Whether through store or influencer, luxury labels are perfecting their messages in reaching out to a new generation of shoppers. Image Credit: Supplied

From Gucci to Chanel, Hermès to Dior, some of the world’s leading luxury companies are looking to younger consumers as a critical growth lever for their brands. This is sparking a pivotal global shift in how luxury goods companies connect with their customers. And no more so than in Dubai, home to more than 62 per cent of the world’s leading brands.

The millennials and Generation Z are predicted to be key driver of change in UAE’s booming retail sector, a country where the youth bulge – the percentage of the population under 25 years – stands at 27 per cent. With Dubai being one of the world’s leading shopping destinations, new studies show the importance of young spending power for the future of the sector.

So, gaining a share of Gen Z spending is vital for global fashion houses and luxury brands – especially in the Middle East; a region where more than 28 per cent of the population is aged between 15 and 29. But what millennials and Gen Z expect from luxury brands is radically different from previous generations, and that will change the course of the retail markets in the UAE and GCC.

Brands keep coming

Dubai has managed to cement its position as a leading shopping destination by attracting the most renowned luxury brands. The new generation of shoppers, however, is causing a huge shift in the definition of luxury shopping. Global brands targeting this segment have had to adapt, with designers developing innovative fashion concepts to appeal to this generation, and global fashion houses launching their seasonal collections in key fashion hubs, including Dubai.

Fashion extension

It’s a trend that’s clearly on the rise. Collaborations are key to the new luxury. The new generation of shoppers is looking for innovation in design, along with unique collections that reflect their individuality and values. Limited-edition collections, and luxury-brand pairings with cutting-edge, youth-inspired designers, like Rihanna, are among the demands of younger consumers.

In Dubai, this is visible in malls, with Jimmy Choo x Mugler, Balmain X Barbie, and MAX&Co X Margherita Maccapani Missoni as some of the latest collaborations to hit local stores. While fashion weeks and marketing campaigns have been essential ways for brands to maintain vibrant relationships with consumers, one-in-two Gen Zers are looking to influencers to identify the latest trends in luxury.

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Dubai provides visitors with an extensive range of luxury retail offerings. Image Credit: Stock image

Louis Vuitton worked closely with YouTube star Emma Chamberlain for years and recently featured her as the face of its Fall/Winter 2021 shoe collection, while Prada tapped TikToker Charli D’Amelio to sit front row at its 2020 Milan fashion show to promote its collection.

Social media platforms offer premium brands an opportunity to reach shoppers in new places and improve engagement rates. Social commerce – where retailers use social media channels as mediums to promote products and services – will be the next growth frontier for local retailers, who are already benefiting from e-commerce’s explosive growth, especially after the pandemic.

Snap vibes

A recent report by Snap says the ‘Snapchat generation’ in the Middle East and North Africa alone is estimated at $425 billion in spending power. Aside from traditional e-commerce, this social commerce trend is expected to unlock millions more in new revenue for Dubai’s major retailers.

Accessibility will also be vital for the future face of retail. The pandemic forced many traditional luxury brands to go online. But changing the in-store experience will continue to be vital, especially in Dubai and the wider UAE where a hybrid retail model is enticing younger shoppers.

Recent reports also indicate an increase in Dubai’s leisure and entertainment sector, as consumer appetite for fun experiences went up. This trend is predicted to continue as the emirate enhances physical retail experiences that complement virtual ones, together aimed at driving sustainable growth across the retail sector.

Time and again, the luxury industry has proved itself capable of makeovers. But millennials and Gen Zs might just be forcing the luxury sector’s biggest reimagining to date. Where better to do that than in Dubai, the city of reinvention.