The Creation and luxury center unveiled an unprecedented survey of 354 luxury professionals at the 2019 Luxury Summit held on February 5 on the theme of the Fabrique de l’émotion. Analysis.
Luxury companies have every interest in paying particular attention to the emotions that are increasingly at the heart of the desirability and purchase of its products and services. Based on beauty, the feeling of exclusivity, and often the rarity of the object or service, this emotion has now become the driving force behind the “added life” that luxury provides to those who experience it. But what are the challenges that luxury will have to face in 2019 to achieve its objectives for consumers? Explanations.
A sector in full transformation
77% of luxury professionals believe that 2018 was a challenging year with a changing context (62%). It was also the year in which digitisation is as important as creativity for luxury: 62% believe that “digitised” is one of the terms that describe their feeling towards the market.
The winners in luxury are and will be those who will take into account digital issues (Internet, and e-commerce) head-on, without giving in to creativity.
We have seen this at Gucci, for example, which has been able to adapt to the context in recent years and the results are there. On the other hand, Dolce and Gabbana made a communication error in China that cost her a lot of money.
71% of luxury professionals believe that the factor that will have the most influence on luxury purchases will be the consumers’ profile. It is not their consumption patterns, which have changed and will have an impact in the years to come, it is the very nature of customers. Between the Millenials and Generation Z, luxury professionals are fully aware that their future customers do not look like their elders. This will fundamentally change the luxury trade in 2019.
If it used to be possible to establish socio-demographic profiles of consumers, the task is now more difficult. Indeed, the customer is plural and the desire for luxury extends all over the world to all social strata. The culture of social networks and selfie, especially for the youngest generations, has made it essential to build a public and idealized life. As a result, the desire to stand out, especially through luxury, has never been stronger, leading to an exponential increase in the profiles of customers dreaming of buying luxury.
The second factor, which is perceived as having the greatest influence on purchasing, is related to changes in customer expectations: now the customer wants everything, right away, everywhere. The desire for personalization, immediacy and accessibility has become very strong. Today, they represent major challenges for an economy that advocates a certain slowness due to handmade products and that has always existed through the aura of its inaccessibility.
The challenges of 2019
The study identified three areas for improvement in 2019. First of all, there is CSR. 73% of luxury professionals believe that it is the environmental and social challenges that will have the greatest impact in 2019.
Ethical commitment has become essential: professionals are acutely aware of this and perceive that they can no longer do without a sustainable development strategy, which is the basis for ethical commitment, because customers are particularly attentive to it.
2018 will have been marked by the gradual introduction of the abandonment of animal fur by a growing number of Houses, while at the end of 2017 LVMH and Kering signed the charter on labour relations and the well-being of models. Beyond communicating, luxury must now take concrete action to demonstrate its exemplarity. The required excellence must be demonstrated throughout the value chain: it has become unbearable for consumers to imagine that the product of their dreams is not manufactured with a level of ethical requirement at least equal to their aesthetic requirement. And it is also a requirement of luxury employees, as our survey shows.
67% expect that the rise of digital technology will also have a strong impact. If digital is in second place, it is because it is one of the fundamental growth drivers of luxury. The recent partnerships signed with Alibaba and JD.com to develop a strong presence in China will necessarily fundamentally change the luxury market in 2019.
62% are concerned about geopolitical instability and its consequences on tourism. Impacted by global terrorist attacks and the Chinese economic slowdown, professionals are concerned about anything that could prevent their clients from travelling. This is a significant barrier to the sale of products and services.
Geopolitical stability, growth in digital sales and CSR issues are thus perceived as the major challenges of 2019 for luxury, a market that must constantly renew its customers’ desire and therefore their emotions to continue to see its business grow.