Luxury Retail in 2021: New Avenues for Growth

In a year that saw customer behaviours, needs, expectations and purchase patterns dramatically change – finding new avenues for growth and innovation has never been more important for luxury retailers. Discover 3 major emerging opportunities for luxury brands below.

For luxury retailers, for whom excellence and consistency in service and experience are key differentiators, successfully responding to the new retail normal requires deeper insights, greater agility and elevated customer experiences. Now is the time for luxury brands to rethink strategies for growth and customer retention. The macro trends that luxury retailers should have on their 2021 agendas and beyond revolve around three themes: sustainability, distribution and collaboration.

 

Sustainability : Responding to heightened sentiment

For many consumers, the long-lasting emotional effects of the COVID-19 pandemic will be reflected in more considered purchases. With luxury customers necessarily spending more time online during the research and inspiration phases of their buying journey, luxury brands have an opportunity to respond to the growing importance of sustainable and social-impact messaging.

High-end fashion brands were among the first to pivot during the pandemic, turning their hand to making masks and gowns for frontline workers. But in better times ahead, this community-minded action could influence buying decisions as consumer preferences shift toward a “silent luxury” that places an equal premium on aligned values alongside quality, craftsmanship and provenance.

Brands that have a clear and measurable agenda around sustainability and social impact would do well to present value-driven messages in a relevant way, whether that’s in store, on their website or in advertising and editorial.

 

 

Who’s doing it well?

Burberry

The British luxury clothing retailer‘s five-year Responsibility Strategy looks at the whole of its ecosystem, setting ambitious targets for the company, its product and the communities that sustain the fashion industry.

Johnston’s of Elgin

Founder members of the Sustainable Fibre Alliance, which works with the whole of the cashmere supply chain.

Patagonia

The outerwear brand hit the headlines in 2011 with its Don’t Buy This Jacket full-page ad in the New York Times and continued its anti-Black Friday campaign (“Buy Less, Demand More”) in 2020 with a ‘reversible poem’ about the climate crisis.

Selfridges

Launched earlier in 2020, Project Earth is the store’s five-year sustainability plan, which includes a clothing rental service.

Tiffany

One of the first jewellery brands to source metals and diamonds from responsible mining companies, Tiffany now has a zero-tolerance policy for purchasing diamonds from countries with human rights infringements.

 

Marketplaces : Getting brands into hands

In a year when the term “contactless” became part of every consumer’s vocabulary, luxury brands have needed to improve their visibility with global audiences, especially the high-value shoppers who would normally travel to visit their favourite brands’ flagship stores or airport retail locations.

As many touchpoints have had to shift to digital platforms, brands must take a fresh view on distribution channels to ensure they stay front of mind. Where brands’ own online shops don’t attract adequate traffic in terms of volume or target customers, curated multi-brand sites (or marketplaces) can create additional touchpoints.

Net-A-Porter, FarFetch, Matches Fashion lead the way for luxury clothing brands. Clos19 brings together Moët Hennessy’s family of champagnes, wines and spirits under one e-commerce umbrella that also features editorial and inspiration content. And LuxDeco brings exclusive, high-end furniture and articles together in one highly curated portal.

Conversely, as working from home has increased screen time, analogue channels such as printed materials may see an uptake as people seek to regularly switch off or reduce the amount of time they spend on devices. Beautifully crafted magazines and product-laden ‘magalogues’ like The Liberty Book literally puts brands into the hands of customers.

Further proving the potential of print, the team behind Monocle chose to launch a glossy sister magazine for women in December 2020, full of advertising from top global luxury brands. An opportunity to ‘lean back’ with valuable potential customers for whom print itself is perceived as a luxury item with inherent value.

 

Collaboration: Try a little togetherness

The trend for creative collaborations continues to help luxury players reach new audiences, stay relevant and gain industry and public attention.

It can be a heritage brand targeting younger shoppers (Barbour x Noah; Dior x Nike). Or a celebrity or influencer partnership to amplify a launch (Alexander Wang x Huawei; Jeff Koons x Louis Vuitton). Or two high-profile brands collaborating and co-creating something new (Gucci x The North Face).

Whichever form brand collaborations take, the interest and excitement they generate, especially when promoted through targeted, data-driven marketing channels that are both brand- and audience-appropriate, should be part of a luxury brand’s growth toolkit.

 

 

Luxury in the digital age: A multi-actor service encounter perspective
Journal of Business Research, Nov 2020

https://www.sciencedirect.com/science/article/abs/pii/S0148296320303313?dgcid=rss_sd_all

Sustainable Luxury: Millennials Buy Into Socially Conscious Brands

Luxe Digital

https://luxe.digital/business/digital-luxury-trends/millennials-buy-sustainable-luxury/

Patagonia’s reversible poem ad is a check on runaway Black Friday Cyber Monday spending 

Fast Company, 30 Nov 2020

https://www.fastcompany.com/90580854/patagonias-palindrome-poem-ad-is-a-check-on-runaway-black-friday-cyber-monday-spending

How print became the definition of luxury in the digital age

Print Power EU

https://www.printpower.eu/insight/how-print-became-the-definition-of-luxury-in-the-digital-age/#:~:text=’What%20sets%20a%20luxury%20brand,is%20an%20act%20of%20creation.&text=’In%20the%20same%20way%20it,safe%20environment%20for%20the%20brand.

Best of Brand Collabroations: June 2020

Content Commerce Insider

https://contentcommerceinsider.com/blog/best-of-brand-collaborations-june-2020


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