Major challenges luxury brands are facing and potential solutions Takeshi Kubota Net sales in the luxury industry have continued to rise in the years since the 2008 financial crisis. However, there are still several challenges luxury brands need to overcome in order to maintain or increase current growth trends. In my opinion, luxury brands being able to offer personalized experiences to customers using technologies and still maintain their traditions is one of the biggest challenges. Traditionally for luxury brands, the only way to connect with customers has been through in-store sales.
However, luxury brands have started to notice that combining online and offline shopping seamlessly is important. Increasingly, the main customers of luxury brands are the millennials, who are called digital natives. Their lifestyles are more diverse and driven by technologies, such as smartphones and computers. According to research by Deloitte Tohmatsu Consulting, 42% of millennials buy luxury items via online devices and 45% prefer personalized products and more shopping channels.
In other words, they are seeking the same convenience and flexibility from luxury brands that they have become accustomed to in their purchases of all other goods and services, thanks to providers like Amazon, Uber and Apple Pay.
It is important for luxury brands to accommodate these changing customer expectations. At the same time, they cannot forget to maintain their core values, like attentive customer services at the store and high-quality Writing Sample by Takeshi Kubota craftsmanship.
Integrating technology is more urgent for luxury brands compared with fast fashion brands because luxury brand customers are much more discerning consumers.
That is why luxury brands should consider using existing platforms such as Farfetch, an online marketplace allowing people to buy luxury clothes or accessories. London-based luxury retailer Brown, along with luxury brands Chanel and Thom Browne, are already using Farfetch to offer personalized customer services at the store. These services include an in-store wish list to let store staff know customers’ past purchased items, interactive fitting rooms to suggest appropriate items and sizes and digital check-in. Kristina D (n.d.). How Farfetch imagines the store of the future?
Furthermore, Gucci opened a new store called “Gucci Wooster” at So-Ho in May 2018. Here, customers can enjoy not only the latest collections but also access a DIY program to check items in advance using Augmented Reality.
Both examples are similar in terms of flexibility and incorporating technology so customers can reflect each preference in their shopping. I believe that more luxury brands should incorporate similar technological enhancements both in-store and online in order to build and maintain brand loyalty with an increasingly tech savvy consumer base. At the same time, luxury brands should never sacrifice on authenticity or transparency in the pursuit of technology. Luxury brands do not follow trends. They create trends through their core competences, such as Hermes’ unparalleled craftsmanship and Stella McCartney’s rigorous sustainability. Brands should not be influenced excessively by technologies or Writing Sample by Takeshi Kubota customer preference because many customers still think heritage is one of the most important factors for luxury brands. What is important is to balance tradition and innovation. Thus, while adapting to customers’ preferences is becoming a key factor for luxury brands, they should always maintain their core values.