Luxury brands should invest in three key areas between now and 2020 to thrive in an increasingly competitive market, a new report has found.
The three trends are: exclusive collaborations with relevant partners; secret and exclusive retail experiences; and personalisation.
“So many digital trends have been around for a while, but these are the ones getting cut-through in the luxury sector,” explained Carla Buzasi, global chief content officer for trends analysts WGSN, at the launch of the report, How to Attract the Luxury Consumer in 2020.
The research was based on a survey of luxury brands, carried out by WGSN and luxury membership group Walpole.
“What ties these three together is the value of experience over buying. For retail brands that can be a scary thought and a challenge, but we have looked at how they could embrace these trends.”
The report gives several examples of how these trends can work in action. For example, Alexander McQueen collaborated with high-end luggage company Globe Trotter on a range of suitcases.
“It elevated both brands,” said Buzasi.
Similarly, to promote its new Regent Street flagship, Michael Kors announced a tie-up with Formula 1 team McLaren Honda. Michael Kors will sell McLaren Honda leather jackets exclusively in the London store, while the drivers will wear Michael Kors branding on their overalls and cars.
“It’s about bringing fun things in your customers’ lives together, and surprising them. You have to make it social currency,” said Alex Field, global marketing director for Thomas Pink.
As an example of exclusive retailing, World of Niché is an invite-only sneaker store in New York, which has a strict no photos and social media policy.
Burberry was held up after it offered shoppers a personalised experience on Pinterest to launch its new Cat Eyes mascara last month.
Users took a quiz detailing how long they spend applying their make-up, what their signature “look” is and their initials. From this a personal Pinterest board was generated and each pin allowed users to click through purchase Burberry cosmetics from the brand’s ecommerce partner on the project, Sephora.
“Personalisation has become about so much more than using people’s names on newsletters,” said Buzasi.
Michael Ward, chairman of Walpole and managing director of Harrods
In an ever-competitive market, luxury brands must remain flexible rather than resilient to change to remain relevant and successful. Over the last decade consumer behaviour has changed in myriad ways. Some pillars of the consumer experience, such as outstanding customer service still remain relevant, but the ways consumers choose to buy are shifting.
Where once the product was the point of focus, we now see the brand moving to the forefront – consumers don’t just want to wear something, they want to be part of something. This new mentality is in part being driven by the influence of millennials and generation Z, but all age groups have the same desire to feel valued on an individual level: personally, socially and economically.
The first pillar of survival in this environment is creating unique and original brand collaborations. Strategic collaborations allow a brand to grow awareness, broaden their sales channels, increase the exclusivity of their offer – which is key to international growth – and create offers both in store and online. The best collaborations take a brand outside their comfort zone with a partner whose audience is similar but whose raison d’etre is different.
Second, creating exclusive and secret retail experiences is on the rise and will be of central importance as we move forward as an industry. Faced with the homogeneity of the digital world, where everything is available to consumers in an instant, drawing upon authentic and experiential tactics in store enable brands to make their shoppers feel valued.
Finally, personalisation of digital content is no longer a question of when and how much, but a consistent requirement for a modern brand. The instant connections provided by this new smartphone universe can leave consumers feeling isolated, so simply injecting a personal touch into your digital space fills this void and heightens the authenticity of branded content.
These tactics applied together will not only enable British luxury brands to provide synergy between the on- and offline experiences of their consumers, but will enable them to communicate new stories about themselves.