If luxury fashion brands and retailers hope to remain competitive in today’s ever-changing consumer landscape, they’ll need to focus their efforts on staying current with technology. That was the message in a new report from U.K.-based consultancy Deloitte Touche Tohmatsu Ltd., which assessed the state of the luxury market and its biggest growth opportunities.
The study noted that the high-end sector has been performing well in spite of inconsistencies in global currencies and other headwinds. In fact, DTTL estimated that the 100 largest luxury-goods companies had a total of $214.2 billion in sales in the fiscal year ended June 2014.
But customer behavior is evolving at a rapid pace as global consumers become increasingly mobile and as young, tech-savvy generations enter their earning years. Companies will need to keep pace with technology, which is becoming more and more integral to the shopping experience, not only in terms of e-commerce but also the acquisition of knowledge.
“The luxury sector needs to continue to forge a strong relationship with an ever-increasing array of technologies as it continues to influence the value chain,” Patrizia Arienti, leader of the DTTL EMEA Fashion & Luxury group, said in a statement.
This does pose a challenge since high-end brands must balance the desire to connect with consumers with the need to protect their brand identities. For instance, the DTTL report cited social media as carrying one of the highest risks of diluting a company’s reputation. In response, Arienti recommended that “brands to move carefully to ensure sustainable, long-term value creation.”
If done carefully, embracing the digital realm could enable companies to reach a vital audience: millennials, who are expected to make up 75 percent of the global workforce by 2025.
DTTL estimates that 58 percent of that generation goes online to gather information about luxury brands, and 31 percent use social media as a resource. That compares with 10 percent of older consumers.