The luxury industry is a continually growing market located at the top of the scale, focusing on products and services that are not necessary, but pleasant and satisfying to possess. And it's indeed increasing. In 2019 the luxury industry reached an estimated $1.4 trillion in growth globally.
Most of the products are being commoditized by technology while luxury brands are focusing on what goes beyond the product and services themselves. High-end consumers aren't buying just a high-quality product or service anymore; they are buying from brands that represent their lifestyle and values.
It's about relevance.
Not too far in the future, we will be able to design and print our own sneakers. Or maybe we will sign up for a subscription service that will deliver it to our homes. The things that we wear today will become "stuff" soon. Or just like Miranda Priestly* would say, something that we pulled out of a pile of stuff. The world is being commoditized and utilitized.
To offer more pleasant and satisfying experiences, luxury brands are redefining their purpose and relevance to customers and to society in general.
But shouldn't every major brand be doing the same?
Yes. There's a new playbook written by luxury brands that every brand wanting to remain relevant today should start taking notes from.
It begins by understanding that legacy is a value from the past.
Legacy brands that are betting on their history and longevity but aren't relevant to the modern cultural context are deemed to become irrelevant by yesterday.
Inclusivity, diversity, and sustainability are not just for show.
Actually, scratch that. It is for show.
Brands must show genuine commitment and purpose to have a positive impact on society.
Prada appointed as joint heads of the brand's Advisory Committee, the artist and activist Theaster Gates, and producer/director Ava DuVernay; LVMH has recently signed up to the worldwide code of conduct battling discrimination against the LGBTQ community in the workplace; Gucci formed a Changemakers Council aiming to make a lasting social impact; Rolex partnered with National Geographic to promote exploration and conservation.
Evidence that luxury brands are addressing culturally and socially relevant topics are everywhere. Still, they are also starting to realize that they became cultural objects themselves. Millennials and Generation Z have grown up in a world of borderless connections, and they are the most racially and sexually diverse generations in history. In tune with all that is going on, Louis Vuitton appointed Virgil Abloh, founder of Off-White, as the brand's artistic director. Not only the black designer in charge of a world luxury giant, he is also a Millenial.
Data. Do we still need to talk about data today?
Data is such a 2010s topic, but Data Privacy is more current than ever. To create better experiences, brands will need to draw data from all customer's touchpoints. Legislations, like GDPR and CCPA, are being enacted globally, reaffirming the need for brands to think carefully about privacy when managing their consumers' data today.
Managing customers' data is a matter of transparency and trust.
Losing trust can quickly become the decisive death blow on a brand's value and reputation. We have been witnessing it happening in real-time with some of the most influential brands in the world.
But if consumers value their privacy, they also love personalization.
Social platforms offer valuable behavioral data to enable more personalized experiences, which creates an opportunity for brands to develop more custom-centric and authentic engagement.
Beyond phygital.
Just like data, tech-driven is such a last season topic. Still, gaming, experiential, AI, immersive, and personalization - all data & tech-related topics - are very much on-trend.
Chanel launched a gamified store experience in China; skincare brand SK-II's utilizes state-of-the-art facial recognition; Gucci created an interactive Book of Gifts including its own emojis; Jaguar Land Rover partnered with IBM to launch a new in-store virtual reality screen; Virgin opened an immersive cabin test-run store installation; Rag & Bone created an AI-driven experience to create a video for its Fall/Winter collection launching.
There are many other examples of how luxury brands are pushing the envelope on innovative brand experiences. Storytelling, branded content, social media, and collaborations are amplifying the brand's ethos. Beyond rethinking how they show up both in the digital and physical space, modern brands are creating omnichannel seamless experiences that are more authentic, purposeful, and relevant.
Leading luxury brands are adapting themselves to constant societal changes without losing their core values.
Just like every modern brand should.
Did you get that?
*Anna Wintour’s inspired character in the film Devil Wears Prada.