MONACO: Global luxury brands must take advantage of evolving technological and consumer demands if they are to boost profits and remain competitive, according to a new study.
Deloitte's second annual Global Powers of Luxury Goods report analysed the global economy and merger and acquisition activity in the luxury sector as well as taking a forward look at the impact of technology.
"Several key aspects of the luxury sector will be unrecognisable in the next few years," according to Patrizia Arienti, EMEA fashion and luxury leader at Deloitte.
"The travelling luxury consumer will change the concept of national boundaries; millennial consumers will represent a significant percentage of sales volume in luxury; and the competitive forces driven by technology will continue to disrupt at a faster pace."
Luxury brands will have to find a path between keeping up with evolving technology and refining their products while at the same time not detracting from their core product offering and expertise.
"The legitimate concern about diluting a brand's exclusivity in the broadly accessible online world requires brands to move carefully to ensure sustainable, long-term value creation," said Arienti.
This shift cannot be avoided as Deloitte reported that 58% of millennials now go online to search for information on luxury items. Further, 31% use social media for gathering information around discounts and promotions, compared with just 10% for older luxury consumers.
But three quarters of the younger group still felt that the most important benefit of buying luxury in-store was the ability to touch and feel products and many also valued knowledgeable sales associates and service.
"The channels on which luxury consumers shop are constantly evolving, making it critical for companies to understand the changing desires, buying behaviours and channels of luxury consumers," said Arienti.
Speaking at an event in Monaco that coincided with the report's publication, Arienti further stated that "the luxury space can create powerful experiences that will help to positively influence societies and cultures".
She suggested that leading luxury players would increasingly adopt such platforms to promote their products. "Luxury brands are doing so in three ways: fostering long-term talent, celebrating history and culture and charitable support," she added.
Data sourced from Deloitte, Luxury Daily; additional content by Warc staff