The Future of Luxury? Personalization!

Lavanya Mohan
May 22 · 4 min read

In November 2018, Management Consulting Group Bain released the 17th edition of their annual luxury study. Among the many findings that were reported, perhaps the most standout piece of data was that the bulk of Chinese luxury consumers — 58% — were from Tier II cities and below. Luxury consumers from the Top 4 cities — Beijing, Shanghai, Guangzhou and Shenzhen, only accounted for 20% of total consumers.

The above statistic makes it evident that the modern luxury consumer cannot be mapped to a certain part of the world, a certain part of society or even a certain age — every customer is their own segment.

The bulk of Chinese luxury customers are from Tier II cities.

Experience Over Everything

Did you know that Hermes is the fastest growing brand among millennials? Their Birkin bags, whose prices start that the upwards of $12,000 are notoriously difficult to purchase. The artificial scarcity that the brand has created has a powerful effect on its customers who bend over backwards to buy it. “How I Got My Birkin” is a popular feature that crops up often across fashion blogs and even mainstream news portals. Some of the stories are completely crazy — people have flown to Vegas just to purchase this bag — and the more you read, the more obvious it becomes that the reason younger customers are queuing up to buy a Birkin isn’t as much about the bag as it is about the story and experience that is attached to the bag.

74% of Americans prefer experiences over products. This stunning statistic is proof that the rise of experiential retail across the world isn’t merely a consequence of “millennial” behaviour — it is a paradigm shift across generations, caused primarily by all the ways social media has pervaded our lives. People would rather spend on an experience that they can share with their friends over a material object.

The Power of Personalization

Until very recently, personalization in luxury meant the slow and difficult process of ordering handbags in your preference of leather and hardware or adding your initials on to an existing product as a monogram.

But this is not the case any longer. If the luxury segment is to woo the new-age consumer, they’ve to focus on personalized experience. After all, luxury retail’s chief differentiator has always been the in-store boutique experience and their intense clienteling. When you walk into a boutique, you are allocated a Sales Assistant whose job is to make you feel like you’re the most important person in the world. As you keep purchasing from the brand, your Sales Assistant will start recommending products that they know you’ll love and ensure that you forge a longlasting relationship with the brand.

Today, however, mass-market fashion brands are tapping into user data and are using Artificial Intelligence that extrapolates purchasing patterns to power personalized recommendations online, thus providing their customers with a tailor-made shopping experience that was once exclusive to the luxury sector.

If luxury brands are to differentiate themselves, they’ve to take advantage of their superior clienteling and invest in technology that allows them to fuse customer data with customer service to create truly singular shopping experiences.

The Future of Luxury

The future of luxury isn’t merely about Sales Assistants across the world knowing your colour preferences, your favourite style or even your choice of beverage — because if you’re a luxury customer, chances are that they already have that data. The future of luxury is about placing the customer in the centre of the manufacturing and design process.

In my vision of luxury’s future, I see entire product lines that are made exclusively for certain geographies after taking into consideration their design preferences, culture and climate. I see made-to-order bags going from a furtive process that requires established relationships to becoming a feature on the website. I see online chatbots that are as helpful, well-informed and charming as the boutique sales assistants are.

I see luxury.


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Lavanya Mohan

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Fashion and Retail Enthusiast. I handle growth and partnerships at