I had the opportunity to talk with Norman Howe, President of luxury experiential travel retailer Butterfield & Robinson recently about trends he’s seeing in the luxury travel field. While Howe is focused specifically on the travel market, these trends present challenges and opportunities across all industries serving the ultra- and high-net worth consumer.

An Aging Demographic

For almost all luxury brands, the Boomer generation represents the biggest slice of the pie, and may well do so for many years to come. That said, the average age of B&R clients is increasing, according to Howe, and they need to focus on the acquisition of a younger demographic to maintain and grow the business in the future.  B&R, like many luxury brands, is now focusing on finding qualified and interested post-Boomer prospects, including Millennials. 

Changing Sensibilities

One of the challenges of gaining market share with post-Boomers is the realization that it is not only their age that is different. Millennials are different from Boomers in many ways, including their lifestyles, interests, and communication styles. “We’ve found that while Boomers are quite comfortable traveling in groups with people they don’t know,” explains Howe, “Millennials are more private and family-focused. They want to plan trips with immediate family or with friends they already know well.” For B&R, this means a shift of resources towards private travel experiences as opposed to published, itinerary based options. They are also introducing new offerings such as a bistro series, focused on the younger audience. They have discovered that 35 year olds don’t necessarily want to hang out with the 55+ crowd.  “One thing we look at,” says Howe, “is where they are in their lives. One area we have been developing to serve the younger demographic is private family travel.”

Evolution of Emerging Markets

While North America is clearly the largest share of the luxury market, emerging markets are playing an ever important role. Howe finds that Brazil is exploding onto the scene, representing 10% of his current business. Russia and China are also emerging, but as consumers, says Howe, they are not yet as nuanced as more mature luxury markets.

Growth of Digital Marketing

In addition to changing demographics, the luxury marketing world is changing as a result of advances in technology and the ways people communicate. The marketing budget at B&R has shifted enormously over the past 5+ years. While print consumed up to 60% of the marketing budget in years past, it now represents just 25% to 30% of the budget. The balance has shifted to digital and what Howe calls “Marketing Intelligence,” which includes data, analytics and marketing automation components.

The Expectation of Personalization

“There is a funny dichotomy,” explains Howe, “regarding the rise of technology.” Consumers expect that brands will use technology, but more and more their expectation is also for a very personal touch. B&R hosts events in order to create and maintain that personal connection with travelers, their friends, family, and potential clients.  Personal one-on-one marketing is growing in importance. “People are increasingly trained to expect that their service providers will know them and they expect them to know lots of intimate details: what soft drink they like,  whether they prefer bistro or five-star dining, and what leisure activities they favor,” notes Howe.

Challenges and Opportunities

These trends are often perceived as challenges, but for forward thinking CMOs, they represent opportunities as well. 

  • Those who are developing offerings geared at a younger generation of luxury consumer will be prepared for the sundown of the boomer generation.  But in order to hit the mark, it’s essential to understand the key up-and-coming demographics. Who are they? What do they enjoy? What motivates them? Where are they in their lives? Data and analytics hold the answers.
  • The growth of marketing intelligence and automation tools is no flash in the pan. Those who are embracing these will be best prepared to offer their clients and leads the right message at the right time. As expectations rise regarding personalized, one-on-one marketing, having the tools and insight available is essential. 
  • Successful luxury brands will know their current best customers, understand their changing demographics and behaviors, know where to find and how to engage emerging prospects, and use data to their advantage to influence consumers toward a positive decision.

For information on keeping abreast of luxury marketing trends, download our complementary eBook The Luxury Marketer’s Guide to Using Data to Engage and Win Customers.

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