Luxury retail strategies see brands continue to refocus their priorities on evolving customer expectations to stay in favour. There have also been some significant statistical shifts in the luxury market – Gen-Z are the fastest growing consumer group, and at least 1/3 of all luxury purchases are now made online.
The old paradigm, (including queueing outside luxury stores, for example), is at odds with a fundamental shift that has been brewing for years: from brand desirability to customer experience. The bar set by digital culture and online services, a desire for freedom and self-determination in an attempt to battle the standardising effects of globalism, and an expectation for luxury brands to provide much more than just a product have all contributed to a new definition of ‘luxury’.
Perceived value lies more and more in brand philosophy, culture and reframes the consumer as a curator and active participant in the brand story – rather than just using luxury products to signal status.
‘The New Luxury Paradigm’ defines a fundamental shift to active customer involvement in luxury brand culture. (Source: Luxe Digital)
Pharrell Brings a customer-centric philosophy to LV – “I’m the consumer.”
“One of the greatest luxuries is time,” says Pharrell Williams, the new creative director of Louis Vuitton. Celebrity involvement, endorsement and creative direction in the world of luxury brands is exponentially growing – meaning a value shift is taking place from the top down. “I knew all the things I wanted to change because I’m the consumer. Freedom is the future of luxury’. Pharrell defines the growth of LV as not just a change in the houses offering, but a shift in perspective.
“Queuing is not a luxury experience.”
‘Queuing isn’t a luxury experience’ writes Imrad Amed for BoF. And he’s right – for years, queuing outside luxury stores and even for streetwear releases, which in some cases helped foster a sense of community, was common. However, waiting in line, whether it’s online or offline, has become tiring for consumers accustomed to the convenience of an app-driven economy.
Traditionally, luxury retail strategies have fostered exclusivity and scarcity to generate hype and desire. But as a multitude of brands started faking product scarcity and orchestrating lightning fast ‘sell-outs,’ customers have caught on, leaving them feeling disillusioned. People want to know that the time and loyalty they invest in a brand are appreciated, and unnecessary waiting or product restrictions do the opposite.
So, what can luxury brands so when thinking about queuing innovation? Queues do have a functional purpose in luxury retail – minimising the risk of robberies and making sure there’s enough sales assistants to look after each customer in the store. Virtual queuing systems have been introduced outside of retail – for example, by the Metropolitan Museum of art. Scanning a QR will put you in line in a ‘virtual queue’ leaving you to spend the interim how you please. Some luxury boutiques have introduced ‘elevated queuing’ extending hospitality offerings to those waiting in line, and some have switched exclusively to appointment only – good for returning customers, but not as logical for capturing new customers and those looking to make spontaneous purchases.
Luxury customer care should be always on – and not just in-store.
Brand exhibitions have been a popular go-to to enhance cultural credentials – but what’s next? (Image: the Gucci Cosmos exhibition in London)
So, what do we want now?
With 1/3 of luxury purchases now taking place online, it’s up to brands to make sure their physical experiences are doing everything they can to build meaningful, long term connections with customers. Wellness, health and enrichment have become 3 new key interests when it comes to new notions of ‘luxury’.
This is clear to see with the overwhelming rise of brand ‘exhibitions’, artist collaborations and hospitality crossovers. Brand exhibitions are still a popular go-to in 2023, with brands like Louis Vuitton, Paul Smith, L’Oreal and Swarovski devising their own offerings. But will luxury retail in 2024 continue on the same trajectory?
Consumers don’t want to be talked down to, or being made to feel inferior or deflated by brand experiences – they want to feel valued, appreciated and not subordinate to the brand their patronising, which must be intimately considered when considering customer care both in and out of store.
With these insights in mind, its crucial for physical retail to continue to evolve their spaces in line with a new set of values and expectations when it comes to luxury. Intimate insight into growing audiences (and how they shop), and a structural overhaul of the traditional ‘luxury experience’ will be crucial for luxury brands looking to compete in 2024.
Looking to evolve your retail experience, or learn more about your customers?