11/27/2015
Christian Nielsen, MBA
Selling Manager at Hugo Boss
The Necessity of Change and Appeal in the Luxury Sector
Many luxury goods companies have already realized that the luxury sector has changed in many ways: Geographically, demographically, environmentally, socially responsibly, and politically, just to name a few ways. Some companies have reacted to the changes by isolating new and better ways to reach those who are quickly becoming, and who will be, the core luxury client of the future. Other companies have continually chased new and emerging markets in an effort to gain market share. Some have assumed that the millennial client represents up to half of luxury goods consumption currently, but have done little to adjust the business model to allow for a different direction of growth.
Thus, there is a lot of change going on for an industry that has existed for hundreds of years. The challenges to attracting a new generation that has different life priorities, different tastes, different lifestyles, values a healthy work/life balance, time away, socially responsible business, environmental impact and consciousness, and which does not necessarily have the knowledge of luxury heritage is formidable. Luxury companies must, to a great extent, reinvent themselves. In order to attract, appeal to, and capitalize on a younger, well-educated demographic that, in may cases, has high student debt, spends hours per day on social media and digital communications, has grown up in a high tech world, and who may or may not even be aware of luxury brands long established among their parents, luxury goods companies are going to have to change on multiple levels, without sacrificing or compromising the core tenets that are the crux of the luxury brand.
What, in your opinion, will luxury companies need to do going forward in order to gradually shift the business model from the focus on the aging baby boomer client to the younger, millennial client, whose very different priorities and tastes will undoubtedly reshape the luxury sector in every facet from travel to product consumption?
Thus, there is a lot of change going on for an industry that has existed for hundreds of years. The challenges to attracting a new generation that has different life priorities, different tastes, different lifestyles, values a healthy work/life balance, time away, socially responsible business, environmental impact and consciousness, and which does not necessarily have the knowledge of luxury heritage is formidable. Luxury companies must, to a great extent, reinvent themselves. In order to attract, appeal to, and capitalize on a younger, well-educated demographic that, in may cases, has high student debt, spends hours per day on social media and digital communications, has grown up in a high tech world, and who may or may not even be aware of luxury brands long established among their parents, luxury goods companies are going to have to change on multiple levels, without sacrificing or compromising the core tenets that are the crux of the luxury brand.
What, in your opinion, will luxury companies need to do going forward in order to gradually shift the business model from the focus on the aging baby boomer client to the younger, millennial client, whose very different priorities and tastes will undoubtedly reshape the luxury sector in every facet from travel to product consumption?
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