Luxury brands were once the domain of the wealthy, but now, luxury brands are targeting middle-class consumers. The explanation is that market dynamics are changing, consumers have aspirational consumption patterns, and there are long-term pricing strategies. Let us get ourselves informed regarding the history of luxury branding based on market statistics and research.

The Evolution of Luxury Branding
In the past, luxury brands served high-net-worth consumers, and quality and exclusivity were the defining characteristics. With globalisation, e-marketing, and aspirational consumption, markets for luxury brands have been expanding.

Middle-class consumers are increasingly responsible for the rise in luxury goods revenues, especially in newly industrialising economies such as China and the Middle East, a BCG-Altagamma True-Luxury Global Consumer Insight Survey (2023) finds.

Luxury Brands Targeting Middle-Class Customers

1. Aspirational Consumer Behaviour
Middle-class consumers consider luxury products as a status symbol, which reflects success and upward mobility. Social media and celebrity endorsement create a lot of demand for designer handbags, watches, and clothing.

2. Strategic Pricing Strategies
Layered pricing strategies are being used by luxury players, providing introductory products such as perfumes, accessories, and small leather products. Middle-class consumers are thus able to experience luxury at affordable prices.

3. Social Media and Digital Influence
Social Media platforms like Instagram and TikTok have promoted luxury goods to be accessible to the masses. Online campaigns and influencer marketing also has got boosted as they induce eager, and middle-class consumers proceed to purchase luxury goods.

4. Simple Payment
Luxury brands now provide EMI schemes, buy-now-pay-later offers, and credit card financing options, making it easy to pay for middle-class consumers for luxury goods.

Survey Insights: The Middle-Class Luxury Boom
Middle-class consumers now account for 40% of revenues for luxury brands.

Online shopping among luxury buyers has grown 25% in the past five years, fuelled by the middle class.

China and Indian markets are part of the two fastest-growing markets for luxuries where year-to-year consumption by the middle class is on the rise.

Not just the ultra-rich are presently purchasing luxury brands. Having mastered promotion, price, and availability, they have facilitated reaching middle-class consumer levels and generating a new wave of aspirational luxury consumption.

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