Impact of C19: luxury goods
market growth 2019-2020
(BCG Altagamma 2020)
Luxury goods market
(BCG Altagamma 2020)
The future of luxury: customer-centric, sustainable and hyper-personnalised
Luxury buyers are evolving: while young generations (Millennials and GenZ) only represented 38% of the luxury market in 2018, they are expected to represent 58% of the market by 2025. Luxury players must adapt to their consumption habits and needs with a customer-centric approach. Surrounded by new communication channels, young luxury buyers are now expecting brands to adopt an omnichannel strategy. They also want brands to have a 360° sustainable approach while maintening high-end brand experience standards, such as customisation options.
Reshaping the customer experience
Even though online luxury sales are gaining market shares, the importance of the physical store remains stable. Luxury brands are thus developing omnichannel strategies, entailing the digitalization of the consumer's journey as well as new in-store digital experiences. Many of these initiatives are developed in collaboration with startups
Facing health and environmental crises, consumers are questioning brand practices. 88% of UK and US consumers would like brands to help them be more environmentally friendly in their daily life. Yet, for 43% of them, brands make it harder for them to adopt a sustainable lifestyle. Pushed by consumer demand and new regulations, luxury brands are refining their operations with sustainability in mind. Startups are responding to this by developing new raw materials and innovative recycling methods. Sustainable fashion is the main focus for startups: from turning food waste into sustainable clothing to developing green delivery services. Millennials will drive the sustainable fashion trend, especially as they are willing to pay a premium for sustainable products.
Consumers will also expect to have a more privileged dialogue with luxury brands and have access to a customised experience. First, luxury brands can adopt a mass-personalisation strategy: one product that is presented differently to consumers based on their preferences. To do so, luxury players can leverage startup solutions to gather consumer data and inform hyper-targeted marketing actions.
Luxury brands can also adopt a mass-customisation approach: consumers are offered limited customisation options (colors, textures, shapes, etc). For instance, brands can use 3D simulations to help consumers create their unique products.
Partnering with innovative startups to offer a high-end sustainable experience
Most of the trends mentioned above are must-haves for brands, especially for the ones targeting young generations of customers such as Millennials and GenZ. Moreover, Covid-19 has accelerated the need to implement such solutions.
This is why leveraging existing innovative solutions, developed by startups, will give you a competitive advantage.
Early Metrics has a strong track record with corporate innovation teams in the luxury industry. We can help you navigate the ecosystem to find the best solutions to offer a customised, digital and sustainable experience to your customersView our solutions