For centuries, luxury products were designed for high-end customers who were beautiful, wealthy and successful individuals who had distinctive qualities and enjoyed a privileged lifestyle.

But the digital-savvy millennial and Gen-Z consumers is a new luxury market — one that’s accessible and inclusive.

 

 

The new age of economic development accompanied by digitalization in China has made the luxury world less restrictive and more accessible to groups that, until recently, were seen as undesirable.

With China now being the largest market for gaming, more and more high-end luxury companies are creating digital games, which could help them better understand and engage with their target customers.

This article is dedicated to luxury goods marketing employing video games.

China has the world’s most video game players

The opening of Mainland China’s video game market to the world, combined with the rapid adoption of smartphones in China, has helped drive the extraordinary rise in video game sales of this country.

China’s gaming-industry revenue soared tenfold from 2008 through 2017. In 2018, China’s 620 million video game players spent about $38 billion on video games, or about 28% of the global market and half the global mobile market, which made China the largest video game market in the world, ahead of the US at $30 billion.

A study showed that 17% of China’s GenYers indicate “playing games on a computer or console” as their favorite pastime.

Another study, conducted by China’s Ministry of Education revealed that 23.6 percent of Chinese young people play online games for an extended period at least four days a week while 17.7 percent play them every day.

Why do Chinese young consumers love video games?

In China, political censorship has shaped the artistic dialogue. In the country’s highly digitalized universe, video games construct an unreal world free of limitations and constraints, which is why young consumers have turned to the gaming industry for self-determination.

Secondly, due to the one-child policy, most millennials don’t have siblings. They grew up socially isolated, and often turned to the internet and online games for social connection as they often played interactive video games as a way to interact with other kids and build online communities.

Furthermore, as the increasing competitive environment, social pressure and expectations from parents put a lot of stress on young Chinese, they are looking more and more for any escape from their demanding realities.

According to The China Mental Health Survey, 16.6 percent of Chinese adults had experienced mental illness in a moment in their lives, while the South China Morning Post reports that roughly 33 percent of young Hong Kong residents suffer from stress, anxiety or depression.

Consequently, young adults need stress relief, and video games bring them to the fantasy world for a while.

In an emotional economy where purchases are less about the product itself and more about how products make one feel, it’s no wonder that by marketing through their favourite games, brands can engage millennials on an emotional level.

Millennial and Gen Z make up a large part of luxury sales

Luxury brands have been focusing their effort on winning over millennial consumers. In fact, the entire luxury industry is duking it out to win over the hearts, minds, and dollars of the under-35 set.

Millennials and Gen Z are expected to account for 45% of all luxury spending by 2025, so it makes sense to earn their loyalty when they’re young.

Right now, Gucci generates more than half of its sales from this demographic, while about a third of Louis Vuitton’s sales come from millennials.

Winning the loyalty of millennial and Gen Z consumers will be so critical to the success of luxury brands now and more in the next five years.

It is not new that brands utilize games on social media to increase interaction with their customers. However, creating their own video games or branding through virtual characters is really groundbreaking.

Since luxury brands’ main audience is becoming younger, more impatient and more digital-savvy, brands are demanded to think of new ways to stay relatable.

Video games do not only bring luxury brands closer to more young customers, but also create a new, entertaining and engaging experience for them. It shows brands’ investment, understanding and effort to please millennial and Gen Z generations in China.

Moreover, brands can collect data and insights through the interaction of target customers with their games.

High-end brands are toughened up the game already!

Hermès with its H-pitchhh game

The latest example is Hermès, which recently released a mobile app called H-pitchhh.

Inspired by the traditional horseshoe throwing game that can be traced all the way back to Roman soldiers, Hermès allows players to virtually toss a horseshoe using a swipe on iPhone, not unlike throwing a Poké Ball in Pokémon Go.

They score points based on how close their horseshoe lands to the stake.

French luxury brand Hermès used a film campaign to publicise its horseshoe-throwing game, ‘H-pitchhh‘

There are five different levels to unlock, each of which is branded in the Hermès style. To accompany the game, Hermès also released a film campaign.

While the Hermès game is available globally, it’s an especially smart strategy for China, where the average luxury consumer is significantly younger and more receptive to gaming.

Guerlain succeeded with Wechat game

To celebrate its latest lipstick, the KissKiss Matte collection, Guerlain teamed up with a major player in duty-free shopping, Sunrise Duty-Free, to create a WeChat game.

Within 10 days of its launch, the highly addictive Tetris game had attracted 18,582 page views and 10,000 players.

At the end of the game, players were asked to submit personal information, such as their name and phone number, to enter a lottery, helping Guerlain build a database of potential customers.

The brand selected more than 300 winners.

Dior used gaming for O2O marketing

Dior also built an interactive game to generate awareness for the grand opening of a new store in Shanghai.

As long as users collected all six in-game Dior items, they could set off in a virtual hot air balloon and win a ticket to witness the real event in front of Plaza 66.

The campaign made full use of offline and digital channels to generate traffic as well as to offer a cohesive user experience.

Louis Vuitton and its Endless Runner game

In Endless Runner, as the game is called, you’re a little red character running through the rough streets of New York in the 1980s after dark.

Your goal is to hit the spacebar to jump over traffic cones, fire hydrants, and phone booths to score points.

This showed Louis Vuitton’s effort to win over millennial consumers, who are currently obsessed with 1980s and 1990s paraphernalia, decking themselves out in Reebok Classics sneakers, Champion T-shirts, and Fila fanny packs.

Moschino, Gucci, and Uniqlo have each envisioned video game-inspired collections.

While Moschino created an entire collection of Sims-inspired pieces, and Gucci has drawn inspiration from old Sega video game consoles, the Japanese retailer Uniqlo is now designing apparel with motifs from the popular game Monster Hunter.

These collections don’t have a universal appeal but are produced exclusively for a younger, cooler consumer base.

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Conclusion

The sophistication of Millennial and Gen Z consumers leaves no choice for luxury brands but to step up their game in the design of customer experience to achieve sustainable growth and develop long-term client relationship.

Brands who are successful in doing so are the ones who can incorporate technology and emotion in their brand DNA to get closer to their target and their aspirations.

Video games is a trend and will keep being critical in the marketing strategy of luxury brands to reach, engage and convert their Chinese young and demanding customers.