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The five challenges facing luxury

Luxurythinktank conference 1nov17 24

In October, luxury retail group Walpole hosted the London Luxury Think Tank to discuss innovation and creativity in the market.

Digital walls

Technology may have revolutionised the retail sector, but the next question facing luxury is how to effectively harness tech innovations to connect to consumers, without isolating them. 

However, the problem lies in ensuring that seamless interaction.

“Technology is great,” says Michael Ward, managing director, Harrods. “But how do you do it in a way that blends in with the customer?”

“Some in-store tech puts barriers between the customer and the experience,” added Jonathan Chippindale, CEO of creative studio Holition. “We need to close the gap between technology and humans. Technology should simply be another channel of communication.”

Tech for tech’s sake

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Luxurythinktank conference 1nov17 56

Jonathan Chippindale, Jessica Graves, Alain Harfouche and Michael Ward

As the constant drive for innovation accelerates, there is a danger that consumers’ needs are a secondary motivation.

“There is too much technology turnover because brands are always looking for something new,” said Chippindale. “They are driving innovation before consumers are used to earlier technologies, and it can be hard to figure out what technology is actually useful.”

Ward agrees, saying that 90% of technology on offer is “irrelevant” for overloaded consumers. 

Martjn Bertisen, sales director of Google UK, however, noted that tech’s potential lies in the day-to-day running of businesses: “The real gains in the short and medium term are in the back end of businesses. Machine learning and artificial intelligence offer up the next opportunity to innovate.”

The consumer trust gap

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Luxurythinktank conference 1nov17 69

Trevor Hardy, Sasha Wilkins and Jace Tyrell

Consumers are increasingly sceptical, and crave authenticity and honesty.

“The defining characteristic of the modern consumer is a lack of trust,” said Sasha Wilkins, founder and editor of the blog LibertyLondonGirl.

Trevor Hardy, CEO of research company The Future Laboratory, highlighted that luxury brands are well placed to fill this gap, if they leverage their heritage to engage with communities: “Consumers have changing desires in what they want from businesses. There’s a disconnection between people and businesses. The way to reconnect is for businesses to be engaged in the community, and luxury businesses feel the need to engage.”

Jace Tyrell is CEO of New West End Company, which represents landlords and retailers on London’s Oxford Street, Regent Street and Bond Street. He explained that its approach to tackling air pollution in central London is already demonstrating this practice:  “We have a duty of care to look after the consumer. It’s as much a business decision as it is an ethical one. People care about the values of a company.” 

Getting experience right

As retail pivots towards the experiential, the nature of experience has shifted, and there is an increasing need for innovation to appeal to the consumer.

“People shop to experience something different,” explained Sylvie Pickavance, group strategy and business development director at Value Retail Management, which runs luxury outlet centres including Bicester Village. “They choose to be inspired and surprised and they want to feel like they have learned something. The memory of the moment is as important as the product itself.”

Hardy similarly stresses the importance of cultivating meaningful experiences: “We’re in danger of running into the problem that people become overloaded with experiences. We have to rethink experiences. They have to change the consumer in some way.”

The luxury balance

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Sir Paul Smith

Designer Sir Paul Smith emphasised the importance of an equal division of creative and commercial in luxury businesses to thrive.

“Luxury needs balance,” he explained. “Create some things that you know will sell, and some stuff that you’re passionate about.”

Rather than focusing purely on passion, Smith emphasised that in his own business, his creative designs help to keep the brand image strong: “The special items are what keep a brand alive, but you also have to think about what pays the rent. If I put what sells on to the catwalk you’d all be asleep.”

Readers' comments (1)

  • Luxury retail has invested in far too much tech that is simply gimmick. Over-egging the consumer benefit like typical marketers. Press lap it up and provide the column inches. Yet you rarely read about actual results or follow ups to these much publicised launches. Journalists don’t appear bothered to investigate. Perhaps because it risks future advertorial fees?

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