Deloitte, a private UK company limited by guarantee, has released its 2nd annual “Global Powers of Luxury Goods” report, that provides an outlook on the global economy; an analysis of merger and acquisition activity in the luxury sector; and a forward look on the changing nature of the luxury consumer.
We recommend giving the report a once over, if you can make the time. One of the major findings in the report that caught our attention was the observation that luxury consumers are increasingly becoming digitally savvy, time-sensitive, and socially aware. The report suggests that to keep up with this change the luxury industry should “continue to forge a strong relationship with an ever-increasing array of technologies”.
Sure, the luxury industry of yesteryear, relied mostly on the luxury brand’s commitment to its history, provenance, and community – all of which kept most of the brands rooted in tried and tested methods of engaging the consumer, mostly through the traditional means of print and broadcast media. Another fact that the report pointed out was that today’s digitally savvy consumers are mostly millennials. The report suggests that 58 percent of millennials currently go online to search for information on luxury items and 31 percent use social media for gathering information around discounts and promotions, compared with 10 percent for older luxury consumers.
Moreover, the channels through which consumers educate themselves and shop are evolving. Results from Deloitte’s “Luxury Consumption among European High Earners 2014” survey of over 1,000 high-income earners across Europe illustrate that while traditional marketing channels such as magazines and store browsing continue to be relevant for consumers gathering information on new luxury brands, 45 percent of participants indicated that they search online for information. This should not come as a surprise for those of you reading this…you are online right now and you’re essentially a part of this 45 percent. As are we.
“Several key aspects of the luxury sector will be unrecognizable in the next few years. The traveling luxury consumer will change the concept of national boundaries; millennial consumers will represent a significant percentage of sales volume in luxury; and the competitive forces driven by technology will continue to disrupt at a faster pace. As such, global luxury brands must overcome significant challenges in order to maximize engagement with their digitally-savvy, time-sensitive and socially aware consumers or risk being left behind.” commented Patrizia Arienti, DTTL EMEA Fashion and Luxury leader.
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