5 trends from the Luxury Summit 2016
The eighth edition of Luxury Summit, organized by Il Sole 24 Ore, took place in Milan last week. Luxury market overview, changes in consumer’s behavior, digital strategy, retail and multichannel, changes in the international landscape — these were the main topics of the meeting. Among the discussed issues, the central was the debate about the evolution of the physical store next to the necessity of having an “omnichannel” strategy, which integrates retail, wholesale, e-commerce and outlets.
Here are five trends from the Luxury Summit 2016:
1. China plays a role
After three years of decline, China is demonstrating the initial repatriation of spending on luxury goods of Chinese consumers. The further positive growth is expected. The study “True Luxury Consumers Behavior: from China to Chinese” by Boston Consulting Group explains the shopping behavior of the citizens of the Celestial Empire, including the effects of anti-corruption policies and the development of a middle class young digitized generation. The growth of the luxury market in the coming years is expected at a moderate rate (average annual rate of 3.2%), mainly driven by the growth of China and of Chinese consumers that will come to represent about 34% of consumption in 2020 driven by more than 40 million new consumers primarily the middle class.
2. Millennials evade luxury
The new challenge for luxury market is the millennials. The rise of online shopping and sharing economy changed the behavior of new consumers. The study confirms that millennials eschew Luxury Brands. They are not touched at all by brand names and seeking more sophisticated and personal staff. The “old-world luxury” charm is not working with them and brands have to be ready to face it and create a winning strategy for this target. The company’s previous approaches — shops, products, and communication should be redesigned to attract the younger generation. The new stories should be used.
3. From creative director to collective labor
Another important change in the industry — is the changeover of the role of creative director. Looks like the time when a famous-named creative director played the key role in the Fashion house is gone. The fashion is becoming very fast and needs a permanent innovation, upgrade, and refinement. The companies prefer not to stake on one personality but better to have a creative team that can manage numerous innovative projects in a speedy way. Diego Della Valle, the President, and CEO of TOD’S confirmed this trend and promised to present very soon the new TOD’s project prepared without creative director that left recently.
4. Attack of robots
The companies working in the luxury industry are in the research of new ways of communication with customers. It’s clear that today just adding a new retail space doesn’t bring to growth, as it used to be. Technology offering the new online marketplaces provides better channels of communication. What next? The robots! The first wave of robots is already taking over human jobs. It was announced that Apple supplier Foxconn replaces 60,000 humans with robots in China. And this is just the beginning. The possibilities of robots are enormous. And in the nearest future companies will definitely use them to attract customers and improve the shopping experience
5. Domestic markets comeback
Despite global growth remains moderate and tourist numbers are down, the luxury market expects positive growth in Europe. It is mainly driven by local consumption. This trend also confirms Sabina Belli, CEO of Pomellato. According to Ms. Belli during last years luxury brands were mostly focused on international sales, conquering foreign markets and customers with their cultural diversity. Now it’s time to return to the roots — pay attention on the domestic markets. Local customers used to play an important role in the history of the brand’s development and were loyal for many years. They should be paid back by attention and dedicated attitude.