Meet the new luxury shopper (according to McKinsey).
McKinsey’s key finding, summed up in a single idea: It’s a consumer centric market now, and with so much choice, shoppers are far less loyal than they used to be. (411 words)
McKinsey recently released some telling findings that lend more credibility to our many anecdotal insights here at Lean Luxe about why so many existing brands, retailers, and longstanding industries seem to be in perpetual slumps.
McKinsey’s key finding, summed up in a single idea: It’s a consumer centric market now, and with so much choice, shoppers are far less loyal than they used to be.
Consider this big takeaway from the report (bolded by us for emphasis):
“Evidence has begun emerging, however, that consumer bonds with many brands is simultaneously slipping. . . . We see such data as an important signal that new technologies and greater choice are changing how consumers are thinking and acting across their consumer journeys. As one executive puts it, “In the digital world, your consumers can’t help but shop around.” The past few years have seen exponential growth in tools that have made researching and purchasing products online vastly easier. An explosion of mobile shopping apps that showcase options, simplify pricing, compare product specifications, and facilitate peer reviews is making it possible to size up brands effortlessly. In addition, social media lets consumers know exactly what their friends are buying and what they like and don’t like about those purchases. The sheer weight of all this encourages even your best consumers to shop around and changes paradigms that marketers have counted on for years.“
The opportunity for emerging brands: This report is dripping with what we at Lean Luxe like to call ‘legacy anxiety’, the realization among existing brands that the game is changing right in front of them, and they’re simply not well-equipped to play by the new rules.
Still, on the matter of dwindling consumer loyalty, the question one should ask is whether shoppers are naturally disloyal in an open market with an increasing array of choices — and if that’s something that just won’t change — or if disloyalty can be traced back to legacies’ stale product offerings, positioning, or behavior?
More to the point, do modern luxury brands, by virtue of their niche positioning and more lifestyle-focused optimization, hold more of a natural allure with shoppers in a consumer-centric market? Remember: If shopper aren’t buying as much at existing brands, they must be shopping somewhere…