How to reach South Africa’s luxury market

by Cathleen Makhetha
Luxury transcends opulence, sophistication and mere material possessions; it’s an intricately woven tapestry of heritage, craftsmanship and commitment to a certain lifestyle. The luxury market includes myriad services that tap into consumer preferences across all subcategories, from entry-level to high-end products.

For marketers, it’s a lucrative sector of consumers: the local luxury fashion and commerce market is projected to grow at more than 1% per year. The global luxury market is projected to reach between €295bn and €305bn by 2025, with experiential luxury accounting for a significant portion of this growth, according to a report by Bain & Co.

There are subtle nuances that shape consumer perceptions and behaviours within the luxury market. To start with, this sector of the market has an insatiable appetite for authenticity and exclusivity. They want more than just products, craving experiences that evoke emotion and resonate with their values.

The paradigm shift of consumer value and brand-attributed exclusive marketing also underscores the importance of cultivating immersive brand experiences that transcend traditional transactional models and foster a sense of belonging and loyalty among consumers.

They’re also not averse to pre-owned items. In fact, Luxity, South Africa’s biggest pre-owned luxury seller, predicts that by 2027, one in 10 luxury items in Africa will be pre-owned.

The digital revolution, ushering in as it has a new era of connectivity and accessibility, presents both challenges and opportunities for luxury brands. With the proliferation of social media and ecommerce platforms, luxury marketers must strike a balance between exclusivity and inclusivity, leveraging digital channels to amplify brand visibility while preserving the aura of prestige and allure.

McKinsey predicts that online sales of personal luxury goods will account for 30% of total luxury sales by 2025, with spending power shifting to a younger demographic.

To resonate with today’s affluent consumers, luxury marketers must adopt a multifaceted approach that combines digital innovation with timeless elegance. From immersive virtual experiences to personalised concierge services, the possibilities are limitless. By harnessing the power of data analytics and AI-driven insights, luxury brands can unlock hidden opportunities and tailor their offerings to meet the evolving needs and preferences of a discerning clientele.

Corporate responsibility, sustainability and ethical stewardship have emerged as key pillars of luxury branding, with consumers increasingly demanding transparency and accountability from the brands they support. According to a study by Deloitte, 55% of luxury consumers are willing to pay more for environmentally friendly and socially responsible products. By embracing sustainable practices and championing social causes, luxury brands can not only mitigate their environmental footprint but also enhance their brand equity and appeal to a new generation of conscientious consumers.

As strategists, it’s important that we understand the nuances of this market in the context of other demographic groups. By understanding the intrinsic desires and motivations of audiences and harnessing the transformative power of technology and sustainability, we can unlock the true essence and value of the luxury market.

Cathleen Makhetha is the head of strategy at CBR Marketing Solutions.

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