This is the most transformative era in the history of luxury goods and those brands that are doubling down, investing in their businesses and evolving with the times are thriving.
Willingness to adapt to changing market conditions and provide a positive customer experience are among the traits required for Luxury Brands Awards finalists to be successful. Others include the creation of a digital experience that complements the physical presence and the ability to connect positively with customers.
The general situation for the British luxury market is still unclear due to Brexit and the pandemic. One of the most important drivers for a flourishing luxury goods market in the next year will be tourists, and if lockdowns are fully lifted, it will mean that many will be travelling to the UK in large numbers, and taking advantage of the weak pound and favourable exchange rates. Another favourable trend for the British luxury market is that since lockdown luxury customers are increasing their online purchases as compared with China, prices are on average 22.0 per cent cheaper in the UK, narrowly beating Italy (21.6 per cent cheaper) and France (21.4 per cent). Given current conditions, the UK is fast becoming the most affordable luxury market in the western world.
The internet has become an integral part of the purchasing habits of various groups of consumers worldwide. However currently, luxury sales growth is being driven by millennials and Generation Z. With different expectations, younger shoppers seek a personalised shopping experience that seamlessly integrates both online and off line platforms.
This shift has motivated demand for connective technology such as Augmented Reality (AR) and Artifcial Intelligence (AI). By using AR and AI technologies, luxury brands can provide a personalised consumer experience, reach a wider audience, deepen product experience, and build stronger customer relationships. In parallel, the development of technologies such as voice commerce and the Internet of Things (IoT) are reshaping the entire luxury industry.
Luxury brands positioned as reliable sources of AI-driven recommendations are improving how they engage with consumers. More widespread adoption of AI is also making consumers increasingly reliant on suggestions and advice provided by their various devices, rather than making decisions based on personal experience. In January 2018, Estée Lauder-owned Smashbox Cosmetics launched its first Messenger bot for UK customers to help explore new products, read usage instructions, and locate the nearest stocked store. In December 2017, LVMH launched a “virtual adviser” on Facebook Messenger for US clients. The chatbot answers queries relating to Louis Vuitton products, such as searching the brand’s online catalogue, detailing the brand’s history, and providing advice on product maintenance.
Further, luxury brands are also using AR in combination with their physical retail stores to enhance the shopping experience of their customers. This technology helps consumers visualise and “try” new products at home before making a purchase. For example, in July 2017 Estée Lauder announced the launch of a conversational AR lipstick advisor that helps potential customers identify their ideal lip shade. L’Oréal is increasingly focusing on AR to enhance customer experience: in March 2018 they acquired ModiFace, an internationally recognised leader in AR and AI applications used by the beauty industry. YOOX’s “Try, Share and Shop” initiative partnered with Lumyer in 2017 to produce an AR camera app that enables users to try handbags, sunglasses and jewellery from YOOX in virtual reality. Burberry has used ARkit by Apple as part of its digital marketing strategy through immersive story-telling.
So far, relatively few personal luxury brands have used AR apps, with the most widespread use taking place in the makeup sector. The adoption of the AI- and AR-driven technology for the whole luxury sector is not so fast as the market was expecting, because the larger players have complex cost structures and the return on these technologies could not outweigh the cost of investment in them. Despite this, big luxury groups should be aware of digital transformation in retail technology, which is changing how affluent consumers shop and driving growth of independent luxury brands.
The brands recognised within this year’s Luxury Brands Awards are transforming the retail experience by creating a store of the future and building diverse teams built on sustainable values which attract the best and brightest from around the world.
Until now it has been hard to identify the best companies when it comes to luxury. The Luxury Brands Awards will provide a long-awaited index of the most proactive luxury brands in the UK and will shine a light on best practice across all strands including, customer service, engagement, digital impact, communication with internal and external stakeholders, supply chain sustainability, product quality continuity and international sales.
The Exceptional Organisations and Leadership publication will be launched within a high-quality silver foiled publication. The companies featured within the final report will then be reviewed and a number will be shortlisted to receive a prestigious Luxury Brand Award.
The Luxury Brands Awards presentation will take place at a star-studded reception in Central London and it will, without doubt, catch the attention of the local, national and international media. Key influential decision makers will be in attendance to witness this exciting launch and the initiative will herald a new era for promoting Britain’s leading companies within the luxury brands sector.