Louis Vuitton, Gucci, and Hermès are battling for young consumers and to win over the hearts, minds, and dollars by trying to engage them through social media, storytelling and streetwear. Millennials and Gen Z are expected to account for 45% of all luxury spending by 2025, so it makes sense to earn their loyalty when they are young that could help to increase the size of the market from Euro 295 billion to Euro 305 billion by 2020.

Right now, it looks like Gucci is slightly ahead of its competitors, as it already generates more than half of its sales from this demographic, while about a third of Louis Vuitton’s sales come from millennials. While Louis Vuitton does not share the demographic breakdown of its customers, a study from UBS estimated that a third of Louis Vuitton’s sales came from millennials in 2017, compared to more than half of Gucci’s sales.

Gucci’s success is thanks, in part, to Alessandro Michele, who became the brand’s creative director in 2015, bringing a fresh, playful aesthetic to the brand. It is also the result of CEO Marco Bizzari’s willingness to embrace technology in ways that luxury brands have not done in the past and it was among the first of the luxury brands to partner with Instagram influencers.

Gucci has pushed the rest of the industry to rethink its strategies. For Louis Vuitton, the strategy for winning over young consumers includes bringing on Virgil Abloh, who is a household name among millennials and Gen Z. Part of the reason for Abloh’s appeal is that he is one of the most inclusive and multidisciplinary designers of our time, which is particularly exciting to these younger generations that do not like labels. He refuses to be limited by a particular medium or by whether a brand is considered high-end or low-end. He has recently created plastic Evian bottles and limited-edition rosé champagne bottles for Moët & Chandon, as well as pieces for Ikea and for Jimmy Choo.

Hermès has found creative ways to speak to young consumers: It now has a whimsical podcast where different people involved with the brand tell stories, and it even showed up at South by Southwest with a laundromat where visitors could update their vintage Hermès scarves for free. On the other hand, Chanel, which does not even have an e-commerce site, has been very slow to adapt to modern consumers, but it recently announced it will create a Netflix documentary to give viewers a closer look inside the company offering a first step to connect with the younger generation.

The trends it is playing into have been around for several years, and some have already been subject to some backlash. To win the battle for young consumers, it will not be enough for luxury brands to follow the trends: They will have to create new ones.

Learn more: Here

THE LUXURY INDUSTRY’S FIGHT FOR THE NEXT GENERATION