It has been being some years that the luxury market has seen decreasing growth margin.
Change with consumers evolutions
Ecommerce, Mcommerce, omnichannel experience are just some of the enemies that luxury retailers are trying to fight using what sets them apart as an industry : innovation and creativity. In a sector where brand identity, brand experience, storytelling are the primary selling points, luxury merchants face huge challenges when they have to offer those on line.
The challenge is not only the user experience of the shop on line, but also and above all the translation of the brand experience in the digital world or in the millenials world. Trying to find a solution a number of brands have opted for consolidation and acquiring. By both adding new brands to into larger holding companies and conglomerates and by reducing the variety of providers and suppliers, luxury brands create a more cost-effective and consistent quality of goods and the means by which they’re sold.
For example all the actions done by LVMH, like the partly acquisition of Rimowa or the sale of Donna Karan, or again the acquisition of Bulgari and the sale of share of De Beers, have shaken up a traditional sector creating a base for a solid and constant growth with economies of scales, synergies and consolidation of systems. Luxury brands furthermore are also reconsidering their local market delivering bespoke experiences for their local brand enthusiast and this also experiencing new technology in those areas which would be receptive to it.
Thinking about luxury digital retail
Some stores started offering first examples of Mirror Augmented Reality, the shopper is able to compare his or her silhouette on the mirror with other combination of dressing just touching different items on the mirror / screen that will be automatically put on the silhouette.
Many luxury brands are launching their own ecommerce site stepping forward in expansion toward online retail in luxury and is a sign that the brand wants to win more market share in fast-growing online sales of luxury goods. Nevertheless these brands are using also social media to leverage awareness and engagement. Gucci is a great example of a brand using new media to draw reinvigorated attention to itself through media snippets discussing how garments are made, the quality inherent in each piece, and by encouraging a new generation of fashion enthusiasts.
Hermès, too, have come out ahead in using the power of social media. Having developed apps (Silk Knots, a how-to guide for tying their scarves in different ways, and Tie Break, an app utilising images and media alongside collection information and aimed toward men) to encourage product and brand engagement, the business has managed to fuse new media with their traditional values.
New stores provide augmented reality
The future of luxury online appears to be one filled with experiential virtual technology and increasing the ways valued customers can meaningfully engage with not only products and collections, but also the brand itself. Probably in some years we will assist to a development of Virtual reality merged with Augmented reality stores to attract brand enthusiast in the brick and mortar shop which for that time will be a sort of Brand temple where to experience « theme soirée » and special brand expertise exhibitions, like for example Berluti did showing their shoes quality and craftsmanship .