Conference Presentation, Panel
Luxury Without Borders
- Global luxury spending share is predicted to decline in the Americas and Europe while experiencing rapid growth in Asia and a healthy clip in the Middle East; the United States is expected to remain the largest single market, with the rest of the world showing much more velocity.
- Product categories including leather goods, jewelry, and shoes are expanding at a substantial pace, while other items are increasing rapidly; men's growth is attributed to a generation interested in appearance and online shopping, contrasting with women who spend two to three times more and seek emotional brand connections.
- 91% of millionaires prefer online luxury brands, though high-end consumers still require physical "touch and feel" experiences that will not be completely abandoned; conversely, 65% of wealthy consumers believe brands lacking social network presence are out of touch.
- The retail landscape is shifting toward digital and physical integration, as traditional department stores are generally shrinking and expected to be out of business if they do not adapt to a customer base where nobody under 50 shops there.
- Future branding and retail models must be "digital and physical," with 90% of current brands lacking direct consumer data; new business models will utilize specific customer targeting and dynamic incentives, such as issuing $25 coupons to predicted best consumers within 30 days while excluding bottom 10% retention efforts.
- E-commerce is projected to be the sole source of future growth, though online purchasing is currently 90% to 95% domestic, a trend expected to shift long-term due to internationalization and potential changes in trade legislation that could particularly benefit Africa and Asia.
- Operational barriers in online retail, specifically sizing, remain unsolved, and consumer demand is shifting away from four-month seasonal waits toward immediate acquisition; 5% discounts are identified as more effective than social messaging in driving purchases.
- Africa's population is expected to double by 2050, with 62% being young people driving future fast-moving consumer goods growth, though Brazil remains a difficult market due to taxes despite becoming a significant brand market.
- Businesses must accelerate to match consumer expectations for immediate availability, as consumers want to buy today and wear tomorrow rather than waiting months, contrasting with current "dinosaur" business speeds.
- While business may not change completely in the next three to five years, it is predicted to be unrecognizable in 10 years, driven by Millennials' distinct shopping behaviors and the need to abandon legacy construction methods used by brands like Michael Kors.
- Environmental constraints are noted, such as Stella McCartney's attempt to be carbon neutral by 2020 despite 50% of her business being owned by a leather goods group; additionally, menswear Fashion Week has incorporated menswear shows in the last two seasons.