Opinion: Empathy over arrogance – luxury’s shift to Gen Z

On top of the agenda of practically every luxury brand today is the challenge of how to successfully manage the transition to the next generation of clients, Generation Z. This client group already drives more than 20 percent of all luxury purchases today, and they will be the top luxury demographic by the end of this decade. Yet, many legacy brands are struggling to remain relevant and are under-indexing with them. One of the decisive factors is a client experience that may have been acceptable in the past but is a turn-off for Gen Z. In the world of luxury, the tides are turning. The era when brands could capitalize on the laurels of their heritage, expecting loyalty through the sheer weight of their names, is over. The dramatic challenges that several luxury brands are facing in trying to reset are a first indicator. The era when brands could capitalize on the laurels of their heritage, expecting loyalty through the sheer weight of their names, is over. Today’s luxury consumers demand more than just fancy products and celebrity endorsements. They are unimpressed by designers unless the designers can also bring the brand story to life in their creations. Importantly, they seek an experience that resonates with their personal values and expectations. The transition from an inside-out view — where brands dictate the terms of engagement — to an outside-in view — where the customer’s needs and perspectives are at the center — has become a crucial success factor. However, with Gen Z, these experiences simply don't work. Breakup research indicates that the majority of loyal clients who decide to part ways with a luxury brand did so because of a bad customer experience. This illustrates the imminent dangers of an inside-out approach that prioritizes a lack of empathy over customer satisfaction. Steps to improve the client experience Luxury brands need to shift their focus and place the client at the center. Here are four strategies to avoid arrogance in the client process and instead provide extreme value: First, cultivate empathy at every touchpoint. Brands must train their teams to approach every client interaction with empathy, recognizing that each touchpoint shapes the customer’s perception of the brand. By actively listening and responding to client feedback, brands can create a more inclusive and personalized experience. The challenge lies in the implementation. While this sounds great on paper, establishing an emotional connection with clients can be incredibly difficult. I’ve observed countless times how even experienced sales staff struggle to achieve this. Second, adopt a client-first mindset. This involves reevaluating every aspect of the business, from product development to after-sales service, through the lens of the customer experience. Luxury brands should ask themselves: Does this process add value to the customer? If not, it’s time for a change. What is often forgotten is the after-sales process. This is where many brands fail miserably, as the focus (including sales incentives!) is practically always more on the sale. But what brands forget is that the moment a client needs help and is in a vulnerable state, the relationship can either be significantly strengthened or lost forever. Most breakups happen during the after-sales process. Third, leverage technology to enhance personalization. Advanced analytics and AI can help brands anticipate customer needs and tailor their offerings accordingly. However, technology should augment, not replace, the human element of luxury service. The goal is to create a seamless, personalized experience that feels both exclusive and genuine. Very few brands are proficient at this today. Fourth, implement a culture of continuous improvement. The luxury market is dynamic, with customer preferences evolving rapidly. Brands must adopt a mindset of continuous improvement, constantly seeking out ways to enhance the customer experience. This includes staying attuned to cultural shifts and emerging trends, ensuring that the brand remains relevant and responsive to its audience. Choosing empathy over arrogance I am always flabbergasted by how little luxury brands invest in training as a percentage of their total spend. But training is everything. Practically all brand breakups are triggered by a failure in human service delivery. What’s worse is that most brands are unaware of these issues, as breakups often occur silently. Merely being friendly isn’t sufficient when a client’s expectations are much higher. Arrogance almost always destroys the client relationship. The transition from an inside-out to an outside-in view is not just a strategic shift; it’s a business necessity. Luxury brands that embrace this change, putting the client at the heart of everything, will not only avoid the pitfalls of arrogance but position themselves for success in the increasingly hyper-competitive luxury market. By focusing on delivering extreme value through personalized, empathetic service, brands can cultivate a loyal customer base that views their relationship with the brand as not just a transaction but a partnership where extreme value is created. Arrogance is never luxurious. This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders to Watch.” He serves as an executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at NYU, New York. Daniel has authored best-selling books on luxury management in English and Chinese, and is a respected global keynote speaker. Daniel conducts masterclasses on various luxury topics across the world. As a luxury expert featured on Bloomberg TV, Forbes, The Economist, and others; Daniel holds an MBA and a Ph.D. in luxury management, and has received education from Harvard Business School. Follow him: LinkedIn and Instagram. All opinions expressed in the column are his own and do not reflect the official position of Jing Daily.

Opinion: Empathy over arrogance – luxury’s shift to Gen Z

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Published April 08, 2024

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Opinion: Empathy over arrogance – luxury’s shift to Gen Z