5 Trends That Disrupt Luxury (And Brands Need To Act Fast To Survive)
Luxury is disrupted and companies need to become more agile if they want to survive in the new reality. This was a common thread among the presentations and discussions at the Salon Du Luxe 2017 in Paris. And it is an insight that we can confirm discussing with many luxury brands around the world. We identified 5 trends that will be critical for companies to master if they want to survive the tectonic shifts that impact the luxury industry. Équité helps luxury brands to master those challenges, become more agile, competitive, innovative and profitable.
Trend #1: Dichotomy between short and long term
The focus of many luxury brands today is on the long-term. With little to no innovation and many re-interpretations of a luxury brand’s heritage. This business model is not longer sustainable. Agility and re-invention are needed. Because consumers seek ultimately the immaterial versus the material. They look for experiences. And offers that are fitting to their life now. It’s a paradigm-shift in luxury.
Trend #2: Dilemma of ethical shopping
Everyone in the luxury industry talks about the importance of sustainability. But let’s face it, ethical shopping is complicated. From a consumer perspective it’s extremely hard to make truly sustainable choices and have the transparency that the product is really crafted with highest standards. And for companies it’s hard to fulfill their promises and provide more than just lip service. True sustainable solutions provide a chance to disrupt markets and price for it.
Trend #3: Hacking luxury
Hacking business models has become the buzzword in the startup scene. Hacking luxury is both – opportunity and risk for luxury brands. What does hacking luxury mean? It's about understanding what a product really is and providing a new and different, more convenient and exciting approach. A self-driving car is providing a chauffeured car service at any time. And no luxury car company understood it. And now their business model is hacked and may become obsolete.
Trend #4: Outsiders disrupt luxury’s status quo
Because incumbents are rarely those who reinvent a business, luxury is disrupted by newcomers. Apple now de-throned Rolex with the Apple Watch and changes the expectations of consumers towards the retail experience. Traditional luxury firms need to completely rethink their approach.
Trend #5: Share of engagement and attention
Luxury is different for everybody. But ultimately it is about a unique and memorable experience. A life experience. An emotion. The realization of a dream. In a past study I showed that luxury signals to the owner – and to others – opportunities of life. Things to break out of the daily routine. About opening yourself up. About access to beautiful things, to art, to culture. To the perception of adventure. Creating a memory. Luxury companies need to shift their focus from volume thinking to share of engagement and attention.