ASK THE EXPERT: GETTING NEW LUXURY CUSTOMERS
I often get asked how to attract new and younger customers into our luxury brick and mortar stores. Is it by opening at lower price points? A change in marketing? Or something else?
My answer – that a typical high-end menswear store has, and might continue to have, a hard time attracting young customers – sounds disappointing. But we are attracting younger customers, and that’s what really matters.
In our stores, the younger customer could be the 50-year-old guy who has slowly evolved into luxury products. And guess what – he is buying the same products as the generation before him, and often the same brands. These guys don’t want a lower price point. They want to dress as well as their fathers, uncles, and business associates do– in true luxury products.
In fact, a recent report by McKinsey & Co. backs up what we are seeing in our stores. “The Silver Generation,” as they call them, aged 50 and up, represents “a growing population with a high share of global spend” that has been overlooked in the past. In fact, this same report* states that 72% of U.S. wealth is in the hands of those over 55.
So, the model that many of our stores are based on – that we provide beautiful, expensive products to experienced (older) customers who have money – is not broken. A new generation, maybe just 10 to 15 years behind the current customer, has always stepped up and continues to do so. I don’t see any signs that this model needs to be replaced for our stores to thrive over the next 10 years.
Now, let’s talk a little more about pricing, specifically the idea that we need to open lower price points. We all see the prices continuing to move up and this is concerning. We wonder, when will we hit the top when the consumer will no longer pay this much money for an article of clothing?
I’m not sure where the top is, but I can say that we are not there yet. Last season some of our stores took a bet on outerwear that was $10,000 a unit. Guess what? They sold out.
In fact, a lot of the business we have seen recently is because we’re going deeper into high-priced luxury products for our existing clients. At this point we are not seeing retailers miss business because they haven’t brought in lower-priced lines. The luxury menswear market continues to look strong. In fact, our better men’s stores saw a growth rate of 5% in 2024 over the previous year.
Expanding our market by providing luxury clothing to young customers sounds exciting, but the truth is those guys are looking elsewhere, for now. We may get them later, and they could be the ones who will pay $15,000 for a piece of outerwear. Time will tell.
For now, let’s focus on our current customers, and their somewhat younger friends and family members. Put a few social events on your store calendar encouraging customers to bring in their social circle. Make it fun and provide a welcoming space for these current, and hopefully future, customers.
*The State of Fashion 2025, McKinsey & Co.
Steve Pruitt is founder and Senior Consultant of Blacks Retail Analysis and Blacks Consulting. With over 30 years of experience, Steve is one of the most respected merchandise analysts in the industry. His specialty is apparel merchandising and he has worked with clients in every sector of this category. Email: steve@blksretail.com.