Seven trends to shape the luxury industry in 2019

The fashion and luxury industries are evolving at a faster rate than ever before, with key trends set to shape the industry in 2019.

Compiled by the Luxury Institute’s global consulting unit Global Luxury Expert Network (GLEN), seven trends have been identified to help brands stay ahead of the competition.

Alpha Growth

With Gucci as a benchmark, many brands hope to achieve its double digit increases since CEO Marco Bizzarri took the helm and appointed Alessandro Michele. According to GLEN, Gucci saw consistent growth over three years, proving that alpha growth is a skill, not luck.

Such growth can be achieved by executing three bold moves, according to Luxury Institute CEO Milton Pedraza. The first is to conduct an honest analysis to confront any realities that may hinder performance. The second is to extend the enterprise outward into new territories to collaborate with consumers, influencers, charities, artists and other members of the brand’s global ecosystem. The third move is to leverage technology, data, analytics, and A.I. to communicate the brand’s story and engage in open dialogue with the entire ecosystem.

Legacy luxury brands re-examine the value of brand heritage and history

Brand heritage and history are not the key factors that they used to be. Luxury brands used to be able to boast that they had been established over a hundred years ago, and beyond. That legacy earned a brand premium status and premium pricing over less pedigreed offerings. Today, Millennials, Generation-X, and even Boomers, see brand heritage as a far less valuable luxury brand attribute.

The new luxury goes beyond luxury

While fashion luxury goods and accessories categories capture all the headlines today, new and innovative categories of the future are emerging far beyond the noise. Luxury Institute research and new client requests indicate that innovative start-ups are vying to capture the imaginations of the wealthy.

Research that the Luxury Institute has conducted with billionaires through its Global Luxury Expert Network (GLEN) finds that the wealthiest consumers are intrigued by new categories of luxury such as life extension biotechnology, hyper-experiential home virtual reality devices, neuro-scientific performance enhancers, health care robotics, and a multitude of travel experiences that defy gravity. Wealthy individuals are no longer impressed by what they view as mundane luxury goods and services.

Luxury begins to pivot from product innovation to people innovation

The luxury goods and services industry historically has invested heavily in product development. Major brands are now pouring billions into data, analytics, A.I. and other technology innovations in an effort to remain relevant.

Brands such as Moda Operandi, Fusion Academy, and Hello Alfred are leading the way in re- humanizing luxury across several goods and services categories. In 2019, look for luxury brands with enlightened leaders to see technology for the commodity that it is, and begin investing in people innovation, realizing, at last, that it is, by far, the biggest ROI opportunity in luxury in the age of A.I.

Affluent consumers continue to lose trust in Facebook and other social media brands

In the Luxury Institute’s 2018 Emotionally Intelligent Brand Index survey on technology brands, Facebook was rated lowest for emotional intelligence, according to affluent consumers. One in five affluent consumers report actively discouraging friends, family or other people they care about from using Facebook.

The local luxury consumer-to-consumer sales channel takes off

Most luxury goods and services brands think of their distribution channel options as comprised of three choices. They can go the wholesale/third party approach, develop their own retail/sale force channel, or they can sell via e-commerce. Now, new simple, effective app technologies are facilitating the development of the fourth channel, a network of devoted brand customers who become local influencers and sell directly to friends and family through apps that connect to the brand’s website. This approach, within ethical boundaries, is far more personal and effective than using celebrity influencers who are being perceived more, and more, like mercenaries, who buy fake followers, and are not true brand users or advocates. Look for this consumer-to-consumer channel to emerge rapidly in several luxury goods and services categories in 2019.

From omnichannel luxury to omni-personal luxury

Today, customer segments and channels have become the standard and easy way for luxury brands and their partners to attempt to categorize and interact with consumers.

Unfortunately, the current customer interaction efforts are executed with the static mind of a software engineer instead of the mind of a wonderfully complex human being. Customers, especially Millennials, who understand what technology enhanced with emotional intelligence can do, think in terms of individualized, seamless brand relationships akin to the relationships they have with friends and family members.

Photo credit: The Luxury Institute website; Article source: Global Luxury Expert Network (GLEN) whitepaper