Over the past 10 years there has been an explosion of wealth and spending across emerging markets causing the luxury market to grow beyond recognition.
As with any boom period, new developments have challenged traditional market norms and meant that luxury brands are faced with adjusting and adapting to new frameworks.
Luxury items and brands have become increasingly obtainable to a mass market, decreasing the exclusivity of luxury ownership and in turn associated aspirational value. Developments such as this must surely be one of the motivating factors behind Louis Vuitton’s recent decision to invest in a new ‘hyper luxury’ line of accessories.
To tackle this issue whilst keeping the mass market as a consumer, a new report by Seymour Sloan, Luxury 2020: Three Future Trends Reshaping The Luxury Market, has investigated what luxury brands can do tackle this conundrum.
Looking To The Future
The buoyant market of the last 7 years has seen access to luxury brands broaden and as a result consumer tastes in luxury are evolving. According to the study, the luxury market in 2020 will be defined by 3 main themes; desire for exclusivity, stylish individualism, and poly-cultural luxury. The following trends seek to redress the balance that luxury brands must re-establish if it’s to tackle the recent market slow down:
- Brand ubiquity – the “wow” factor has disappeared from luxury brands due to greater exposure. Louis Vuitton is a great example of an established luxury brand that was previously only affordable to an affluent consumer base yet the infamously branded LV bags and accessories are a common sight.
- Harmonised experience – the luxury purchasing experience has coalesced, or in the words of a consumer, become “generic”.
- Lack of local identity – many customers feel they are buying into a culture that is not theirs, creating a distance between them and the brand product. Many consumers prefer to have a cultural or social connection, especially if they are required to spend a large amount of money on it.
Individualism and consumer customisation are areas luxury brands will be looking to exploit more and more in future. As discussed earlier, wider access to the luxury market has somewhat diminished the exclusivity of luxury products, one powerful remedy to this situation is the increased use of customisation. Through customisation consumers will be able to put a personal stamp on the product, providing it with a uniqueness relevant only to them.
Poly-cultural luxury is another area set to rise in coming years. Seymour Sloan predict an increase in designers from emerging markets in leading roles within established brands and the emergence of home-grown luxury brands within emerging markets. Not only will this provide a new creative outlook on luxury design due to the cultural differences, but will also provide greater local identity to consumers within emerging markets making them feel closer to their preferred brands.
The Way Forward
The businesses that can support a large degree of individualism in its products will prove the winner in the high-end luxury segment. There will be a need for increased clarity around problem/opportunity identification and assessment, particularly around driving innovation. The report highlights the need for successful brands to possess true diversity in their branding approach and the organisational agility to react to a changing market. Agile brands ready and prepared for the changes to come will be best placed for success in the future.