Luxury operates in an isolation that protects it from many of the downside elements of economic chaos.
When global economies get bad enough to affect the luxury market, things are really bad. One thing that generally holds true about global economies is that “everything seldom goes horribly wrong everywhere – all at the same time.”
Luxury markets will always benefit from both the absolute luxury and the aspirational luxury buyers. As most of us have witnessed, the new wealth of the world has brought about a shift in the Earth’s axis. With much of the growth in new billionaires coming from Asian nations, the purchase of luxury trappings to produce the outward appearance of wealth has given rise to increased spending by Asian consumers, including those traveling in throughout the Middle East, United States and Europe.
We have witnessed more luxury-based shopping trips specifically out of Asia – and growth in luxury duty-free airport shopping in Asia.
As with any other segment of the fashion Industry, luxury retailers will have to learn how to deal with these changes and manage a broader diversity of consumer preferences, sizing differences and other shopping behavior that may appear to be anomalous to previously established patterns.
More emphasis will have to be put towards gathering business intelligence from new shopping trends and using that data to predict the impact on the future.
For example, do you build more shops in Asia? Do you develop more channel partnerships? Do you package easier and acceptable transport in carry-on luggage? Do you build more relationships, or go to market directly? All are reasonable questions to ask in this growing luxury market.
Study patterns and make adjustments accordingly. If you should decide to expand to Asia, make sure you know as much about the market idiosyncrasies as you did about the markets in which you made your success.
It is a bold new world with lots of opportunities, and with those opportunities come many challenges. To keep up with the pace of change in the luxury market, brands must investigate growth opportunities in and from Asia and all of the BRIC (Brazil, Russia, India and China) countries. Yes, you will continue to sell in your traditional markets, but your growth will likely come from the new frontier for wealth, fortune and fame.
No matter which channels you may choose for your go-to-market, the more you know, or can accurately predict about your customers, the better you are going to operate. The better you operate, the fewer mistakes you make, and the more you create in profits.
Collaboration is key to both internal and external success. Every organization that reads the latest books on how to better serve the customer reads about collaboration and communication. Funny thing is, most organizations look at it as something you only do externally. Yet how is it that we hope to communicate with customers and suppliers if we do not communicate with the people inside our own organizations? Technologies exist today that allow organizations to better communicate and collaborate with both customers and colleagues.
As brands stray further from our comfort zones and explore new product categories, new sizing or new scents that lie outside our traditional areas of expertise, they have to find ways to test the accuracy of our decision making.
It is all about taking massive amounts of data, and through proper analysis, making well thought out and structured decisions, until the flow of the organization and the flow of the demand are in harmony.