Over the next three to five years, the luxury retail scene will be driven by a number of key trends aimed at satisfying consumer needs, fuelling spending and luring new clients.
(Read also: A new age for luxury marketing)
Staying ahead of the game implies plotting a series of points, from customising online purchases to exploring new markets, from tapping into the booming men's wear industry to riding the changing media system.
LuxHub, a luxury consulting boutique owned by Havas Media, has gathered five key trends in global retail for 2015 in this video:
The video goes with LuxHub's inaugural report on global retail trends in luxury. Here are eight key takeouts from the report:
1. Retail will move in three different directions to service the needs of luxury consumers. The digital channel will drive research and stocking up on favourite products, while brick-and-mortar stores will reach out to their clients through customised offerings such as express counters, “top 10 product” style kiosks and assisted shopping services. Lastly, entertainment is key as experience, lifestyle and theatre drive the physical retail experience, while content will create pleasure in digital retail.
2. Given the ongoing softness in Europe and slowdowns in Russia and China, looking into new geographical areas such as Africa is rapidly becoming an alternative. While fashion brands including Zegna, MAC and Hugo Boss have recently opened stores in Lagos, Nigeria, the new luxury hotspot, online retailers are now shipping to Africa, and are starting to focus marketing efforts on this region.
3. Especially in Europe, luxury brands are increasingly relying on international travel and tourism to fuel sales, primarily from China, Russia, the Middle East, USA and now Africa. Tourists purportedly account for 55% of luxury sales in the UK, 60% France and 50% in Italy.
4. While in the past luxury brands attempted to offer multiple price-points, brand confusion and erosion of luxury credentials was often the outcome. Now, luxury is being pulled in two opposite directions, and brands will need to choose sides: accessible or Ultra-Luxe.
5. Media wise, magazines, newspapers and TV will become the new digital storefront reinventing themselves to allow customers to buy their favourite items, looks or beauty products straight off the editorial pages.
6. The men's wear market is extremely bullish, growing at 1.5 times vs. womenswear. While 35-plus male consumers still dominate, the millennial generation drives retail spending through its modern aesthetic and digital knowledge. To which, many women's wear brands are either launching or revamping their men's wear offering.
7. The openness of digital platforms dictates that to make luxury customers feel special, brands need to get personal. The rapid rise of Instagram, live streaming, and behind the scenes footage will leave consumers feeling like they’ve already experienced everything. Brands are now challenged with creating truly personal, fresh, and meaningful experiences.
8. Luxury brands will increasingly become media channels, creating content that is far richer than today's aspirational blogs, videos and magazines. Retailers will offer multiple channels with high-quality and entertaining shoppable content updated on an hourly basis.
Isabelle Harvie-Watt, Global CEO LuxHub said: “The implications for a marketing standpoint, among other things, are that luxury brands need to promote one-on-one communication and experiential events to encourage store visits, focus on mobile technology and devices for tourists shopping abroad and keep an eye on the influential millennial generation.
"Moreover, they are challenged by the digital world's openness so they should focus on personalised access and content to convey a sense of exclusiveness. Lastly, despite the growth in men's wear spending, it is important to know that men still prefer to be targeted in non-fashion contexts – news, lifestyle and professional environments.”
Tammy Smulders, Global Executive Director and Head of Research & Insights LuxHub added: "These trends show us the incredible diversity of new opportunities for luxury brands to extend their relevance to new customers as well as enhancing their relationships with loyal brand fans.
"From reaching emerging customer groups to creating market to customised content strategies, our media implications will enable brands to develop new strategic and tactical initiatives to drive sales."