Over the long term, the luxury product consultants expect there to be a polarization of between West and China, with Europeans and Americans True-Luxury consumers being more likely to prefer brands that are understated and timeless, while the Chinese prefer luxury items with brand visibility and iconic patterns. A value that is common to all consumers, however, is the importance of sustainability
Consumers are also showing themselves to will be more appreciative of personalized attention both through online and offline channels, but a new shopping equation is emerging with the fast adoption of online shopping and the evolution of physical stores.
“Store 2.0 will look very different from now: they will focus on experience and service, they will have ‘hyper-localized’ assortment and they will upgrade their digital offering. Mono-brands store will have a new role to appeal consumers: they will probably be less in number, more immersive and more experiential, and a place for connection and sociality,” the report states.
STRUCTURAL CHANGES IN THE NEW BUSINESS ENVIRONMENT
These trends are contributing to redefine the meaning of luxury, the BCG/Altagamma report says, noting that brands that address the new challenges and opportunities without delay will be in a better position to navigate the new reality.
The crisis will result in structural changes in and in shifts in luxury consumer behavior and preferences. In the shorter term, consumers will buy less, but more locally and more selectively, while distribution will have to reset taking omnichannel economics into consideration.
“The shopping equation between online and offline is made possible by a solid omnichannel strategy,” the report notes. “Create an online connection that feel exclusive and beyond what non-luxury retailers offer. Shift from store to experience, trying new concepts such as store in store, test and try, brand storytelling and brand-related services. Leverage data and technology to make your consumers live a seamless omnichannel experience: invest in tech – Advanced Analytics and Artificial Intelligence – to create end to end consumer journeys.”
As they prepare for the post-COVID world, luxury brands need to reset, streamline and focus on five critical components of business, the report states. These are:
Over the long term, luxury product consultants expect there to be a polarization of between West and China, with the Chinese preferring luxury items with brand visibility.
The BCG/Atagamma luxury team suggest companies hire members of staff with an understanding and experience in using Artificial Intelligence.
SIX PRIORITIES FOR FUTURE SUCCESS
The BCG/Atagamma reports also suggests that brands would also need to invest in six priority areas to maximize success in the new market reality: