Technology, disruption and the luxury market
Yolanda Regodón of Madrid’s IE Business School asked me to answer a few questions about technology trends and web use in the luxury market, and briefly quotes me in TheObjective in an article called “Chic clicks for a competitive edge.”
Here’s the complete Q&A we exchanged:
Q. How best should luxury brands prepare for the disruptive impact of technology?
A. Luxury brands have to do what everybody else is doing: employ people who understand and appreciate the changes in the technological environment. No company whose staff are anchored in the past, who don’t understand the changes that technology provoke, or who are still looking at how their long-standing clients are making purchasing decisions will be able to adapt to disruptive changes, however many books they read or whatever their consultants tell them.
It is essential to be close to disruption and to analyze it oneself. If your company is not able to attract people who like to be in the technological vanguard, or who hire them but then don’t allow them to express themselves or to act as a warning bell, then your company has a problem, because an already significant part of society enjoys being in the forefront of technological change. When you see a range of Hermès ties dedicated to geeks and technology, then you know that things are changing big time…
Q. How do you see the luxury sector preparing for the challenges and opportunities that three-dimensional printing are bringing?
A. For the moment, 3D printing is more a design tool or for creating prototypes quickly rather than for manufacturing as such. It is hard to imagine that many of the objects sold by the luxury brands, characterized by particular care in their manufacturing, will be made in layers with some homemade device, however much the materials and detailing improve. And even if that does happen, then that raises the question as to where and how value is generated, and to what extent that will allow for the high prices charged for such items. Seeing technology as a negative factor and a threat would be very worrying, because it would suppose taking the same attitude that the content industry has adopted, which has not exactly been a success.
Q. What do CEOs and CFOs need to know about how technological change and the social networks will impact their business and how they interact with their customers?
A. A CEO needs to be able to detect the trends that affect him or her, and if they present an opportunity, and that, in the current dynamic environment, means paying a lot of attention to what is going on. It means being not only being aware of technology in itself, but also of factors such as adoption, socio-demographics, and in general, everything related to technology. For example, luxury brand pens that have not brought out a tablet stylus, a phenomenon that has been around for some time now, and with a high level of adoption in the segment that overlaps with the user of luxury products, are showing that they are excessively traditional and are afraid to follow trends that are already fully consolidated. These types of ideas must, by necessity, emerge from the use and habitual contact with technology. The same is happening in communication: there is no way that a director will ever understand what the social networks can offer unless he or she experiences them directly and is aware of the latest trends regarding their development and use.
(En español, aquí)
