Technology Helping Luxury Fashion Brands Cope with Changing Industry
Luxury fashion brands are finding that they can no longer simply sail through the retail world and collect profits on the basis of their name alone. Even though global luxury consumers have tripled in the last two decades, the face of these consumers has changed significantly. Ten million new consumers enter the luxury market each year, but there is currently a shift from generally affluent consumers to a more diverse set of shoppers.
The only way luxury brands can capitalize on this new breed of shoppers is by adapting their consumer strategies—through technology. More than half of luxury’s shopper base shifts between luxury and more “premium” sales, such as beauty products, small accessories, and designers’ second lines. Meanwhile, 45 percent fall into the category of more traditional luxury customers who regularly buy luxury goods of all varieties.
Political instability and an economic slowdown in markets like the Middle East, Russia and China are causing luxury brands like Chanel, Burberry, Louis Vuitton and Prada to take a big hit, and this slowdown does not show signs of letting up any time soon.
Digital Chips, RFID Tags Part of the Technology Transformation
At the same time, retail is becoming an increasingly complicated beast to tame, with technology opening up a lot of doors – if it is harnessed properly. One way these brands can meet their diverse customer base’s increasing demands is by offering personalization, and digital chips and RFID tags look set to play a starring role in this endeavor.
Burberry has already started using digital chips that open up custom content in its coats and bags in hopes of convincing customers to make preorders as soon as these items hit the catwalk. The RFID tags placed in garments can activate mirrors in changing rooms and show videos and display other content relating to the clothing a person is trying on, for example.
NFC, locationing and Bluetooth tags are also being used to help improve shoppers’ experiences and help retailers note increased customer satisfaction. It is precisely by connecting with shoppers in this way that luxury brands can make consumers feel good about their purchases even as the industry undergoes a period of transformation.