What’s Next for the Luxury Industry? 7 Trends Identified
Preparing for a year of tumult, Luxury Daily and Unity Marketing surveyed experienced luxury insiders to gain insights into what marketers can expect in 2017 with geopolitical issues, customer acquisition and retention challenges, media and marketing shifts, and, most important, evolving consumer consumption patterns affecting products and experiential offerings.
In the first-of-its-kind study, Luxury Daily and Unity Marketing surveyed more than 600 luxury industry executives to understand the trends shaping the future of the luxury market from an industry insiders’ point of view.
Luxury industry insiders predict prospects for growth in 2017
The results, published in a new study entitled State of Luxury 2017: The Insider View, gives a bird’s-eye view of the luxury industry today, its challenges and opportunities, and where it is headed in the future.
“The luxury industry is changing, and nobody knows it better than the players in the industry, both the brands and retailers that compete in the luxury market and the companies that provide support services to those brands,” said Mickey ALAM KHAN, editor in chief of Luxury Daily, the world’s leading luxury business publication.
“That’s why we worked with Unity Marketing, a research firm specializing in the luxury market and affluent consumer segment, to take the pulse of the luxury industry in a formal research study,” he said from his New York base.
The survey, conducted online August and September 2016 with Luxury Daily readers and the Unity Marketing database, included samples of three key industry insider segments:
- Luxury goods marketers and retailers (47 percent)
- Suppliers of goods and service to luxury companies, such as advertising, media and consultants (34 percent)
- Luxury experience and service marketers, such as travel, hospitality and real estate (14 percent)
Throughout the report, the results are analyzed from each players’ unique perspective. That enables industry participants to draw conclusions about how the research findings impact their own businesses.
“The biggest challenges to growth for the luxury goods and service marketers surveyed are how to find new customers for their brands, how to sell to customers less willing to spend, and the growing threats from competition,” Mr. Alam Khan said.
The results reveal that the past year has been a challenging one for luxury businesses. Yet the executives surveyed believe their companies have strategies to respond to the shifts in the market that will enable them to overcome the headwinds they have faced.
The insiders have ambitious goals for 2017 and expect to do better over the next twelve months, with plans for more strategic and effective advertising and marketing.
Luxury industry advertising and marketing trends
Advertising and marketing spending trends are a leading indicator of the health of the luxury industry. This survey shows that luxury insiders are planning a more proactive stance on marketing and advertising to engage consumers in 2017 as compared with 2016.
Overall, half of those surveyed plan to spend more in 2017 than in 2016, a significant shift from last year.
“Further, there is a significant 5 percentage point drop in the number of luxury industry insiders that plan to spend less in 2017,” said Pam DANZIGER, president and founder of Unity Marketing. “This finding bodes well for companies that serve the advertising and marketing needs of luxury goods and service marketers.”
Seven key trends shaping the future of the luxury market identified
“This study uncovered seven key trends shaping the future of the luxury industry,” Ms. Danziger continued. “The most profound of which is the very definition of ‘luxury’ is shifting in the minds and lifestyles of the customers we serve. It requires equally dynamic changes in the strategies we use to market and manage luxury businesses.”
These seven key trends that can make, or break, future prospects for the luxury industry and the companies competing in it:
- What defines luxury is changing
- Internet and social media impacts
- Dramatic consumer shifts
- Competitive pressures
- Political turmoil
- Globalization
- Demand for innovation
Job prospects bright in luxury industry
One notable finding in this study is that luxury industry insiders identify a vital need for better trained and experienced professionals resulting from the many changes, challenges and opportunities blossoming in the luxury industry. This suggests that professionals with education and experience in the industry may find new employment opportunities over the coming year.
“Companies operating in the luxury industry, the very foundation of which is to provide the best and most exquisite things and experiences to the most discerning and empowered consumers, first and foremost need the best and brightest personnel – the industry’s human capital – to prosper,” Ms. Danziger said.
About Luxury Daily
Luxury Daily is the world’s largest luxury business publication. It is part of Napean LLC, a New York-based publisher whose portfolio also includes the Luxury FirstLook, Luxury Roundtable and Luxury Retail Summit conferences and the Luxury Daily Awards. Mickey Alam Khan is founder and editor in chief.
Web address: LuxuryDaily.com. Contact: mickey@napean.com
