How Luxury Marketing Will Look Like in 2018
The concept of luxury is changing, just like everything we are surrounded by is, like our preferences and sometimes passions. Consumer expectations of luxury continue to rise, and that what used to be luxury is now seen by the current generation of consumers, everyday experiences. And, as always, technology has a big part in this change as it makes everything easier,closer and more affordable, therefore what some years ago was considered luxury today might not be so. And just like what today is luxury in the years to come might not be anymore. The definition of luxury is changing, while “upper luxury” appears.
According to Deloitte’s “Global Powers of Luxury Goods 2018”, the world’s 100 largest luxury goods companies generated sales of US$217 billion in FY2016 and the average luxury goods annual sales for Top 100 companies is now US$2.2 billion. The report discusses the trends and issues that are driving the luxury industry. It also identifies the 100 largest luxury goods companies based on publicly available data for FY2016 (which they define as financial years ending within the 12 months to June 2017), and evaluates their performance across geographies and product sectors.
The growing importance of non-western markets for the luxury goods industry has been supported by supply chain leadership, technological innovation and international investment. These factors will help maintain further strong
growth in these geographical markets.
Deloitte’s “Global Powers of Luxury Goods 2018” points out:
Luxury brands have refocused their business strategies to capitalise on these changes. Giorgio Armani is engaged in an in-store installation collaboration agreement with Colombian artist Marta Luz Gutiérrez, while Louis Vuitton is conducting an advertising campaign using a
building designed by the late Mexican architect Luis Barragán. Rising prosperity in major cities and growing formal market power over the black market will ensure sustained Rest of the World (ROW) demand for luxury goods. To succeed in this context, luxury players should focus their investments on digital connectivity, upwardly mobile consumers and bold business models, which are key components of the
personal luxury industry today.
Some aspects that marketers must pay attention and act on in 2018:
Still according to Deloitte, collectively, Millennials and Generation Z will represent more than 40 per cent of the overall luxury goods market
by 2025, compared with around 30 per cent in 2016. Unlike Baby Boomers, many Millennial luxury consumers expect to interact with brands across a range of digital platforms, rather than only through traditional channels. Millennial consumers are also important for in-store shopping and expect a high-value, customized experience. Luxury brands should seek to change their business models to meet this demand, for example by providing more loyalty
programs and invitations to in-store events.
Customize your approach according to your audience. Personalization is still key as a marketing technique to be used as 45% of luxury consumers are asking for personalized products and services. With different expectations, younger
shoppers seek a personalized shopping experience that seamlessly integrates both online and offline platforms. This shift has motivated demand for connective technology such as Augmented Reality (AR) and Artificial Intelligence
(AI). By using AR and AI technologies, luxury brands can provide a personalized 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.
Social media becomes an important marketing tool for luxury as well. Instagram became the leading social media platform for fashion designers. Gucci more than doubled its Instagram followers between 2016 and March 2018, with successful Insta-campaigns such as #TFWGucci.
In future, the biggest challenge for luxury brands will be to make optimum use of social media without compromising their brand values. The success of a social media strategy will be converting “likes” into an interactive and engaging experience for customers.- Deloitte
An omnichannel approach – onnichannelluxury
A true omnichannel global market environment would require luxury brands to close gaps in customer experiences across channels, to offer a seamless, unified brand experience irrespective of the device or physical touchpoint used. Therefore, each channel needs to interact with and support
others to establish a single brand presence. Demand for an omnichannel approach is a natural development from the spread of digital technology and
e-commerce markets. During this process of change, the ability of luxury brands to leverage available inventory will be a key differentiator.
Digital must remain a priority to define an omnichannel strategy compatible with target expectations. The percentage of online sales perceived as being additional, and not a cannibalization of, physical sales is decreasing each year, with China the least cannibalized country to date.
“Luxury brands should develop their mobile strategy: 55% of luxury consumers buying online use their mobile phones versus personal computers. Peaks appear among the youngest generations and Chinese consumers, 75% and 77%, respectively, of whom use mobile. Social media and influencers are gaining power. For the first time, social media is the first source of information and the channel of primary impact used by true-luxury consumers, followed by magazines and brand websites. Five platforms (Facebook, Instagram, WeChat, Weibo, and QQ) are dominating the social media world, but Facebook is losing momentum to Instagram in the Western world and QQ is losing momentum to WeChat and Weibo in China,” states in “True-Luxury Global Consumer Insight”, the fifth edition of an annual study by The Boston Consulting Group (BCG) and Altagamma.
Millennials: Consumer Aspirations Are Disrupting Luxury
Collaborations with streetwear brands and artists are becoming the norm for Generation Zers and Millennials. “Collaboration covers demand for newness in a less risky way. It gives brands a cool edge and strengthens brand awareness as well as increases willingness to buy the brand. Collaboration is increasingly in demand and turns out to be a very effective purchasing incentive,” said Olivier Abtan, a partner in BCG’s Paris office and the global leader of the firm’s luxury, fashion, and beauty topic.
Unlike “absolute luxurers,” who buy luxury items exclusively, millennials do not hesitate to mix and match. According to BCG’s study, about 55% of this group trades down to buy handbags or T-shirts from cheaper brands, or mixes their style by buying sneakers and luxury shoes from luxury niche brands (including luxury sports). This trend appears to fulfill consumers’ need to create their own style. When they do look for different brands, it’s because luxury brands don’t have offerings in certain categories or because of the Millennials’ desire to have a unique style, express themselves, and seek out niche brands.
Use iconic personalities in your communication
With all the big changes, some things are meant to last and take the test of time. Chanel’s iconic marketing history began with a print advertisement for its perfume, Chanel No.5, in 1921. Its first celebrity endorsement didn’t feature until 1954, with Marilyn Monroe. However, it wasn’t until 2005 when Chanel first adopted videography, and from here, the rest is history.
“Despite not adopting social media and integrating the platform with videography until 2009, its marketing strategy is nothing short of stupendous. Selecting admirable public figures such as Keira Knightley and Nicole Kidman to star in Chanel’s unmistakable short films, revived the brand as an iconic symbol of both cultural and digital relevance. With the use of video and social media integration, Chanel has grown to having more than 57 million social followers globally, the highest in the luxury fashion industry. The brand focused on Facebook as their initial social media platform, due to the video capabilities such as extended video length, that Twitter and Instagram do not support. For the brand’s primary consumer, the more wealthy and mature client, Facebook was the ideal platform for accessing this demographic,” wrote Little Agency.
According to Retail Insider, British Airways is encashing big on a recent study on sensory sciences by Oxford about how sound influences the taste of food. Based on the findings of this study, they launched a list of 13 in-flight tracks to enhance the taste of the meals served during the flight, providing a truly luxurious experience. Moreover, Soundwich in Portugal delivered gourmet sandwiches packed in metal boxes that play music chosen by the chef when opened.
More ideas you can see here.
Top Technology Trends in 2018
The last decade has been undoubtedly under the sign of technology, each year its imprint being stronger and stronger and blurring more and more the lines between fiction and reality.
From AI and VR to the IoT ,companion robots,5G and smart cars, here are the top 18 trends from CES this year, as related by Forbes.
According to DXC.technology, there are 6 big trends coming our way in 2018: re-platforming the enterprise, the war for digital talent becoming creative and vigorous, qualified enterprises, cyber resilience,companies growing thanks to digital business extensions and artificial intelligence getting smarter and more practical. The detailed information can be found here.
Nomophobia – what it is and how it presents itself
95 percent of Romanians don’t leave the house without their smartphone. This is only one of the information gathered by Huawei, that conducted a study together with the multinational market research company Ipsos, collecting data from 12 countries, including Romania. The purpose of the study was to analyse the behaviour of smartphone users over 24 hours.
The study by Huawei and Ipsos concludes that 79 percent of Romanians use their smartphone to read their e-mails, check their social media accounts and messages, while 64 percent do this when they wake up. This is one of the reasons why 60 percent of Romanians take their phones to bed with them and around 11 percent admit that they sleep with their phone next to them.
Huawei also conducted a survey called “Smart relationships” to analyse the average “relationship” each user has with their smartphone. The results show that 59 percent of Romanians check their phones several times per hour, and their habit includes searching for information, using the device for entertainment, navigating social media networks or the internet, reading news and connecting to their home bank systems. Thus, the research evidently shows how “attached” Romanians are to their smartphones.
The study also showed that 87 percent of Romanians need a smartphone to send text messages, 72 percent use it to capture photographs and, of course, 79 percent use it to check social media networks. It was also found that 56 percent of respondents admit that they keep their smartphones with them for over 13 hours a day, while 27 percent actively use the smartphone for 3-4 hours/day. The places where Romanians use their phones the most are: 66 percent while being in the kitchen and 47 percent when they’re in their children’s rooms.
This situation of mobile dependency already has a name: nomophobia. “”NO MObile PHOne phoBIA” is a 21st-century term for the fear of not being able to use your cell phone or other smart device. Cell phone addiction is on the rise, surveys show, and a new study released Thursday adds to a growing body of evidence that smartphone and internet addiction is harming our minds,” wrote CNN.
According to The Guardian, when Deloitte surveyed 4,150 British adults in 2017 about their mobile habits, 38 percent said they thought they were using their smartphone too much. Among 16- to 24-year-olds, that rose to more than half. Habits such as checking apps in the hour before we go to sleep (79 percent of us do this, according to the study) or within 15 minutes of waking up (55 percent) may be taking their toll on our mental health.
“It’s not necessarily the top thing when my clients come in, but it’s often in the mix, tied in with anxiety or insomnia or relationship issues. Particularly when anxiety and insomnia’s there, it’s rare that it’s not related in some way to heavy use of digital devices,” said psychotherapist Hilda Burke, a spokesperson for National Unplugging Day in 2016 and 2017.
Moreover, a small study presented at the annual meeting of the Radiological Society of North America in Chicago showed that cell phone addiction may affect brain functioning.”Researchers from Korea University in Seoul used brain imaging to study the brains of 19 teenage boys who were diagnosed with internet or smartphone addiction. Compared with 19 teenagers who were not addicted, the brains of the addicted boys had significantly higher levels of GABA, a neurotransmitter in the cortex that inhibits neurons, than levels of glutamate-glutamine, a neurotransmitter that energizes brain signals,” added CNN.
Worldwide technology trends in 2017
The technology is advancing nowadays even faster than the speed of light. Its advances and upgrades can seem overwhelming, thankfully though we have the specialists to help us understand where we are heading and how to handle it. The Deloitte’s 2017 report outlines how companies presently must sift through the promotional noise and hyperbole surrounding emerging technologies to find those solutions offering real potential. To realize that potential, they should become ‘kinetic’ organizations—companies with the dexterity and vision required to thrive amid ongoing technology-fueled disruption.
While the report identifies key trends that will likely revolutionize enterprise technology in the next 18-24 months, the exponentials chapter looks even farther into the future, describing four key areas that blend science and applied technologies.
The 2017 trends identified by Deloitte, digitaltrends.com, Forbes and Gartner are as follows:
IT unbounded—The boundaries surrounding IT are fading as technology becomes integral to almost every business function and relationship.
IoT and Smart Home Tech
A multitude of wireless technologies now exist to serve your smart home needs — Zigbee, Z-Wave, Bluetooth, Wi-Fi, and more. And there’s more smart home platforms to consider than ever before too — Wink, SmartThings, Iris by Lowe’s, even systems from security providers like ADT and big brands like Comcast. While centralization in theory should make things easier, it’s made it worse.
The AI world will have a head-on collision with the Internet of Things in 2017, too, Gartner predicts. IoT is where everyday items get chips or sensors, and apps, and join the internet — from your car to your toothbrush. It makes total sense that the apps that control IoT devices will also make use of machine learning.
In 2017, watch for devices to start to communicate and help each other make decisions. “As intelligent things, such as drones, autonomous vehicles and smart appliances, permeate the environment, Gartner anticipates a shift from stand-alone intelligent things to a collaborative intelligent things model,” Gartner says. Gartner estimates that six billion connected “things” will be actively requesting support from AI platforms by 2018.
The total IoT market is estimated to grow from $157.05 billion in 2016 to $661.74 billion by 2021, predicts Markets and Markets.
Artificial Intelligence and Automation
AI and chatbots that understand context a whole lot better than ever before. More and more jobs will also be automated, we’ll also see smart devices gain from increased automation, learning your patterns and preferences without you needing to tell them and making better and more accurate suggestions and recommendations.
Research firm Markets and Markets estimates that the AI market will grow from $420 million in 2014 to $5.05 billion by 2020.
Artificial Reality and Virtual Reality
According to Gartner, virtual reality (VR) and augmented reality (AR) transform the way individuals interact with each other and with software systems creating an immersive environment. For example, VR can be used for training scenarios and remote experiences. AR, which enables a blending of the real and virtual worlds, means businesses can overlay graphics onto real-world objects, such as hidden wires on the image of a wall. Immersive experiences with AR and VR are reaching tipping points in terms of price and capability but will not replace other interface models. Over time AR and VR expand beyond visual immersion to include all human senses. Enterprises should look for targeted applications of VR and AR through 2020.
As forbes.com points out we’ve already seen some major steps forward for augmented reality (AR) and virtual reality (VR) technology in 2016. Oculus Rift was released, to positive reception, and thousands of VR apps and games followed. We also saw Pokémon Go, an AR game, explode with over 100 million downloads. The market is ready for AR and VR, and we’ve already got some early-stage devices and tech for these applications, but 2017 it’s going to be the year we see things really take off. Once they do, you’ll need to be ready for AR and VR versions of practically everything—and ample marketing opportunities to follow.
“Look for navigation services to get even more specific — maps in a store’s app, for example, to direct you to a specific aisle to find exactly what you’re looking for. So called “augmented reality,” where virtual objects and information are displayed on top of the physical world, will make its way to our phones. Search engines are already expanding on image search, allowing you to point your camera at something and search for information based on what the lens takes in,” said Ed Oswald for digitaltrends.com.
IDC predicts that worldwide revenues for the augmented reality and virtual reality (AR/VR) market will grow from $5.2 billion in 2016 to more than $162 billion in 2020.
Advances in computer vision and pattern recognition allow companies to unlock insights from unstructured data that until now, have been lost in the dark.
Machine intelligence is helping companies make better decisions, embed complex analytics into customer and employee interactions, and—with adoption of bots and robotic process automation—automate increasingly difficult tasks.
“Throughout 2017, I expect to see machine learning updates emerge across the board, entering almost any type of consumer application you can think of, from offering better recommended products based on prior purchase history to gradually improving the user experience of an analytics app. It won’t be long before machine learning becomes a kind of “new normal,” with people expecting this type of artificial intelligence as a component of every form of technology,” predicts Jayson DeMers for Forbes.
Mixed reality (Physical-Digital Integrations)
Companies are exploring more immersive and engaging ways to combine the physical world and digital systems, creating a new, mixed reality that’s more natural, intuitive and intelligent.
Mobile devices have been slowly adding technology into our daily lives. It’s rare to see anyone without a smartphone at any given time, giving us access to practically infinite information in the real-world. We already have things like site-to-store purchasing, enabling online customers to buy and pick up products in a physical retail location, but the next level will be even further integrations between physical and digital realities. Online brands like Amazon will start having more physical products, like Dash Buttons, and physical brands like Walmart will start having more digital features, like store maps and product trials.
Open standards, cloud-first designs and loosely coupled architectures are the norm in start-ups. Now, large enterprises have similar ambitions.
Traditional business products are being reimagined as services as organizations modernize core systems and the technology stack.
According to Gartner, within three to five years, billions of things will be represented by digital twins, a dynamic software model of a physical thing or system. Using physics data on how the components of a thing operate and respond to the environment as well as data provided by sensors in the physical world, a digital twin can be used to analyze and simulate real world conditions, responds to changes, improve operations and add value. Digital twins function as proxies for the combination of skilled individuals (e.g., technicians) and traditional monitoring devices and controls (e.g., pressure gauges). Their proliferation will require a cultural change, as those who understand the maintenance of real-world things collaborate with data scientists and IT professionals. Digital twins of physical assets combined with digital representations of facilities and environments as well as people, businesses and processes will enable an increasingly detailed digital representation of the real world for simulation, analysis and control.
source: Blockchain Technologies
Blockchain, a way of distributing a database across many far-flung computers, is emerging as the mainstay for digital identities in the emerging trust economy.
Exponentials watch list – Advances in disruption forces like synthetic biology, energy storage, quantum computing, and nanotech could exponentially transform the way we do business. Remember the big Bitcoin phenom of 2015? It turns out that the coins themselves could be far less valuable than the underlying technology, called blockchain, that created them.
Market Reports Hub believes the global blockchain technology market will grow from $210.2 million in 2016 to $2.3 billion by 2021.
Advances in disruption forces like synthetic biology, energy storage, quantum computing, and nanotech could exponentially transform the way we do business.
Humanized Big Data (visual, empathetic, qualitative)
Big data has been a big topic for the past five years or so, when it started making headlines as a buzzword. According to Forbes, the idea is that mass quantities of gathered data—which we now have access to—can help us in everything from planning better medical treatments to executing better marketing campaigns. But big data’s greatest strength—its quantitative, numerical foundation—is also a weakness. In 2017, I expect we’ll see advancements to humanize big data, seeking more empathetic and qualitative bits of data and projecting it in a more visualized, accessible way.
Adaptive Security Architecture
“The evolution of the intelligent digital mesh and digital technology platforms and application architectures means that security has to become fluid and adaptive. Security in the IoT environment is particularly challenging. Security teams need to work with application, solution and enterprise architects to consider security early in the design of applications or IoT solutions. Multilayered security and use of user and entity behavior analytics will become a requirement for virtually every enterprise,” points out Gartner.