To keep yourself ahead of the game here’s what luxury professionals be looking at.
The luxury goods industry has been heavily impacted by the Covid-19 crisis in 2020. The core personal luxury goods market has witnessed an unprecedented fall in the market size for the first time since 2009, falling by 23 per cent at current exchange rates to hit EUR217 billion reaching at 2014 level.
The turmoil of Covid-19 has reshaped the profound global market’s way of living, the way they shop and redefining what they value.
Consumers are now more conscious of when and why and how they purchase luxury products.
The luxury industry has witnessed a soar in online shopping for luxury goods, doubling its share of the market to 23 per cent in 2020 from 12 per cent in 2019. With travel being at a halt, local consumption has roared ahead across all channels, categories, generations and price points. The share of purchases made locally reached 80–85 per cent this year and going forward is expected to represent between 65–70 per cent as domestic purchases regain relevance especially in China and the broader Asian region.
The pandemic has fastened the pace at which brands new paradigms of value creation. Now more than ever, luxury goods companies are seeking new ways to connect with their customers. They are reinventing and re-imagining themselves in previously unimaginable ways.
Here are a few trends that luxury professionals should follow to remain relevant in the given times:
Acceleration of digital adoption
The changes brought by Covid-19 increased the presence of online in every aspect of life. According to Bain & Co report, “In the luxury market, online sales made up EUR49 billion in 2020, up from EUR33 billion in 2019. The share of purchases made online nearly doubled from 12 per cent in 2019 to 23 per cent in 2020”.
The pandemic manoeuvred the industry’s hesitation to adopt digital platforms. Online is set to become the leading channel for luxury purchases by 2025, fuelling the omnichannel transformation.
Further from Bain reports — they expect no growth in the number of stores operated directly by brands in 2020 and a possible decline in-store networks in 2021.
Brands will require to re-strategize their footprints to the new map of luxury buying, evolve the roles of stores, and deploy technology to maximize the customer experience.
Brands with a social purpose
A brand’s umbrella for social cause expands as it now needs to channelize its responsibility towards diversity and inclusion issues along with the existing sustainability and environmental subjects.
Younger generations — who are set to drive 180 per cent of the growth in the market from 2019 to 2025, are the “activist” consumers who seek brands that align with their vision and desire for purpose.
Brands need to rewrite their vision buy not only focusing on the concept of luxury but as the market for insurgent cultural and creative excellence.
Privacy and personalization using Edge AI
Data privacy is the need of the hour where the customers want to feel empowered and secured and not vulnerable. Affluent clients now demand privacy and security when they conduct high-value, high-risk, high-investment and high-emotion decisions and purchases. Brands need to focus on establishing a privacy policy that is legal and ethical and ensure that consumer data will be collected only by honest and clear, not by deceptive consent. By employing the budding technology — Edge AI — a recent innovation in artificial intelligence, promises advanced security, privacy, personalization and cost advantages vs existing Cloud AI, making Edge AI a crucial technology for luxury professionals in the coming decade.
Brands need to shift their attention from playing win-lose with privacy policies to laying the foundation of trust and permission-based consumer data access that propels advanced personalization.
Client relationship using EI
When it comes to luxury, status is becoming less about “what I have” and more about “who I am”. Emotionally intelligent organizations have seen to report significantly stronger employee and customer experiences, higher levels of customer loyalty, and greater customer advocacy by a factor of 4:1
Privacy and personalization using Edge AI: Data privacy is the need of the hour where the customers want to feel empowered and secured and not vulnerable. Affluent clients now demand privacy and security when they conduct high-value, high-risk, high-investment and high-emotion decisions and purchases. Brands need to focus on establishing a privacy policy that is legal and ethical and ensure that consumer data will be collected only by honest and clear, not by deceptive consent. By employing the budding technology — Edge AI — a recent innovation in artificial intelligence, promises advanced security, privacy, personalization and cost advantages vs existing Cloud AI, making Edge AI a crucial technology for luxury professionals in the coming decade.
Brands need to shift their attention from playing win-lose with privacy policies to laying the foundation of trust and permission-based consumer data access that propels advanced personalization.
Hope this article gives you an insight as to where you should focus on your skills.
Always looking ahead for future trends.
Client relationship using EI: When it comes to luxury, status is becoming less about “what I have” and more about “who I am”. Emotionally intelligent organizations have seen to report significantly stronger employee and customer experiences, higher levels of customer loyalty, and greater customer advocacy by a factor of 4:1
Brilliant IQ (intelligent-quotient)would generate capable luxury brands, but to be a leader in the industry, luxury professional needs their EQ to be higher than their IQ. People want brands to be human. The marketers need to understand their audience emotions closely and strategise on how they can increase their engagement with them in turbulent times. Through using emotional intelligence in the art of marketing, brands can build and retain a stronger and loyal cliental base thereby pushing their sales.
As digitization opens up new growth avenues, building sustainability and maintaining a circular economy will be key for luxury companies to thrive in these unprecedented times. The luxury industry needs to evolve, learn and adapt at an accelerated pace. As the old saying goes “Change is the only Constant” stands apt for the ever-evolving luxury market.
