Over the next three-to-five years, the luxury retail scene will be driven by a number of key trends aimed at satisfying consumer needs, fuelling spending and luring in new clients. Some of these things are already well underway in the sector. Brands that wish to stay ahead of the game will need to understand and master the following:
1. Channels will thrive in unique ways
Retail will move in three different directions to service the needs of luxury consumers. The digital channel will drive research and stocking up on favourite products, while bricks-and-mortar stores will reach out to their clients through customised offerings such as express counters, top-10 product-style kiosks as well as assisted shopping services. Entertaining consumers across both digital and physical channels will also be key.
2. Broadening the geographic focus of marketing
Looking into new geographical areas such as Africa is something brands such as Zegna, MAC and Hugo Boss are already doing, having recently opened stores in Lagos, Nigeria: the new luxury hotspot. Online retailers are also shipping to the continent and starting to focus their marketing efforts on the region.
3. The increasing importance of tourism
Luxury brands, particularly those in Europe, are increasingly relying on international travel and tourism to fuel sales, primarily from China, Russia, the Middle East, the US and Africa. Tourists purportedly account for 55% of luxury sales in the UK, 60% France and 50% in Italy.
4. Anchor down price points based on brand identity
While in the past luxury brands attempted to offer multiple price-points, brand confusion and erosion of luxury credentials was often the outcome. Now, luxury is being pulled in two opposite directions, and brands will need to choose sides: accessible or ultra-luxe.
5. Shoppable media will expand
Media-wise, magazines, newspapers and TV will become the new digital storefront, reinventing themselves to allow customers to buy their favourite items, looks or beauty products straight off the editorial pages.
6. Shifting consumer demographics
The menswear market is extremely bullish, growing at 1.5 times versus womenswear. While 35-years-old-plus male consumers still dominate, the millennial generation drives retail spending through its modern aesthetic and digital knowledge. That said, many womenswear brands are either launching or revamping their menswear offering.
7. The challenge of being personal in digital
The openness of digital platforms dictates that to make luxury customers feel special, brands need to get personal. The rapid rise of Instagram, live streaming and behind-the-scenes footage will leave consumers feeling like they’ve already experienced everything. Brands are now challenged with creating truly personal, fresh and meaningful experiences.
8. Brands become media channels
Luxury brands will increasingly become media channels, creating content that is far richer than today’s aspirational blogs, videos and magazines. Retailers will offer multiple channels with high-quality and entertaining shoppable content updated on an hourly basis.
This advertisement feature is provided by Havas Media Group, sponsors of the Guardian Media Network’s Organic marketing hub.
