. However, this is not about creating an e-commerce site, it is leveraging technology to create a personalized customer experience. Virtual livestreaming, in-game purchases, even purchases of virtual luxury goods in the Metaverse / in-Game are examples of new customer engagement models. Authenticity of products is of high importance and already some luxury brands are experimenting with a Luxury Blockchain.
According to BCG, Chinese luxury buyers have the highest percentage of online engagements and conversion to sales using live streaming. The trend is still emerging in the U.S. and Europe, but has clearly seen a boost since 2019.
The fundamental shift to streaming music and content has left a mark on Luxury Audio as well. Products with content streaming capabilities are thriving. According to market research firm Futuresource, the market is seeing double-digit growth in Luxury Wi-Fi-connected speakers (>$2,000), increasing popularity of Luxury soundbars ($2,000+), and an uptick in luxury headphone (>$1,000) sales. HARMAN is embracing this trend and offering a line of products geared towards a new generation of Luxury consumers — and there are more exciting options to come.
Mark Levinson No.5909 Noise-Cancelling Headphones (left) and JBL 4305P Speakers with Integrated Streaming Engine.
These products do not compromise on audio quality, while increasing a consumer's choice for content access and living space configuration.
For dealers and installers, these trends create opportunities to offer a broader portfolio of products to a broader array of consumers – from low/medium annual spenders to high spenders. Additionally, more frequent customer touchpoints create opportunities for personalization and the ability to offer products that adjust with the customers’ lifestyle even before (or after) an initial home audio installation.
Futuresource expects that these trends will drive significant growth in the Luxury Audio: the global luxury retail value forecast is for $3.4 billion by 2025 from $2.0B in 2021.
Sources: Futuresource Luxury Audio Market Report, Dec 2021; BCG/AltaGamma, True Luxury Global Consumer Insights, 8th Edition June 2021 .