In our previous blog, Team Luxeveda outlined the growth trajectory of the luxury industry, and briefly described some of the dominant trends to look out for in the next few years. Most noteworthy is the change of luxury lifestyle, with consumers choosing to invest in experiences instead of products. Indeed, businesses have taken a cue from this, with luxury brands now focusing on selling products that tell a story. Building a narrative around luxury buying has become an important part of branding.
Another important trend that is shaping how luxury brands position themselves is sustainable marketing. Consumers today choose to align themselves with brands that portray positive values. Given the nature of the climate crisis, customers would like to buy from brands that follow sustainable business practices.
In this article, Team Luxeveda expands on the aforementioned trends in the luxury industry, while exploring a few more. This article will prepare you to tackle the issue of luxury buying and sustainable marketing, and give you insight into the new emerging luxury lifestyle.
CURATING VALUE-LED LUXURY EXPERIENCES:
Luxury buying has seen an evolution from customers investing in experiences instead of products. Ideally, these experiences must also make a positive impact in the world. That is, customers now see the luxury lifestyle as purchasing from brands that spread a positive message.
Luxury brands will have to create narratives around their business to garner attention and loyalty. Grounded in authenticity, these stories should inspire both consumers and competition to live more consciously. Instead of a competition mindset, these stories should trigger sentimentality amongst a distributed consumer base. This emphasis on value-led experiences will create new opportunities to engage with affluent consumers by sharing meaningful stories.
For example, the flagship store of Nordstrom is providing a blend of technology, innovation and luxury experience through dedicated kiosks. Store associates are trained and empowered to augment customers’ experience. Similarly, Sephora is providing free beauty workshops, so that customers can walk away with something more than just products.
NARRATIVISING LUXURY BRANDS:
Luxury brands will begin to focus on narratives of timelessness and longevity, with an emphasis on craftsmanship and attention to detail. In many ways, 2020 paved the way for the development of luxury brands. 2020 simply accelerated what was already happening— a shift in the kind of luxury lifestyle people wanted to live. More than glitz and glamour, luxury had already begun to become more understated and rooted in story-telling; each luxury piece had its own unique story, so owning it meant you were the owner of that story.
As the market progresses, luxury brands must lean in and transform themselves from a brand-centric model to a more transparent, engaging and customer-centric business. Indeed, affluent consumers are looking more to invest in better luxury goods and relevant experiences, than own many things. Luxury buying is now categorised by customers who are willing to spend a premium for the very best version of luxuries. Luxury is more than just answering a need, but serve a real purpose and create added value in their lives.
CREATING NEW SUSTAINABLE BUSINESS MODELS:
With consumers placing importance on sustainable business practices, luxury brands have to innovate and evolve to meet their customers’ needs. While digital transformation is an obvious choice, a necessity even, physical stores will continue to be important for luxury buying. One such evolution in this space is the zero-inventory store (ZIS). ZIS aims to make physical stores a platform where shoppers can see and experience products while placing orders online. Since such a store format requires less inventory by definition, it would mean huge savings on rental costs. Apart from enhancing the digital experience, it would generate more demand by tapping into a new user base. This will have an impact on age-old retailers, who will have to find alternatives to survive in this evolving market landscape.
However, sustainable marketing includes more than just concept-stores. Sustainable business practices need to be implemented across all stages of the supply chain. It is due to this that blockchain technology is gaining popularity; since the blockchain can track an entire supply chain and ensure transparency, luxury brands can leverage it to be more authentic to their customers.
The luxury industry is evolving rapidly, and luxury brands need to keep up if they want to remain relevant. While tradition and brand name are important, they can only take you so far; 2020 has presented an opportunity for new luxury brands to grow, given they understand the market trends. With luxury lifestyle meaning that consumers are more interested in sustainable business, it is only a matter of time before individual brands take it seriously.
If you are a luxury brand looking to leverage the current market trends, contact Luxeveda, domain experts in luxury marketing.