Seven trends to shape the luxury industry in 2019
The fashion and luxury industries are evolving at a faster rate than ever
before, with key trends set to shape the industry in 2019.
Compiled by the Luxury Institute’s global consulting unit Global Luxury
Expert Network (GLEN), seven trends have been identified to help brands
stay ahead of the competition.
Alpha Growth
With Gucci as a benchmark, many brands hope to achieve its double digit
increases since CEO Marco Bizzarri took the helm and appointed Alessandro
Michele. According to GLEN, Gucci saw consistent growth over three years,
proving that alpha growth is a skill, not luck.
Such growth can be achieved by executing three bold moves, according to
Luxury Institute CEO Milton Pedraza. The first is to conduct an honest
analysis to confront any realities that may hinder performance. The second
is to extend the enterprise outward into new territories to collaborate
with consumers, influencers, charities, artists and other members of the
brand’s global ecosystem. The third move is to leverage technology, data,
analytics, and A.I. to communicate the brand’s story and engage in open
dialogue with the entire ecosystem.
Legacy luxury brands re-examine the value of brand heritage and
history
Brand heritage and history are not the key factors that they used to be.
Luxury brands used to be able to boast that they had been established over
a hundred years ago, and beyond. That legacy earned a brand premium status
and premium pricing over less pedigreed offerings. Today, Millennials,
Generation-X, and even Boomers, see brand heritage as a far less valuable
luxury brand attribute.
The new luxury goes beyond luxury
While fashion luxury goods and accessories categories capture all the
headlines today, new and innovative categories of the future are emerging
far beyond the noise. Luxury Institute research and new client requests
indicate that innovative start-ups are vying to capture the imaginations of
the wealthy.
Research that the Luxury Institute has conducted with billionaires through
its Global Luxury Expert Network (GLEN) finds that the wealthiest consumers
are intrigued by new categories of luxury such as life extension
biotechnology, hyper-experiential home virtual reality devices,
neuro-scientific performance enhancers, health care robotics, and a
multitude of travel experiences that defy gravity. Wealthy individuals are
no longer impressed by what they view as mundane luxury goods and services.
Luxury begins to pivot from product innovation to people innovation
The luxury goods and services industry historically has invested heavily in
product development. Major brands are now pouring billions into data,
analytics, A.I. and other technology innovations in an effort to remain
relevant.
Brands such as Moda Operandi, Fusion Academy, and Hello Alfred are leading
the way in re- humanizing luxury across several goods and services
categories. In 2019, look for luxury brands with enlightened leaders to see
technology for the commodity that it is, and begin investing in people
innovation, realizing, at last, that it is, by far, the biggest ROI
opportunity in luxury in the age of A.I.
Affluent consumers continue to lose trust in Facebook and other social
media brands
In the Luxury Institute’s 2018 Emotionally Intelligent Brand Index survey
on technology brands, Facebook was rated lowest for emotional intelligence,
according to affluent consumers. One in five affluent consumers report
actively discouraging friends, family or other people they care about from
using Facebook.
The local luxury consumer-to-consumer sales channel takes off
Most luxury goods and services brands think of their distribution channel
options as comprised of three choices. They can go the wholesale/third
party approach, develop their own retail/sale force channel, or they can
sell via e-commerce. Now, new simple, effective app technologies are
facilitating the development of the fourth channel, a network of devoted
brand customers who become local influencers and sell directly to friends
and family through apps that connect to the brand’s website. This approach,
within ethical boundaries, is far more personal and effective than using
celebrity influencers who are being perceived more, and more, like
mercenaries, who buy fake followers, and are not true brand users or
advocates. Look for this consumer-to-consumer channel to emerge rapidly in
several luxury goods and services categories in 2019.
From omnichannel luxury to omni-personal luxury
Today, customer segments and channels have become the standard and easy way
for luxury brands and their partners to attempt to categorize and interact
with consumers.
Unfortunately, the current customer interaction efforts are executed with
the static mind of a software engineer instead of the mind of a wonderfully
complex human being. Customers, especially Millennials, who understand what
technology enhanced with emotional intelligence can do, think in terms of
individualized, seamless brand relationships akin to the relationships they
have with friends and family members.
Photo credit: The Luxury Institute website; Article source: Global
Luxury Expert Network (GLEN) whitepaper