Luxury Outlook 2023
An ambitious exploration into high-end residential markets across the globe.
We’re witnessing the largest intergenerational transfer of wealth in history. The luxury market is being reshaped by the emergence of new luxury consumers, ones who are acutely aware of being sold to, skeptical of traditional marketing tactics, and dismissive of volume as an indicator of wealth. Millennials and their buying habits are more acute than any generation before them—bringing new challenges to the luxury space.
I spoke about this recently with Forbes, but throughout my career, as I’ve moved from education to fashion, and now to luxury real estate, I’ve seen how successful brand connection comes from strong storytelling. This audience spends an average of five hours online each day, so they’re already bombarded with brand messaging. We want their loyalty and business, but first we need their attention. This is how we’re earning it.
For a generation that values authenticity, the stories behind the products have never been more important. Brands must prove investment in quality and craftsmanship. The Sotheby’s brand has a 270-year history—and we extend this directly to our clients.
Because of the Sotheby’s auction heritage, both established and emerging affluent consumers view association with the brand—working with a Sotheby’s International Realty agent, for example—as a benchmark of success. It’s certainly a differentiator that Sotheby’s once sold the library of Napoleon, but it comes down to how we frame that for a Millennial audience.
Brands like Burberry understand this well, balancing a storied history with contemporary brand posture. Burberry’s shift to social media platforms with inspiring, current brand ambassadors works to enhance, not detract from, the company’s prestigious 162-year legacy.
Consumers want to know luxury brands are shifting to meet their individual needs, and see brands that don’t evolve as static or dated. Our core message really comes alive through new innovation, and in that respect, we’re more of a brand marketing organization. A cloud-based ad building tool allows our affiliates to access our unique design mold when creating advertising collateral. That means over 21,000 agents are able to seamlessly communicate our brand to global audiences while adding essential local lifestyle elements to really draw them in.
Millennials and their buying habits are more acute than any generation before them—bringing new challenges to the luxury space.
Digital media is perhaps the most significant way we can make meaningful connections with these consumers today: VR, 3D home tours, and high-definition photography all service their need for inspiration and transparency. Our video-centric digital approach follows Millennials’ natural discovery behavior. We’ll be pushing the envelope again at the end of February as we unveil augmented reality that’s the first of its kind in the real estate industry.
Our LIVE campaign approached property investment as a key component of the lifestyles of fascinating people. It speaks to the fact that a Sotheby’s International Realty home is a catalyst for the lives our audience seek. Our approach is not dissimilar from the Apple iPad campaign — one that has always stuck with me — with the tagline “this is what matters.”
It’s simple but powerful, appealing by focusing on the opportunities the product creates.
Emerging affluent consumers are spending more on experiences than personal goods—a trend that is only continuing to grow. Because of this, they reject brand braggadocio and baiting tactics, looking instead for a genuine connection with the brands they support. They’re also looking for bespoke service. Forming a relationship with Sotheby’s International Realty means entering a curated marketplace, with the finest properties handpicked by our sales associates. Our home collections prove we value our clients’ time by giving them refined options from the outset. This focus on localization and personalization is essential for an audience who’s come to expect it.
“this is what matters”
There is immeasurable value in forming connections with this audience, not only in a manner of wealth, but also in reinforcing the perception of the brand. In marrying our history of excellence with innovation and meaningful storytelling, we’ve created an entirely new roster of clients. Ones we hope to be with every step of the journey: from their first property to their retirement haven.
(Photo credit: Sotheby’s International Realty – Downtown Manhattan Brokerage)
Kevin Thompson, chief marketing officer, Sotheby’s International Realty Affiliates LLC
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