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Traditional luxury brands are increasing their digital presence, appealing to a more digitally savvy audience, a new report by Beverly Hills Conference and Visitors’ Bureau has found.
According to ‘ The Future of Luxury ’ report, authored by trend forecast agency, IN(K), luxury e-commerce is projected to triple to $75 billion by 2025, with online sales taking an 18 per cent share of total luxury sales.
Julie Wagner, CEO, Beverly Hills Conference and Visitors Bureau, said at the launch of the report, “Fashion brands are utilising social media. Burberry recently showcased a collection on popular app Snapchat. Other brands too are looking at broadcasting fashion shows online.”
However, the report also said luxury consumers will seek out more original and authentic experiences that can’t be seen or bought online. “Modern day purveyors must fuse the digital with the physical to create more immersive brand experiences and consumer journeys,” it said.
One way for brands to get around concerns of decreasing customer perceptions of exclusivity is limiting the variety of what is sold, the report said, adding that Hermes, for example, sells its handbags online but the Birkin and Kelly lines can only be bought at its boutiques.
The report identifies the top 10 cities by their population of ultra-high net worth individuals (UHNWIs), analysing their different demographics and spending patterns. Defined as having a net worth of at least $30 million per household, there are 1,99,235 UHNWIs in the world.
London has the highest UHNW spend and will continue to surge given its central location, time zone and hub airport, benefiting from the increasing city hopping millennial, the report said.
Tokyo, second on the list of top 10 cities of UHNWIs, is seeing a decrease in its super-rich in comparison to its counterparts. However, the value of individuality and exclusivity has become more mainstream, due to the increasing Japanese custom of gifting.
The report also identified a future trend as ‘LUXURY 3.0’ where consumers will revert back to ‘old-school’ concepts, such as private members' clubs, meeting places for connoisseurs, organic, locally-sourced eating and exclusive tailoring.
“Craftsmanship, exclusive products and services as well as more traditional practices will herald over the digital revolution that is currently taking the industry by storm,” it added.
Beverly Hills is a premier holiday and business travel destination in the US.
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