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. 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. For anyone involved in luxury retail, the following ten trends should be on their radar, according to integrated agency group Havas Media:
Trivergence of Retail
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. Also, entertainment is key as experience, lifestyle and theatre drive the physical retail experience, while content will create pleasure in digital retail.
Hunt for New Customers
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.
Power of Travel
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.
Polarisation of Luxury
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.
Editorial’s Retail Reinvention
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.
The menswear market is extremely bullish, growing at 1.5 times versus womenswear. While 35+ male consumers still dominate, the millennial generation drives retail spending through its modern aesthetic and digital knowledge. To which, many womenswear brands are either launching or revamping their menswear offering.
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.
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.
While those 35+ still command some 83% of luxury spend, the fresh aesthetic, playful approach and digital propensities of the Millennial generation are driving retail culture. Furthermore, Millennials are approaching their entry point into the 35+ luxury heartland.
Show I Know
Show I know, is growing old and the focus will turn away from the outward display of luxury to an inner satisfaction of how it makes one feel. The creation of personal experiences is essential as luxury consumers shift the focus to indulging in personal reward.
Tammy Smulders, Managing Partner and Global Executive Director, Havas LuxHub comments:
“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.”