After reviewing Boston Consulting Group’s latest study on global luxury consumers here are the key action items for luxury brands.
- Reimagine your business: Brands need to reimagine most aspects of their business. Luxury is in the process of being redefined. We need to carefully listen to the consumer now to lead us into what is important to them. Why do people buy non-essential goods or experiences? In all cases they are looking for an emotional return. What is most valuable to the consumer now may depend on which country they live in and the level of luxury they are able to attain. Luxury brands should connect with their customers to ascertain what the mindset is now. How do they make a purchase more discreet, more valuable or more desirable? What level of customer service will enable customers to feel comfortable and for the brand to deliver on an upscale experience?
- Reset, streamline and invest: Brands are currently in “fight phase”. Those that can stand the test of time will evolve. Retail is undergoing an evolution. The goal for marketers should be to accelerate inspiration, purchase and post purchase communications. In this new system data gathering, analytics and targeting are the three key pillars worthy of time and investment.
- Give customers what they want: People are seeking a place for connection and socialization. How can you open up your brand experience online so that customers can socialize with others?
- Look to the future: In less than five years Millennials & Gen Z will make up 55% of luxury consumption. The brands that will succeed depends on the market. According to the BCG True-Luxury Consumer study those in the west will have a preference for brands that are understated & timeless, while in China consumers will have a preference for iconic brands with high brand visibility.
- Authenticity and sense of place: Brands must stay true to their identity and heritage.
- Sustainability is increasingly important to consumers: Sustainability is important and should be intrinsically linked to the purpose of the brand. If you are taking this on as a brand then your beliefs, actions, initiatives and overall business strategy needs to support the area of sustainability you are focused on.
- Relationships have never been so important. On-demand production is important, along with an elite level of customer service in what is termed “personalized clienteling”; knowing what the consumer likes and how they purchase. This will entail a new generation of relationship building for many luxury brands. Whilst brick and mortar department stores are closing, consumers have an interest in multi-brand stores online. The question is how will brands execute fashion shows, private shopping, private showing, test and try, and brand storytelling online. Surprisingly, and until now, many luxury brands have not needed to extend themselves on their websites. Websites were used as digital brand billboards for many years and only now are the luxury brands catching up to what we all knew would be needed, ecommerce. Now is the opportunity for the not only to replicate what has been tried and true but to leapfrog others by reinventing the customer experience online.
Review the Boston Consulting Group True Luxury Insights Study. (June 2020)