Burberry Kisses … Luxury brands must innovate to engage new consumers and embrace digital disruption
February 1, 2017
Instagram likes … Chinese consumers … immersive experiences … service-based start-ups … digital boutiques … magic mirrors … social influence … celebrity endorsement … instant customisation …. from runway to my door …
Luxury goods markets are being shaken up like never before … the rise of new consumers, from millennials to new Asia, comes together with the late but rapid adaption of digital media and technologies… means that luxury brands face more challenge, and opportunity than at any point in their history.
To win in the new luxury landscape, where Apple is as much a force as Cartier or Chanel, established luxury brands need to think like disrupters – with the mindset of a new consumer, and the actions of a entrepreneurial start-up. Whilst some argue that this is to risk the long-standing, carefully-crafted heritage of their brands, the bigger risk is to do nothing.
The best starting point is the consumer, not the technology.
It is the changing attitudes and behaviours, expectations and aspirations, of existing and new consumers that are the best starting point when thinking about the future – the best guide to innovation and new opportunities for growth. Change offers a roadmap for survival for established luxury companies. Luxury brands need to look at how the next generation of their customers behave and zoom in on the points of friction in their brand experience. Then, they need to become a solution to this friction.
In every industry, consumers are embracing new brands and business models – think Airbnb to Netflix, Surfair to Uber – typically enabled by the digitalisation of their markets – connecting buyers and sellers, enabling communication and trust between consumers, and reaching anyone anytime. Similarly, online luxury fashion marketplace Farfetch removed friction from discovery of the next authentic designer. Personalised sampling service Birchbox removed friction from exploration of the new beauty products, is another example.
Here are some useful starting points for innovation and growth:
1. Create a seamless path from inspiration to purchase: Smart luxury retailers like Net-a-Porter merge content and commerce, as well as digital and physical touchpoints, to create an innovative purchase path that firmly integrates points-of-sale with marketing. Net-a-Porter understands that the contemporary consumer demands a strong omnichannel approach where service, experience and products interact.
2. Make your brand narrative intuitive and immersive: Modern luxury is about conveying a lifestyle; it is about creating an overall experience that products are a part of. A strong brand narrative combined with technology, which has become signature of the Burberry brand, gives consumers attainable, “no purchase necessary” entry points into brand experience at every touchpoint and price point.
3. Enable consumers to feel privileged and participants: New luxury consumers gravitate toward brands that have a strong point of view, convincing beliefs and compelling values that they express with passion. Communities gather around an idea or cause — be it culture, arts, nature or a social good. Louis Vuitton puts artists at the forefront of the brand. So do Celine and Saint Laurent.
4. Know consumers deeply, to serve and reward them: A wealth of consumer data allows smart luxury brands to surprise and delight their customers via personalized offers based on their individual browsing and buying history. Increasingly sophisticated consumers demand excellence in all parts of their non-linear purchase funnel through increased seamlessness and convenience.
What is the future of your luxury? New consumers from millennials to Chinese, digital disruption of channels and business models, and changing attitudes to the very notion of luxury, are rapidly transforming the world of luxury brands. Every luxury brands needs to innovate, to seize the opportunities to reinvent and drive future growth. Or die. Explore more in Gamechangers
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