Luxury Goods: How is Digital Shaping the Industry

November 2019

Digital technology has led to major shifts in how luxury consumers live, work, shop and play. Digital advances continue to influence how these consumers behave both inside and outside the merchant environment, whilst simultaneously giving key players the tools they need to enhance the customer service and engagement process. This report explores some key elements that define connected consumers, and shares insight on how luxury players are keeping up with them.

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Key findings

Digital has emerged as a key driver reshaping luxury commerce

Technological advances will continue to influence how luxury consumers browse and buy both luxury goods and services inside and outside the merchant environment. Technology plays a pivotal role in consumer decision-making and the ability of businesses to meet the needs of today's consumers.

Developed markets lead in digital commerce across the luxury goods landscape

Developed luxury goods markets have historically seen higher digital penetration, due to robust fixed-line networks. However, emerging markets with strong mobile phone networks have witnessed higher growth in digital spending in recent years, thereby bridging the gap with the developed world.

Digital technology used to get inside the minds of affluent luxury consumers

Big data and technology are paramount to understanding the needs of the affluent consumer. As data and technology become more sophisticated, there is a shift from profiling consumers by targeting demographic groups based on traditional ideas about luxury to psychographic profiles based on personal lifestyles.

Disruptive technologies offer significant growth prospects for the luxury market

Digital technology has created massive upheavals in consumer expectations, lowered the barriers of entry for fast-moving companies and inspired new digital-first business models. The luxury retail and service sector is increasingly using new technologies to enhance the consumer experience.

Digital technology used to strengthen person-to-person customer service

The expansion of digital has created a craving for authentic, genuine and trustworthy human connections. Luxury consumers are looking for brands to add real value to their lives. More companies are using digital technology and super apps to deploy more personalisation efforts to cut through the noise and offer better client service.

Luxury consumers are no longer pure followers

Connected consumers no longer feel compelled to be online all the time. More and more they are looking for a heightened sense of digital awareness that will enable them to establish a more healthy and digitally balanced lifestyle.

Introduction

Scope
Key findings

The Digital Luxury Landscape

A majority of the world’s population are connected
Digital has been one of the most transformative innovations in luxury
Digital remains the fastest growing channel in personal luxury goods
North America and Western Europe clearly lead in luxury digital sales
Super apps become more pronounced with the need for human contact
Burberry’s innovative technology goes “back to basics” in customer care
Future consumers will be mobile-first
Affluent consumers drive the shift to m-commerce purchases

How Disruptive Technology is Reshaping Luxury

Digital sales of luxury set to continue its growth trajectory
The power of s-commerce in luxury goods
Omnichannel shopping will become the norm in luxury retailing
More digitally native luxury retailers expand into bricks-and-mortar
Hodinkee watch company to introduce a bricks-and-mortar retail space
What is next for the digital luxury consumer

Outlook

Disruptive technologies: a force to be reckoned with?
Artificial intelligence will impact luxury commerce in a variety of ways
Land Rover introduces disruptive technologies into its new SUV models
Blockchain set to make inroads in luxury?
De Beers Introduces its own blockchain platform to fight sustainability
Asia Pacific already pioneering biometric facial recognition in luxury retail
Agilisys introduces facial recognition to its rGuest Stay solution
Technologies set to impact businesses the most in next five years
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