Business Transformation. How the luxury goods industry is changing in the digital age.
While the traditional concepts around luxury focus mainly on exclusivity, latest changes in the industry and the growth of e-commerce are generating a shift in the way consumers see luxury, where they no longer care for possessions as much as they value the experience. Luxury brands have already started to take advantage of the endless possibilities offered by the digital environment, and are trying to make sure that their brands and products are perceived as a total consumer experience.
This makes the concept of “worth of mouth” and the rise of social media influencers gain even more important when it comes to generating marketing strategies for the new generation of consumers. According to the Global Powers of Luxury Goods 2018 Report, published recently by Deloitte, Millennials and the Gen Z consumers are driving the growth of the luxury goods industry, shaping to be more than 40% of the market by 2025.
Unlike older generations, millennials and centennials are expecting to find their brands online, they want to interact on social media, they want to see the products “in action”, and when it comes to the purchasing decision, influencers play a major role. They have become a direct connection between a brand and the consumer, not only will they give reviews about a sponsored product, but they will portray the lifestyle and the life experiences that come with it.
All the big names in the industry are understanding and adapting to these changes, as the focus of their efforts has to move from objects to experiences, what makes their brands unique and how to connect emotionally with the consumers of the new generations.