May 21 2013
|Keeping up with the rapid changes of today’s various industries can be difficult for executives, even those working in that specific industry. The "Fast Executive Trends" series provides industry-specific trends and recommendations for executives both inside and outside of that specific industry. This post covers the projected trends in the luxury consumer products industry and how industry players can alter their strategies for a successful 2014.|
Luxury Expanding Worldwide
The global luxury market saw strong growth in 2012 and is expected to grow by 10 percent in 2013, according to business consulting firm Bain & Company. This growth represents a combination of the moderate U.S. and European market growth and the strong performance in China and Latin America. This industry has been quickly expanding since 2009 in both the U.S. and China, which is positive news for executives who understand the modern luxury consumer.
What Do Luxury Consumers Want?
In a nutshell, luxury consumers want their brands to go above and beyond for them. According to The Affluence Collaborative, 34 percent expect customized products and services. Companies should also find ways to stand out as a distinct competitor in their category, since 32 percent already expect this from their favorite luxury brands. Lastly, customer service is becoming exceedingly important for all brands, but even more so for luxury brands where consumers spend so much more money for each product. 32 percent of these customers expect to be surprised and delighted through once-in-a-lifetime luxury brand experiences.
Strategies for a Successful 2014
Luxury brands will continue to prosper next year if they begin to implement the strategies listed below (if they have not already).
Embrace Mobile: According to The Affluence Collaborative, 57 percent of the wealthy enjoy using the latest gadgets and being in the know about new technology, compared to only 18 percent of the general population. This means that your business strategy needs to include an advanced eCommerce mobile site that will help your company stay ahead of competitors in its category. Brands need to be creative with the implementation and think about the brand experience. Simply creating a mobile app or site will not be enough to grab customers’ attention.
Stay Transparent Online: Companies can no longer control the message consumers are hearing about their brands. This is not necessarily a bad thing, but it does mean companies need to adjust their social media and PR strategies to show the authentic opinions of their customers. Bad reviews and negative comments should not be ignored, but should be responded to quickly and positively. Likewise, positive reviews and comments should be rewarded through a brand ambassador program.
Focus on Scalable Markets: Analyze the contributions each store location is making to your company and exit those that are not adding value. For example, many luxury brands are exiting India because of its lack of premium retail space. There is no need to have retail locations in non-profitable locations, but that market could still be viable online or through mobile.
Customize the Brand Experience: An obvious way to do this would be to simply offer a literal product customization, but customers expect more than that from a luxury brand. These brands need to think about “how can I customize the brand experience?” This strategy will provide two benefits in one through offering customization for customers, while also helping the brand stand out from competitors.
Optimize Customer Service: The number one differentiator of a luxury brand should be delightful customer service. Whether the customer is visiting a company store or speaking to a representative on the phone, she should feel like she is talking to a once-in-a-lifetime luxury brand—your brand.
What specific industry should we cover next in the Fast Executive Trends series? Let us know on Twitter @BlueSteps or on LinkedIn.
|This article and series was written and created by Julia Salem of the Association of Executive Search Consultants (AESC).|
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