High-net-worth individuals are pickier than ever about where they spend and craving innovative and immersive brand experiences above all else, so luxury brands must rise to the challenge. Here are 10 players who are well and truly raising the bar.
Like a thoroughbred racehorse spooked by a carrier bag blowing in the wind, the luxury goods market has reacted rather erratically to the last recession. In a market that refuses to show any real signs of depression, growth in the luxury sector continues to be very visible, despite the ups and downs on the surface.
During these turbulent times, the rich continue to spend; it’s what they do best; but what they chose to spend their money on and how much they are willing to pay for products and services has changed. The truth is that the global recession didn’t so much affect the world’s wealthy financially, as it affected them emotionally.
They continue to spend, but the joy of spending has been marred with insecurity about their wealth and a fear of their commercial generosity being taken for granted. In effect, the recession has bred a class of much more enlightened high-end consumers, who want to be smarter about the way they spend – and those recessionary behaviours have stuck.
High-net-worths (HNWs) are spending more time researching products and services than ever before: they want cool, they want fun and they want experiences. This behaviour has become ingrained and is unlikely to change in the near future.
It isn’t enough for brands to trade on what the label used to stand for. Brands need to demonstrate their value in an ever increasingly competitive marketplace. This is in a time where the ability to research, question, and compare has become easier than ever.
The challenge for today’s luxury brands is a considerable one. Not only do they have to contend with being challenged by the customer they thought they knew, they are also having to deal with new audiences and their accompanying behaviours, which in many cases brands have little experience of dealing with.
This extract from the Cocoon Luxury Trends report aims to highlight a selection of innovative luxury players who are providing engaging experiences for their customers and breaking some of the barriers faced by luxury brands in the process.
“ High-net-worths (HNWs) want cool, fun and they want experiences ”
We live in the culture of now. As always-on consumers, we seek near constant gratification. We demand to be inspired and entertained. We want to create our own individual moments of joy, and be able to share those in-the moment experiences with our peers.
Social media has democratised content creation. The implication for luxury brands is that they can no longer hide behind the carefully controlled image they create for themselves.
Luxury brands need to wave goodbye to exclusivity and say hello to accessibility, allowing fans to not only participate in, but also shape the story.
CASE STUDY: KENZO
Kenzo paired up the Blue Marine Foundation to create a collection that campaigns against overfishing. To promote the collection, Kenzo created an interactive microsite and launched a digital pop-up in Paris, where passers-by could visualise the plight of fish via a virtual aquarium.
The digital installation showed fish swimming around with 30% of the fish gradually disappearing, representing the number that could become extinct due to overfishing. Viewers could donate to the cause by purchasing a sweatshirt from the brand’s limited edition #NoFishNoNothing collection. Each time a purchase was made, more fish were added to the aquarium. They could also post a photo to Instagram with the hashtag ‘#NoFishNoNothing’ to add more fish.
The pop-up was a clever way for Kenzo to interact with its customers via social media, by creating a very shareable experience, whilst aligning itself with a great environmental cause.
CASE STUDY: LAND ROVER
Land Rover has partnered with Novelist William Boyd to create an interactive novel which is hosted on Tumblr. The Vanishing Game is a short story commissioned by Land Rover to explore how adventures are part of the 4×4 experience.
CASE STUDY: MICHAEL KORS
Michael Kors introduced #InstaKors, allowing users to shop the brand’s Instagram. Users can double click an Instagram image with the #InstaKors hashtag, which emails out a direct shopping link featured in the photo.
“ Luxurians are going places, and luxury brands need to keep up ”
We are a connected culture and consumers want luxury products at a time that’s convenient, that speaks their language and that understand them as an individual. Luxurians are going places, and luxury brands need to keep up.
The luxury consumer is a mobile one. They think in cities not countries and are constantly on the move. With tourist spending now accounting for 60% of luxury revenues in France, 50% in the UK and 55% in Italy, it is key for luxury brands to increasingly think local and learn to connect on deeper cultural levels, to ensure continued custom and loyalty.
CASE STUDY: LE BON MARCHÉ
Parisian store group Le Bon Marché and Miami Beach’s The Webster Miami have revealed that they will be working together for a one-off all-white collection due to go on sale on both sides of the Atlantic early on in this year in a bid to appeal to customers on both continents. The all-white limited edition designer collection is a play on Miami’s year long summer and white sandy beaches. This collaboration marks a rare pairing between two competitive global department stores, but will result in maximum brand reach.
“ The retail environment is as important as ever ”
The retail environment is as important as ever, but instead of being constructed like a brand museum from which you can buy some of the artefacts, it needs to diversify into a brand style theme-park. It should be an environment that is filled with personalised stimulation for the imagination and individualised to create an immersive shopping experience.
CASE STUDY: SNEAKERBOY
Next-gen luxurians have evolving fashion tastes and are au fait with seeing sneakers on the catwalk. That said, they are increasingly savvy and very demanding of the retail environment; a slower and higher cost experience will not win a return visit.
Kyvetos’s Sneakerboy store opened in Melbourne, Australia in September last year with one eye on this audience. The store mixes traditional values of personalised customer service with contemporary technology. The store itself carries no stock other then samples for trial, allowing for greater experience via huge sample selection in a much smaller store footprint. Once a customer has chosen their sneakers, quick payment is enabled through the Sneakerboy app and the warehouse delivers direct to the customer’s door.
CASE STUDY: PRADASPHERE
Prada’s offering at Harrods – Pradasphere – is a more dramatic example of the personalised retail space. The café and Exhibition launched in the summer of 2014, but as a part of their takeover the space wasn’t used to sell product (none featured), it was given over to a sharing of the inspirations. From art, film, photography and culture, the only items on show were all the pieces that influenced Miuccia Prada to design the products that the luxury empire created. This experiment drove plenty of positive buzz and produced standout in the ever-blurring convergence economy.
CASE STUDY: JOHNNIE WALKER
Johnnie Walker created the Johnnie Walker House concept. A series of opulent, elegant, gender-neutral spaces in Seoul that appeal to the senses of luxurians. The building houses a bar, museum, store and members’ club that deftly blends the brand’s iconic ‘Striding Man’ logo with traditional design and futuristic digital elements. Using digital art, textural movement and sound, the creators were able to produce a video installation that evoked the character and taste of the whisky.
“ There has been a shift in the way the public perceives brands ”
A luxury brand doesn’t need heritage to convey its legendary status; it needs attitude, provenance and a strong personality to match.
Luxury brands are changing. Just 15 years ago, the way they were defined was largely based on their heritage. But there has been a shift in the way the public perceives brands and they are now expecting more than just an out-dated piece of passive communication. Consumers want to experience and discover the brand for themselves, they want to be involved and become a part of that brand story.
CASE STUDY: SELFRIDGES FRAGRANCE LAB
Selfridges Fragrance Lab is an excellent example of innovation that doesn’t rely on its heritage to convey its brand identity, but it’s core message of “It’s a shopping experience that promises to surprise, amaze and amuse its customer by delivering extraordinary customer experiences”.
The collaboration between The Future Lab and Design Studio to create the Fragrance Lab engaged customers with the brand and the process of creating a product unique to them. The temporary installation located in the Concept Store in Selfridges took customers on a journey through sensory chambers, asked them questions to determine their tastes and habits and then presented them with a 50ml bottle of their signature scent.
Even 108 years after opening, with new technology and an ever-evolving audience this instillation still answers true to that original core thought, proving that a strong brand identity creates it’s own legendary status. And this is just one of the many experiences Selfridges create every single year.
CASE STUDY: CHANEL SHOPPING CENTRE
At the AW14 Paris fashion week, Chanel installed the Chanel Shopping Centre. A tongue-in-cheek nod to the irony of consumerism, that resulted in an in-joke that blurred the lines between luxury and mass market. They designed throwaway products in Chanel packaging that allowed their customers to laugh along with them at the irony of it all. Thanks to social media creating a more informed audience and the brand recognising their audience as smart and knowledgeable, not only were Chanel able to have fun, but they gave their customers what they wanted – entertainment. As a result, sharing this in-joke created a stronger bond between the brand and their customers, new and old.
“ Millennials are a vast and diverse group, the first wave of digital natives ”
There’s no disputing that Millennials are a vast and diverse group. However, what ties them together is the use of technology. They’re the first wave of digital natives, having information constantly on demand, mobile and in ever more fragmented ways than older generations. And having readily accessible information naturally means they are more aware about what they are buying and are also more knowledgeable about how that product was produced and how it is being sold.
CASE STUDY: NET-A-PORTER
Net-a-porter has an official hashtag (#THENETSET) on their Instagram account for customers to post their latest purchases from the website, engaging them with the brand and allowing them to contribute to Net-a-porters’ style community.
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