|At the start of each year we speak with some of the most prominent global leaders in the premium and luxury space, across key sectors such as wealth management and finance, automotive, luxury fashion retail, cosmetics and fragrance, and travel and hospitality, to understand how they view their industry’s prospects, what their focus is going to be for the coming year and what keeps them awake at night.
These key insights are then analyzed by our team of data scientists and released in the annual Agility’s Luxury Leaders Study. We recently presented the study findings during a closed door webinar session attended by clients and industry practitioners eager to understand how their peers are planning for the inevitable rebound, now that the vaccination campaign is in full swing across the globe.
2021 OUTLOOK IS OVERALL POSITIVE
Most leaders in the premium and luxury space told us that while 2021 will be a better year than 2020, we are not yet out of the woods. A significant number believe that the luxury industry will need to adapt to a “new normal”, where consumers are still cautious and tentative. More than half of the leaders we spoke to believe that the full recovery will happen “later than 2021”.
KEY THEMES FOR 2021
While in 2020 the focus was on cost efficiencies, reorganization and maintaining market share, 2021 will be about rebuilding and increasing revenues. Three big themes loom large on the luxury leaders’ agenda:
Most leaders will be focused in 2021 on rebuilding their team morale and driving performance, making sure that they have the confidence and stability to take advantage of the rebound. This is particularly true in the retail space, where brands that weathered the pandemic downturn best are those who built strong loyalty through a proactive and engaged sales force.
It will become ubiquitous for sales representatives to connect with clients both inside the boutique and outside via digital platforms. Retail brands’ sales force will require new skill sets, including the ability to foster relationships, provide clients with more value and deepen clients’ emotional connection with the brand.
2. Customer Centricity
To execute a perfect strategy, brands will need to move away from internal processes and product focus, competing on customer centricity instead.
In the “new normal”, where service is now key and interactions are even more personal, CRM, customer relationship management, becomes essential to capture and develop customer loyalty.
As the CMO of one of the most prestigious wines & spirits brands told us: “there is a massive acceleration of e-commerce, digital and apps in China. My focus this year will be building a global data system – joining all the dots – from Tmall data to social media data and insights to better understand the Chinese consumer.”
Most luxury leaders realize that nowadays digital is more than just ecommerce and affects all customer’s brand touchpoints. In fact, most luxury leaders believe that the most important technology to impact their business in 2021 is not ecommerce, but data science and analytics.
Luxury leaders recognize that sustainability, particularly eco-friendliness, is an important topic for their customers and brands need to invest in the area, yet not all believe that the investment adds to their bottom line. Half of them believe that sustainability impacts brand positioning, but does not help generate revenues. In other words, customers expect brands to be good global citizens, but are not necessarily willing to pay more for it.
THE REBOUND WILL BE DRIVEN BY HNWIs AND UHNWIs
Luxury leaders understand that the pandemic is a paradigm shift for most brands. While in the past most brands extended their reach to affluent and mass affluent, they are now refocusing on HNW and UHNW consumers, who are emerging from the pandemic stronger than ever.
LUXURY’S MYSTIQUE IS ALIVE AND WELL
As the CEO of a luxury skincare brand told us: “After the pandemic, we are starting a journey to rediscover the meaning of luxury. Empowering!”. We at Agility share her feelings; the silver lining from the Covid-19 slow-down is that it has forced an industry too focused on growth and profits to stop and think again about what makes luxury unique and treasured in the eyes of the consumer.
We look forward to continuing our work this year with our amazing clients across a spectrum of industries, from fashion to fragrances & skincare, from hospitality to luxury automotive, from premium wines & spirits to financial services, to help you better understand your affluent consumer’s needs, preferences and aspirations on this journey into the new normal.
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