Before the digital revolution luxury brands created quite strict rules concerning luxury strategies, which were easy to follow. Many rules are still extremely topical and they are not going anywhere. However, Luxury Expert Luca Solca wrote a very nice article Luxury's New World Order in Business Of Fashion (2.5.2019). He wrote that "Brands that believe luxury is about static, timeless appeal are falling by the wayside.". Solca mentioned Gucci and Louis Vuitton as great examples but we have also seen how well Chanel, Versace and many others have kept a good pace.
The digital revolution and the major change in buying behavior plays a major role in market confusion because there are multiple buying channels for consumers. Luxury brands have their own shops and e-commerce sites. There are also wholesalers in brick and mortars and online as well. There can be situations when pricings are not well coordinated but this should not be a challenge for luxury brands.
The digital environment creates easy access for newcomers. Singer Rihanna's Fenty Beauty is a great example of how a prominent brand ambassador can bring a new brand into the spotlight. No wonder why LVMH is interested in the brand. But in a saturated marketplace, it is always a challenge to launch new luxury brands because every single company requires a large number of investments in order to credible.
Hence, let us get back to the discussion concerning static and timeless appeals. Luxury has always been about creativity and being extremely bold and playful. But there have been times when luxury brands have been playing extremely safe because there are liberal times and conservative times. Now we are seeing a very liberal time like in the swinging 1960s but there will always be brands, which are either radical or classical - or they introduce different collections in different periods and markets.
The global luxury industry is living its best time in world history but every brand must stay agile when it comes to modern customers experiences in shops and online. But at the same time, they must stay relevant in the marketplace. Millennials and Generation Z are leading the marketplace forward, which is quite liberal. This means that brands have the possibility to embrace the new playful culture by showcasing themselves more boldly. British fashion house Burberry made a great strategic "U-turn" and we will see other great surprises as well.
It is certain that we are living in a period of great transformation. China is already a big market and customer needs must be satisfied by delivering products and services, which fit the culture in a proper manner.
The Commonwealth countries such as India and Pakistan are rising rapidly and many African countries as well. Asian and African cultures will leave their marks into the global luxury industry. There are an enormous amount of opportunities in the global marketplace, and yes, every single luxury brand should embrace change. Being global and staying local might be the right strategy because brands collect an enormous amount of data from the marketplace but data should not be the only driver when it comes to creativity and innovation.
This is the official blog of The Luxury Sales Academy. Articles have been written by Founder, Master of Arts Jukka Aminoff FRSA.