The Future of Luxury Brands and Customer Experience
Luxury brands today face greater challenges than ever before. Some of these are the perennial challenges that always affect markets in unpredictable ways, such as currency fluctuations or geopolitical shifts. However, many of today’s challenges represent trends that will only grow stronger tomorrow, and stronger still in the coming year. The range and sophistication of digital touchpoints will only increase, as will consumers’ expectation of an omnichannel experience that unites them. Indeed, more and more of what consumers want from brands will be experiences, not products. These are not fads or historical accidents; they are structural changes that are reshaping the industry.
No one can know the future, and this is just a point of view, but by considering the trends and their implications, it is possible to attempt to make a few predictions. Luxury brands will survive, of course—the human desire for indulgence, exclusivity, sophistication, and status symbols will not vanish in ten years, or even a hundred. However, they will survive in a much-changed form.
We believe that the luxury brands of the future will exist within alliances, similar to those that have formed in the airline industry, or are being developed within groups such as LMVH and Kering. These alliances will enable brands to provide their clients with a broad range of experiences and products that amount to a lifestyle, with access managed through a membership system. Here is the evolution we imagine in the coming years.
Increasingly, affluent consumers already place a higher value on experiences rather than possessions. With the sharing economy already giving rise to businesses like Rent the Runway, younger consumers will see luxury goods as things to be used for a particular time, within a particular context, and then replaced. In this way, luxury brands are already beginning to be seen as providers of a particular lifestyle rather than products per se, and this trend will become stronger.
As consumers become less interested in buying products, luxury brands will increase the number of VIP events and experiences they offer their clients. Eventually, this will come to be managed via tiered membership systems, which will take the place of products themselves as emblems of exclusivity.
As members of a particular luxury alliance, consumers will no longer have to buy products (although some still will) and will instead be offered the option of temporarily using products from a range of brands. However, the main attractions of membership will be experiential: travel, fine dining, spas, and wellness centers. Products will play a supporting role designed to enhance and commemorate these experiences.
Sales advisors and store managers, who today focus primarily on making sales, will evolve into customer relationship managers. The best will ultimately become lifestyle managers, who act as curators for the luxury group’s offerings, tailoring the experiences and products on offer to the taste and interests of individual clients.
The number of luxury boutiques will decrease dramatically, and those that survive will transform into destinations in themselves, where clients go to meet with their lifestyle managers, share a meal, or even receive a spa treatment. These “stores” will communicate the brand’s values through a range of members-only events that will add a social dimension to the brand world.
Owner & CEO at Albatross Global Solutions