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Nine global trends affecting the luxury industry

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Luxury brands have an inclination to control all aspects of their offers, from product design to after-sales. These days, however, may be coming to an end.

According to Deloitte’s Global Power of Luxury Goods 2014 – In the Hands of the consumer report, the internet has affected the luxury industry dramatically, by giving the consumer more control.

The number of internet users across the globe has increased by 676.3 per cent from 2000 to 2014, according to Internet World Stats. These numbers have prompted luxury brands to come up with new ways to keep control.

According to Deloitte, the following are the nine global trends that are affecting the luxury industry:

–          Ubiquity versus exclusivity: With e-commerce now the fastest-growing retail channel, accounting for up to 20 per cent of a retailer’s or brand’s total volume, according to Deloitte, luxury brands are now expected to offer an interactive, exciting and efficient shopping experience both online and offline

–          Social media: Luxury brands now have the opportunity to introduce new products globally through a social platform. With consumers spending much of their free time on social media, luxury brands must make sure to interact with their clientele

–          Omnichannel: The internet has radically altered the path to purchase with shoppers now moving back and forth from online to store visits. According to a Deloitte study, during the 2013 holiday season, omnichannel shoppers spent 76 per cent more than store-only shoppers in total

–          Globalisation: Emerging markets such as Asia Pacific, Latin America, the Middle East and Africa accounted for nine per cent of the luxury market in 2008, according to Euromonitor, but this figure has jumped to 19 per cent in 2013 and is expected to grow to 25 per cent in 2025, as a result of urbanisation and economic development

–          Tourism’s support of sales: In a number of countries around the world, including the UAE, France and Italy, tourism is one of the main sources of luxury sales

–          Democratisation: The luxury market is being affected by globalisation and information, Deloitte’s research explains. According to the report, exclusivity is being replaced with mass availability

–          Fast fashion: The problem with the fashion world today is that consumers want products here and now. Companies now have the ability to produce designs faster than the originators and bring them to the marketplace

–          Custom and bespoke initiatives: Luxury consumers want bespoke products. By luxury brands offering these services, demand, traffic and client involvement have increased for brands within the industry

–          From communication to conversion: Brands are increasing their focus on how big data can increase conversion and on enticing global consumers, the report explains

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