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Branded Louis Vuitton café in Bangkok.By Lauren Comander
A high spender who frequents luxury boutiques in Miami's Design District and loves tennis is gifted Miami Open tickets by a sales associate. A man who proposed to his girlfriend brings her into the jewelry store to pick up the box for her engagement ring and finds it engraved with the proposal date. Chanel and Dior customers use virtual reality to try on clothes and makeup from their couches. Burberry shoppers blend the physical and digital experience by scanning an in-store QR code to visualize how an outfit looks on them without going into the dressing room. Louis Vuitton fans use filters when onsite at certain locations around the world – such as the Arc de Triomphe – to superimpose the iconic LV logo onto the landmark.
Welcome to today's reimagined luxury market, one centered on highly personalized and immersive experiences. Driven by a shift of wealthy consumers seeking meaning over materialism and guided by data analytics, AI-driven insights and omnichannel strategies, the luxury landscape has, without a doubt, changed.
"The whole world should know that the experience economy is the new economy, and the most important thing is the people," said Deepak Ohri, executive in residence in entrepreneurship and innovation at the Eugenio Pino and Family Global Entrepreneurship Center at FIU Business. "Consumers are going to be spending the money, and if they aren't getting the right experience, they are getting cheated. This is what they deserve and for the organization, this is what they have to deliver."
As an experienced client services manager at a global luxury goods retailer, Michele Viso (DBA '24) has the knowledge to boil it down. "The future of affluence is being defined by two forces: personalized engagement and meaningful experiences," she said. "Luxury today is less about what you own and more about how you feel about what you own."
Millennials and Gen Z are driving the turn toward experiences over tangible items. "These generations are seeking authenticity and transformation over status symbols," Viso said. "Consumers are now measuring value on emotional return on investment."
"The future of affluence is being defined by two forces: personalized engagement and meaningful experiences. Luxury today is less about what you own and more about how you feel about what you own."
– Michele Viso
Their thirst for sharing luxury experiences on social media further bolsters their preference toward experiences, Viso said. Even more, these generations understand that while some might speculate that any given handbag is counterfeit, no one can copycat an experience.
What isn't changing these days is the motivation behind luxury consumption, said Jaclyn Tanenbaum, luxury branding expert and associate teaching professor of marketing and logistics at FIU Business. "The ultimate goal is to be able to share or signal your success," she said. "People are either trying to stand out from a particular group or fit into a particular group."
First, brands need to understand their own identity and what their core customers want while remaining true to themselves, Tanenbaum said. "Personalization, customization and exclusivity are the things that make a luxury brand a luxury brand, but brands need to figure out which of those things are most important to their different segments," she said. "These brands are looking to create connections."
As brands reimagine luxury, physical stores are becoming "experience centers" that work in harmony with the digital realm. "There needs to be fluidity between and across platforms," Viso said. At the same time, brands must provide the same level of service across every touchpoint. "If you shop online, you should be able to make returns to the store," she said. "If you shop in Paris, the history of your purchases should travel with you to South America."
One creative way to offer an immersive, curated experience is through pop-up shops, Viso said. "People stand in long lines outside to be able to experience informal brand engagement at these pop-up shops," she said. "Immersive, curated experiences are central to brand loyalty."
The same goes for personalizing products – for instance, adding initials to a belt. "Personalization equals power because it makes you more connected to the piece," Viso said. "Luxury that is tailored is one-of-a-kind, and it belongs to someone."
Brands should create clear and creative stories around their products to forge connections with their consumers. "Why does every Chianti in the world have a black rooster on its label?" Ohri asked. "You tell these stories to people and create an experience, and then we enjoy it. In the business world, luxury is silent, but there have to be stories."
Brand executives should create emotional storytelling around sustainability, a value prioritized by millennials and Gen Z. "Modern affluent consumers value brands that have a purpose, so companies can deep dive into philanthropic work and cultural impact," Viso said. "They can become emotional storytellers, and that drives deeper, long-term engagement."
Remain authentic, Viso cautioned. "I strongly suggest when companies embrace something, they do it for altruistic reasons as opposed to attaching themselves to different purposes to drive the commercial bottom line," she said.
Brands should always prioritize interaction with their consumers during the many touchpoints throughout the pre-purchase, purchase and post-purchase periods. "All along the way, they can help the consumer meet their signaling goals, which is the point of conspicuous consumption," Tanenbaum said.
Brands should take advantage of advanced customer relationship models to get to know their clients and personalize their communications, experts say. Predictive analytics can help salespeople act as personal concierges. "Brands should invest heavily in technology training and emotional intelligence so they can meet their clients where they want them to be," Viso said.
Digital showrooms and virtual try-ons illustrate how brands are leaning into AI platforms, virtual reality and augmented reality in this new age. "These tools allow the brands to showcase what they can do and also help customers signal because they can post about that high-tech experience that others aren't a part of," Tanenbaum said.
At the end of the day, experts agree, it is all about building connections and emotions. "We don't save lives in luxury," Viso said. "No one will die if they don't have a bracelet or purse or bag or shoe, but you will have those memories for the rest of your life."
