Luxury brands must be as adaptable as their Millennial clientele in a climate of political and economic uncertainty. The political landscape of 2016 rendered sobering lessons for business and industry leaders.
Brexit, Trump’s presidency, fluctuating currencies, and the threat of terrorism tested government infrastructures the world over. This murky political uncertainty influences the buying behaviour of consumers.
As such, transparency and social responsibility are growing demands from Millennials, one of the largest generations in history.
Finance experts such as Goldman Sachs believe that these Digital Natives are moulding traditional economic practices.
Millennials are also changing the rules for luxury brands, and pundits predict that by 2035 they’ll be the highest spending generation ever.
Additionally, the exponential growth of technological advancement sees AI as an integral aspect of business models.
To evolve with political, economic, and technological unpredictability, here are five trends that will allow luxury brands to survive 2017.
On-demand is in demand for luxury brands
Processes in design, manufacturing, and delivery are taking advantage of time and technology. Messaging apps and social media are are powerful tools for giving luxury consumers what they went, when they want it.
Millennial consumers are characteristically unpredictable. An acceptance of change, high rate of travel, and tendency towards scepticism represent this trait. For a demographic accustomed to exchanging information the blink of an eye, real time responses are integral.
In 2016 Burberry pioneered the “see now, buy now” practice, where consumers were able to immediately buy items fresh from the runway.
For a mercurial generation skilled at navigating the Internet, other luxury brands will take a similar approach. Couriers will deliver goods and products to customers in mere hours. With e-commerce extending to in-app purchases, this process can only continue to grow.
Explore the experience-driven
The luxury industry will also provide experiences, and not just tangible products.
According to Luxury Daily, “[travel] experiences are proving to be dramatically more important to affluent Millennials, with most interested in hotel accommodations and flight tickets rather than luxury goods.”
Furthermore, subscription-based models represent major aspects of experience-driven services. Specifically, this replenishment of services is seen in the delivery of groceries, laundry, and healthy cuisine. High-end beauty products are already performing well in this model.
The dark side of social
Social sharing that isn’t tracked through analytics platforms is categorised as Dark Social.
Alexis Madrigal, former deputy editor for The Atlantic, coined the term in 2012. Examples of Dark Social include Snapchat, Whatsapp, Facebook messenger, email, and instant messaging.
Dark Social is evolving as a dynamic vehicle for companies becoming more responsive. Data shows that 77% of sharing happens on its platforms, along with 70% of worldwide brand referrals.
Companies in the luxury industry traditionally do not prioritise social media in their business models, and most brand-related conversations happen between consumers.
Thus, tapping into Dark Social ensures that the luxury industry improves its social media presence, and takes advantage of an innovative resource.
Dare to be discrete
The growing preference for consumers in the luxury industry is individuality. Experts report that more customers are opting for personalised products, while also valuing subtlety in logos.
Burberry provides embroidered initials belonging to the consumer on The Rucksack, one of its best-selling bags.
Furthermore, diamond behemoth De Beers cultivates personalised luxury through its Forevermark series. This service ensures brand authenticity and individuality.
Therefore, customisation is a powerful tool for luxury brands to play to their strengths, and continue to be relevant.
Artificial Intelligence for Disruptive Needs
A form of disruptive technology, Artificial Intelligence (AI) is already a fundamental presence in industries undergoing revitalisation.
The narrative surrounding the automotive industry maps the evolution of driverless cars, while AI’s ability to collate and digest data far outstrips that of its creators.
While cyborgs aren’t crafting bespoke jewelry or steering luxury yachts, the influence of AI is becoming more pervasive in high end markets.
Digital aides such as Rob-advisors doll out wealth-management schemes, and chatbots are fulfilling simple tasks and requests in customer service. In fact, experts predict that these types of digital assistance will achieve revenues around a whopping £490 billion by 2020.
As such, the full implications of AI are still unclear. However, the traditional tendencies of many luxury brands could be given a modern boost by this innovative resource.