The luxury industry is going through some tough times:
- Developed markets are less interested in traditional luxury ownership;
- Developing economies are slowing down;
- Terrorist attacks in Europe scare away tourists (according to Bain & Co. a third of the luxury market comes from purchases by tourists).
The perception of luxury is changing as well – for consumers aged 21- 49, the security of the brand name is not enough. The expectations are shifting from badges to value, from product to experience, from decadence to responsibility, from uniform to customisation and from brand expression to personal expression. Even the concept of status through ownership is being challenged as large numbers of new consumers gain access to luxury products through rental services.
Companies need to consider new approaches that will resonate with their brands, whilst taking into account the cultural trends that are going to define the industry for the next 15 years.
- What if luxury brands told their stories in an engaging, not self-aggrandising way, focusing on aspects important to customers?
E.g. heritage is a great asset, but does it automatically come with increased value?
- What if luxury communications were more meaningful or, at least – distinctive?
E.g. support a charity or a movement – the new era of luxury takes ethical sourcing and sustainability seriously. Monochromatic pictures of beautiful wealthy people will not cut it; even if they are celebrities.
- What if luxury brands used technology in an innovative manner that adds to the customer experience?
E.g. in times of ubiquitous piracy and mass-market copycats, celebrate craftsmanship by allowing customers to easily access the full history of any item in store – where the materials were sourced, which master assembled them, how long it took etc.
- What if the digital channel was more than a catalogue or a photo album?
E.g. a club, offering brand-relevant services, celebrating the luxury of access.
- What if luxury stores were less like museums and more like experience centres?
E.g. fashion stores could have rooms that would simulate different lighting and weather conditions. Flagships could take a deep dive into brand culture.
- What if luxury brands shifted from sponsoring events to hosting experiences?
E.g. concerts organized for small groups in an intimate settings or guided tours to brand-relevant locations.
More on Luxury: Luxury v Premium
Another “What if…”: What if hospitality embraced digital?