What’s driving the new luxury consumer?
SHORT READ
There’s lots written about what motivates the new, younger, luxury consumer.
Among the hot-takes I’ve read is that buying a pre-owned luxury watch aligns with the Millennial / Gen Z’s ethical principles of reusing and reducing waste; purchasing a second hand Cartier Tank being reframed as a decision driven by the need to be eco-friendly.
The reality is a lot more complex.
When creating a brand in any sector, our starting point is to take a step back and look at the wider influences that are affecting the audience’s behaviours, the direction the industry is moving and any cultural drivers that are influencing the sector. In the case of the luxury watch resale market, understanding the audience means looking at a combination of cultural and social influences.
Here’s five ways that a younger generation of watch collector has been influenced:
The Premier League and the influence of culture
Back when Ronaldo joined Manchester United in the noughties, young footballers still looked like awkward teens. Now they’re more like mobile sponsorship units; dripping in monogrammed swag, with wrists wrapped in expensive, often custom, timepieces. The injection of cash into football has exponentially raised the visibility of luxury goods with the younger demographic of global fans. Watchmakers have recognised this and fueled the fire; Hublot sponsors the Premier League; IWC, Liverpool; and Richard Mille, Paris St Germain. For soccer stars: also read NBA players, rappers etc.
The rise of #watchesofinsta — new channels, new audience
Like many subjects, social media has ignited interest in the luxury watch market. You can find out not just the watch Jay Z is wearing, but the story behind it, even where to buy one. Arcane knowledge on obscure models is now readily available; even the casual fan now knows a Pepsi from a Batman. Social channels fire up trends seemingly from nowhere; brands such as Piaget become hot and in demand almost overnight.
And the only place to buy those obscure timepieces — online resellers, all with their own IG accounts.
Redefining status — social-economic shifts
In an environment where there is no dominant fashion narrative and signifying status is problematic, luxury watches play a more nuanced role than ever. If succession taught us anything, it’s that billionaires look like they’re wearing Uniqlo, they just pay 30x more than we do. Today, you’re as likely to find a vintage Patek on the wrist of someone in a Polo T-Shirt than a Savile Row suit. And if you’re not up for smothering yourself in obvious designer logos, a watch is a sure fire way of signalling not only affluence, but taste and inside knowledge.
Scarcity drives demand
The second hand market is powered by simple fact; there are far more pre-owned watches than new. Manufacturers aren’t about to step up production; scarcity ensures long-term value and prestige. Buying a specific luxury watch from a store is difficult, there are waiting lists and limited releases. With an audience who are now happy buying prestige items online, there is suddenly far more choice, and any stigma about ‘pre-owned’ has disappeared.
Invest and return — pure economics
The narrative of credible financial return has become gradually more appealing, and visible, even for younger consumers. A Rolex isn’t about to rapidly devalue, even in an unsteady economy — and over time it’ll almost certainly hold its value or increase. Even for younger millennials, there’s a sound logic to this. Those new Nikes might be worth $$ in years to come, but only if you keep them box fresh. Wear, enjoy and service your Speedmaster and it’ll retain value. Win-win.
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