Establishing a company in the luxury market takes a lot of work. In fact, it takes years for a business in this sector to be truly recognized and respected by high-end consumers. To understand why, just remember that the biggest luxury brands have all been on the market for a good few decades at least.
So it’s easy to see that anyone who ventures into this market has a long road ahead on the way to success. With that in mind, in this post we’ve put together an overview of where luxury retail in Brazil stands today and how to stand out! Check it out!
How do luxury consumers behave in Brazil?
The country’s political crisis directly hit sales of luxury goods, even among customers who weren’t affected by the economic situation. As a result, many consumers still have strong purchasing power but choose to consume in a less ostentatious, more moderate way.
Most luxury shoppers today want products that, besides being highly desirable and beautiful, come from brands with a solid concept behind them that convey a lifestyle. This way, brand and customer share values and ideas, building a relationship of identity and loyalty.
Over time, things that were once considered luxuries, such as private drivers, have become part of everyday life for the current generation of consumers. After all, they can order a driver through an app who will be waiting at the store entrance when they finish shopping.
As a result, consumers’ expectations of luxury are very high and keep rising, making them extremely demanding and selective when choosing brands. In addition, luxury consumers prefer close relationships with sales associates and personalized service, according to luxury retail expert Manu Berger.
What are the outlook and challenges for the sector?
Despite the unstable economic moment Brazil is going through, the luxury market remains very strong and keeps growing. Some factors driving luxury purchases within the country, rather than abroad, are the strong dollar, purchasing rules, and installment payment options.
On the other hand, the convenience airlines offer for international travel, especially to Miami and New York, directly affects luxury retail in Brazil, since it’s no longer consumers’ only way to access international brands.
The “competition” with airlines is so strong that, according to research by The Boston Consulting Group (BCG), Brazil leads, along with Russia and China, the ranking of luxury purchases made outside the shopper’s home country. According to the same study, millennials will be the main drivers of the luxury sector’s growth, of around 37%, over the next six years and will account for half of this market.
This shows us that luxury retail in Brazil needs to adapt to the new consumer, not just to traditional shoppers. The millennial generation seeks out distinctive experiences that make an impact and make the shopping moment more enjoyable and meaningful.
How should luxury retail adapt to these changes?
As we’ve said, today’s luxury consumer is looking for experiences, so if several companies offer the same products, the preference will go to whoever delivers the best shopping experience, right? To get there, brands need to build one-on-one relationships, with an emphasis on young people and tourists, implementing effective approaches that deliver innovative experiences. Below are the main transformations the sector should undergo:
Changes at the point of sale
The POS must become a place for building relationships. More and more, stores need to become places where customers feel at home, offering innovative experiences and genuine dialogue with them.
Customer service has always been the differentiator in luxury retail, but now, more than ever, it needs to be reinvented to meet the desires of new consumers. In Apple stores, for example, staff act as mediators between customers and products; the strategy is to make it seem they’re there more to inform than to sell, creating a much more meaningful shopping experience.
Another important way to innovate in luxury retail in Brazil and improve the customer experience is to use in-store technology at the POS that will attract customers and help keep them in the store longer. Digital storefronts, for example, are a trend that can be used in luxury retail to heighten the sense of opulence in the space.
Make your brand accessible and immersive
The luxury market is no longer exclusive to people with high purchasing power, since today it’s very common for some customers to save money for months specifically to buy a product from a famous brand. Companies that offer longer installment plans get ahead of the competition. In addition, the store’s marketing should focus on showing how accessible it can be to everyone.
Modern luxury must also convey a lifestyle, creating an all-encompassing experience of which the products are a part. A strong brand narrative combined with technology gives consumers accessible, “no purchase necessary” entry points to the brand experience at every touchpoint and price point.
Aligned channels
Fear of counterfeits is one reason some luxury brands have little presence in e-commerce. However, it’s no longer possible to separate the physical world from the digital one, since people move between them seamlessly, so innovations in digital platforms should be seen as allies.
On top of that, modern consumers are highly selective and use technology to make purchasing decisions across countless channels; online stores grow every day and are a great segment for luxury brands.
In this post, we’ve seen that it’s important to change the sales strategies of luxury retail in Brazil as consumer profiles and the very definition of luxury change. In addition, with social media, products and services have become accessible to the masses, raising new challenges for companies that want to stand out.
Luxury retail in Brazil has great growth potential, but to realize it, it needs to make some changes to adapt to the behavior of modern luxury consumers, such as the millennial generation.
Enjoyed this post? Then find out how to understand your consumers’ lifestyle and build a consumer profile, so you can communicate the right way with your customers and offer relevant products!
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