The study is the result of a global analysis on luxury goods for personal use, taking in consideration the annual reports of the companies, trade journal estimations, industry analyst reports, business information databases and press interviews.
The analysis shows that the luxury goods industry is facing a new typology of customers, the HENRYs (“high earners not rich yet”), who are aged on average 43, are digitaly savvy and big spenders, in particular the Millennial HENRYs. Also, the study underlines that Millennials, Gen X and Baby Boomers view quality, customer services, design, craftsmanship and product exclusivity as the most important attributes of luxury brands when making purchasing decisions, followed by brand heritage and history.
“In an age of fast changing trends, luxury goods companies are caught between satisfying their customers’ rising demands and the effort to protect the uniqueness and exclusivity of their products. As the study reveals, these brands focus on interacting with the new age consumer and to this end they collaborate with niche bloggers and influencers who advocate the brand within their communities through regular and consistent posts, optimized content over the platforms and emphasized aspirational charateristics of the brands,” says Oana Buhaescu, Audit & Assurance Director, Deloitte Romania, and leader of the retail industry.
The study also provides some examples of this approach. For instance, Gucci has capitalized on the opportunity of engaging with HENRYs through its industry-leading digital initiatives such as the #GucciGram campaign where the brand collaborated with Instagram artists. Also, Montblanc initiated a collaboration with fashion bloggers on one of the biggest social media platform in China, Weibo, who acted as the brand’s promoters in their communities.
As far as data analytics and business intelligence tools are concerned, the study points out that luxury brands use these tools in order to derive customer insights, understand trends and developments, design marketing campaigns and optimize the services they offer. For instance, Shiseido made a number of US-based technology-related acquisitions which lets customers scan their unique skin tones through a mobile app and uses the data collected to blend a matching custom foundation for each consumer.
Moreover, the study emphasizes that data privacy laws limit the extent to which luxury brands can provide the customized shopping experiences that customers expect.
“Finding the right balance between personalization and privacy commitments is a challenge for the luxury brands. Despite the difficulties in determining an appropriate legal basis for profiling, targeted advertising, loyalty programs and other marketing activities, using data analytics can become a competitive advantage for these players if a strong and structured approach is applied, including data mapping, monitoring the processes, creating a user-friedly experience and selecting the right suppliers,” says Silvia Axinescu, Senior Managing Associate, Reff & Associates, the law firm representing Deloitte Legal in Romania.
The report is based on publicly available data and evaluates the performance of luxury goods across geographies and product sectors. It also provides key trends shaping the luxury market. Results are available here.
Deloitte provides worldwide audit, consulting, legal, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500 companies through a globally connected network of member firms in more than 150 countries and territories bringing world-class capabilities, insights, and high-quality service to address clients' most complex business challenges. Deloitte's goal is to make an impact that matters through its more than 312,000 professionals.
Deloitte Romania is one of the leading professional services organizations in the country providing, in cooperation with Reff & Associates, services in audit, tax, legal, consulting, financial advisory, risk advisory, business processes and technology services and other related services with more than 1,700 professionals.
Please see www.deloitte.com/ro/about to learn more about the global network of member firms.
© 2019. For information, contact Deloitte Romania