Laura Exam Luxury Brand Management PDF

Luxury Brand Management Table of Contents {#table-of-contents.Overskrift} ================= [1. Introduction 2](#introduction) [Chapter 1 -- The Luxury Market 2](#chapter-1-the-luxury-market) [Chapter 2 -- From Brand to Branding 3](#chapter-2-from-brand-to-branding) [Chapter 3 -- The Brand Syst...

Luxury Brand Management Table of Contents {#table-of-contents.Overskrift} ================= [1. Introduction 2](#introduction) [Chapter 1 -- The Luxury Market 2](#chapter-1-the-luxury-market) [Chapter 2 -- From Brand to Branding 3](#chapter-2-from-brand-to-branding) [Chapter 3 -- The Brand System 4](#chapter-3-the-brand-system) [Chapter 4 -- Interbrand 5](#chapter-4-interbrand) [2. Luxury Brand Equity 6](#luxury-brand-equity) [Chapter 1 -- Identity Theory 6](#chapter-1-identity-theory) [Chapter 2 -- Kantar Brandz 9](#chapter-2-kantar-brandz) [Chapter 3 -- Brand Equity Model 9](#chapter-3-brand-equity-model) [3. Mix People: Gen Z 10](#mix-people-gen-z) [Chapter 1 -- Mintel (2023) 11](#chapter-1-mintel-2023) [Chapter 2 -- New Generations 12](#chapter-2-new-generations) [Chapter 3 -- Gen Y,Z 12](#chapter-3-gen-yz) [Chapter 4 -- Gen Z Horison Media 13](#chapter-4-gen-z-horison-media) [Chapter 5 -- Gen Z Snapchat generation, 2022 13](#chapter-5-gen-z-snapchat-generation-2022) [Chapter 6 -- Gen Z Behaviours and values 14](#chapter-6-gen-z-behaviours-and-values) [Chapter 7 -- European consumer sentiment 14](#chapter-7-european-consumer-sentiment) [4. Brand Extension/Collabs 14](#brand-extensioncollabs) [Chapter 1 -- Stretching models 14](#chapter-1-stretching-models) [Chapter 2 -- Luxury growth strategy 15](#chapter-2-luxury-growth-strategy) [Chapter 3 -- The brand extension 15](#chapter-3-the-brand-extension) [Chapter 4 -- The brand strategy 16](#chapter-4-the-brand-strategy) [Chapter 5 -- Collabs 16](#chapter-5-collabs) [5. From Flagship stores to digital platforms 17](#from-flagship-stores-to-digital-platforms) [Chapter 1 -- 2024 Retail Experience trends 18](#chapter-1-2024-retail-experience-trends) [Chapter 2 -- 2024 Luxury retail trends 18](#chapter-2-2024-luxury-retail-trends) [Chapter 3 -- The luxury store 19](#chapter-3-the-luxury-store) [Chapter 4 -- New challenges 19](#chapter-4-new-challenges) Introduction ============ **Evolution of the global luxury market**\ Game changing steps in luxury. 1. **Luxury goods companies continue their process of moving toward an environmentally responsible,** circular economy business model, pushed by customer demand and increasing regulations. 2. Recent **developments in digital technology,** including artificial intelligence (AI), machine learning, and the Internet of Things (IoT), may change the luxury market forever. Chapter 1 -- The Luxury Market ------------------------------ **What is Ahead for the luxury goods market?** Key Points - **The global luxury goods market is expected to increase** from US\$354.8 billion in 2023 to US\$418.9 billion in 2028, at a CAGR of 3.4%. (Statista, 2023) - In 2025, when the state of the luxury market is expected to **return to normal,** there will be **450 million luxury consumers worldwide**, 60 million more than today - This conjecture is mainly explained by of the middle class, particularly in Asia and more specifically in China. - Luxury market revival -- The increasing predominance of Millennials and Generation Z, (more focus on younger generation now) - The spending is increased and especially after covid -\> people want to do good things for themselves. **Luxury market  -- 9 segments** 1. Personal luxury goods 2. Luxury cars -- the most popular 3. Luxury hospitality 4. Fine wines and sprits 5. Gourmet food and fine dining (it was popular in covid because people preferred good wine and food) 6. High-quality design furniture and homecare 7. Fine art 8. Private jets and yachts 9. Luxury cruises **Soft vs hard luxury goods** - **Soft luxury goods** include apparel and leather accessories such as handbags. Most companies are selling soft. Soft luxury goods are based on fashion trends. - **Hard luxury goods** are long-lasting things such as jewels and watches. Every item of jewellery and watch in hard luxury is one- of-a-kind and meant to be timeless works of art **Types of segmentation** Traditionally, the luxury market is divided into two types of categories: - **"EXPERIENTIAL" LUXURY:** tourist resorts, cruises, hotels, wellness, gastronomy, restaurants, wines and spirits, designer furniture, automobiles, etc. - **"PERSONAL" LUXURY ITEMS AND GOODS:** fashion, leather goods, jewellery, watches, perfumes, cosmetics, etc. **Four Characteristics of Luxury** 1. **FAMILY BUSINESS HERITAGE:** The **brand's history** is proof of its power and ability to survive. Most brands/groups are part of family businesses and are managed as such (Arnault, the Pinault, Rupert families). They used to be a trusted reference for customers in a chaotic and uncertain world. 2. **ESSENCE OF CREATION:** Creation and management of creative teams are critical to its success. Maisons are recognized for their craftsmanship, creativity and excellence in high quality products. 3. **ESSENCE OF QUALITY** is durability: a luxury product is generally made to last a [long time] and may even, in some cases, be transferred to the next generation. 4. **RETAIL** (store/shops/internet) is a very important challenge, because the brand is where the brand meets its customers, also in the Metaverse. How the brand is presented for the consumers. Chapter 2 -- From Brand to Branding ----------------------------------- **Brand:** create value and it is a part of the differentiation. The way the products are presenting. **Branding:** the way they communicate the brand. **Marketing:** the action and how we are doing it. ***For Luxury companies brands are their primary source of competitive advantage*** **What is a brand?** - Differentiation, name, reputation, physical goods, services, experiences **Key Concepts** **Idea & image -- **Consider a brand as the idea or image people have in mind when thinking about specific products, services, and activities of a company, both in a practical (e.g. "the shoe is lightweight") and emotional way (e.g. "the shoe makes me feel powerful"). **Feelings --** It is therefore not just the physical features that create a brand but also the feelings that consumers develop towards the company or its product. **Physical + Emotional cues --** This combination of physical and emotional cues is triggered when exposed to the name, the logo, the visual identity, or even the message communicated. **Elements of branding** Branding can be achieved through the definition of the following elements: **Brand essence and core identity:** This includes the brand's purpose, vision, mission, values, and guiding principles. **Brand positioning** **Brand promise** **Brand identity:** For example, the brand's name, personality, communication style and tone of voice, visual identity design (including logo design, colour palette, typographies, etc.)  **Brand Management in practice** There are four levels of brand development: - **TANGIBLE PRODUCT** -- where products have some degree of competitive advantage such as performance or features - **BASIC BRAND** -- some degree of differentiation or unique position - **AUGMENTED BRAND** -- a number of additional products or services, and repeat purchase achieved - **POTENTIAL BRAND** -- customers are not willing to accept substitutes and are loyal to the brand. Chapter 3 -- The Brand System ----------------------------- **Brand system** *A brand is a name with the power to influence* **Brand concept:** Identity and position **Brand name:** Awareness, identification **Product or service:** Differentiation, brand extension **Brand assets:** an element that can produce benefits over a long period of time An asset is an element that is able to produce benefits over a long period of time. BRAND Intangible assets Emotional beliefs and bonds with the customers; Willingness to buy one brand more than its competitors\... Conditional assets Products and services; Profitable business model; Production facilities\....  Chapter 4 -- Interbrand ----------------------- **5 key elements of the strength of a brand** - Sustainability - Pricing power - Meaningful - Different -- the products differentiation - Salient The brand is the most valuable intangible asset a company possesses **A new canon of 5 imperatives** How can we recognize the brand: 1. **The Identification Imperative:** brand codes that are memorable and flexible, and that travel well across arenas. On a purely visual level, think **Tiffany's** blue. **Iconic shows up** 2. **The Asset Imperative:** The vision of what the business should look like. **Hermès** is a prime example of superb control of the entire customer experience, from supply chain all the way to communications, retail and beyond. The brand drives the business, as opposed to the business getting in the way of the brand. **Iconic delivers** 3. **The Experience Imperative:** strong brands meet expectations -- but the great ones shift them, creating a new normal. Netflix changed the paradigm of online entertainment by making all episodes of House of Cards immediately available. **Iconic engages** 4. **The Ecosystem Imperative:** use the power of data, technology and partnerships to become personal at scale. Louis Vuitton acts as Spotify was never just a catalogue, but a companion, helping the client find what matters to him/her. **Iconic is personal** 5. **The Leadership Imperative:** the business of business is no longer just business. If companies are today the most trusted type of institution, brands are the world's most powerful narratives. Brands are no longer expected to just to follow the rules, but lead on standards and influence the cultural zeitgeist, like Prada with its Contemporary Art Foundation. **Iconic shows leadership** Luxury Brand Equity =================== Chapter 1 -- Identity Theory ---------------------------- **Brand system** **The luxury brand's core** Fashion Premium Traditional Marketing Positioning Luxury Identity Haute couture High-end COHERENCE In luxury, we should not talk about positioning. Luxury brand are powerful identities able to reassure and seduce by the dream they create. **The luxury brand** cultivates its uniqueness.  **Brand Analysis -- What? How?** **Brand appearance** **Brand benefit** **Brand Competence** **Brand image/identity** Brand Analysis: What? How? What can the brand do? Functional product quality Design (ergonomics and aesthetics) Service quality What is the benefit or the brand? Functional benefit Psychological benefit Social benefit What is the brand\'s personality? What is tle brand? Role in the market HOW is the brand? ---y Characteristics Who the brand? Intentions, values Brand competence Brand benefit Brand image I identity Brand appearance How dæs the brand appear? Name, Logo, Cobr Packaging Presentation  **Brand Heritage:** *History, values, iconic products* Chanel is the example **Brand Identity Prism** Brand Identity Prism External facets BRAND PHYSIQUE (Material) colors, logos, and packaging. RELATIONSHIP MODE the engagement between a brand and consumers. CUSTOMER REFLECTED IMAGE the way in which customers see themselves in a particul brand CONSTRUCTED SOURCE CONSTRUCTED RECEIVER Internal facets BRAND PERSONALITY the traits of the brand in the --- --- %.tes ef\*heænsumer CULTURE (DNA and values) the culture and values of the brand\'s country of origin CUSTOMER SELF-CONCEPT refers to how a brand portrays its target audience. Source:Kapferer JN, Bastien V., The Luxury Strategy, Kogan Page Limited, 2009, 2012, second edition, p148 **External factors:** **Physique:** fundamental physical and tangible aspects that differentiate the company's products, their functional characteristics, colours, logo, and packaging. Being able to quickly identify a brand.   **Relationship:** connection between the brand and the consumer such that the consumer feels a relationship.   **Reflection:** The brand should reflect the profile of the target demographic (persona) so that consumers feel a natural fit between their lifestyle and the company's image.   **Internal factors** **Personality:** A brand is personified through marketing materials and communications.   **Culture:** Tying the brand to a specific culture or geography.   **Self-image:** Associating with a brand through the purchasing of its products. Chapter 2 -- Kantar Brandz -------------------------- **Kantar Brandz** -- Top 100 most valuable global brands - Europe, Middle East, Africa -- BRANDS AVERAGE AGE: 97 years old - NORTH AMERICAN BRANDS AVERAGE AGE: 45 years old **Branded business growth --** derives from three core 'building blocks': Meaningfulness, Difference, and Salience. **X3 factors: Brand Power metrics** **Brands with powerful connections are** **1. Meaningful** **2. Different** **3. Salient** **4 fundamentals** Brand Z has identified the four 'fundamentals' essential for running a strong branded business: 1. A range of well-designed products, that deliver a 2. great product experience, 3. Fitting into consumers' everyday lives easily, 4. All communicated effectively by the brand. **Pricing -- Differentiation- Sustainability**: The data suggests outsized benefits in today's business climate for brands that excel on pricing power and differentiation -- while continuing to meet evolving business standards around sustainability. Chapter 3 -- Brand Equity Model ------------------------------- **Key take aways** - **BRAND EQUITY** the **value** a company gains from its **name** **recognition**, enabling it to be the popular choice among consumers even when compared to a generic brand with a lower price point. - **BRAND EQUITY** is the price above the product's value that consumers are willing to pay to acquire the brand. Brand equity is an internally generated intangible asset in which its value is ultimately decided by consumers' perception of the brand. **Brand Equity Model**: Keller\'s Brand Equity Model (CBBE Model)  **From branding to brand equity** BRANDING Creating differences Added value BRAND EQUITY The value of the brand Mix People: Gen Z ================= Despite some additional growth projected from immigration through 2028, Gen Z will remain the fourth largest generation group, eclipsed by the continued growth of Gen Alpha (those born 2011-2025) In coming years, the spending of Gen Z and 'Gen Alpha' is set to grow some three times faster than for other generations until 2030, making up a third of the market.  - Not the greenest generation - Gen Z is probably the first global generation - Not everyone knows about Gen Z (even if there are Gen Z) - Snapchat generation 1. Gen Z expects brands to be drivers of social change and looks for fair labor practices, inclusivity, and sustainability. 2. There are several ways in which brands can create socially impactful content that focuses on how the people, environment and product are treated. 3. Diversity also came out as a big driver of societal impact for this generation --- whether in terms of values or ownership. **Understanding Gen Z\'ers**\ Gen Zers are an exceptionally diverse and complex group of people. 1. Gen Zers are **digital natives** 2. Gen Zers are **socially conscious** 3. Gen Zers are **unusually individualistic** 4. Gen Zers value **authenticity and transparency in the brands they support** Chapter 1 -- Mintel (2023) -------------------------- **4 facts brands need to know about Gen Z** 1. Gen Z is dissatisfied with the present 2. Gen Z is seeking a responsible financial future 3. **Mental health** is Gen Z's top health priority 4. **Gen Z wants to stand out -- with limitations (Nr. 4 is especially important for luxury)** **4 market opportunities Gen Z presents for brands** 1. Shift the focus (back) to **things over experiences** 2. Make **quality** the goal, not quantity 3. **Create immediate interactions with images and video** 4. Embrace virtual technology as adoption grows Chapter 2 -- New Generations ---------------------------- **The 4 luxury clienteles** Classifies the different categories of client depending of what they are waiting for.   AUTHENTICITY OF THE EXPERIENCE Beauty, excellence and uniqueness of the product (Hermés) CREATIVE NICHE LUXURY: Creative audacity, fashion brands (Balenciaga, Prada\...) SAFE VALUE AND PRESTIGE Timeless and international reputation. The safe choice. (Louis Vuitton) 2012, pp118\_119 OUTSTANDING BADGES Status brands Social position (Rolex) Sensitivity to the logo Kapferer, JN. Bastien,V. ,The luxury strategy, Kogan Page,   **Nr. 1** -- Chanel + Hermes **Nr. 2** -- Yves Saint Laurent **Nr. 3** -- value of brand. **Nr. 4** -- Yves Saint Laurent **Expanding customer base:** 500 million luxury consumers by 2030 **Luxury growth drivers:** - Chinese consumers - Younger generation Chapter 3 -- Gen Y,Z -------------------- Gen Y(millenials) and Z contribute to growth Chapter 4 -- Gen Z Horison Media -------------------------------- **Key Findings** 1. **ACTIVE:** Gen Zers are transforming into active participants, not just passive observers within their communities. 2. **ENGAGING IN STORYTELLING:** "They\'re actively co-creating, deeply engaging in storytelling, and forging strong bonds as they continuously shape and redefine their individuality across multiple subcultures every day. 3. **NO PRESSURE TO CONFORM WITH THEIR PEERS:** The study also showed the full embrace of individuality without the pressure to conform to their peers and that there is actually an opposite and equally strong pressure to stand out." Maxine Gurevich, SVP, Cultural Intelligence of Horizon Media\'s WHY Group, the agency\'s intelligence centre of excellence. - Successful marketing to Gen Z will be addressing subcultures that address unique and personalized interest that can sometime be at odds with each other. - Subcultures are the new demographics as members of this generation connect and respond to the things they are most **passionate** about. - Horizon Media identified **five categories** --- and 12 subcultures within them: 1. GAMING, (Gucci) 2. ENTERTAINMENT, 3. EDUCATION, 4. FASHION, 5. BEAUTY - The increasingly influential gen Z has a growing hunger for **niche interests** and **like-minded communities.** - **Social media culture is culture for gen Z** Louis Vuitton, which appears to be the most influential luxury brand of the year **Pinterest and luxury** Pinterest is especially keen to attract luxury labels, placing the emphasis on the growing number of Gen Z users Pinterest has identified among its users an **"audience for luxury"** Chapter 5 -- Gen Z Snapchat generation, 2022 -------------------------------------------- Gen Z likes brand logos (ex the brand logos show the personal identity, agree with what the brand stands for) **7 Strategies for Tapping into Gen Z's Spending Power** 1. **Understand the Snapchat user experience** 2. **Embrace creativity and authenticity** 3. **Integrate Personalization** 4. **Leverage influencer marketing** 5. **Harness the power of storytelling** Storytelling is a powerful tool for capturing Gen Z\'s attention and fostering emotional connections 6. **Gamify the experience** Gen Z loves gamification and interactive experiences. 7. **Emphasize social responsibility** Chapter 6 -- Gen Z Behaviours and values ---------------------------------------- **Gen Z values** - Well-being - Prioritizing their relationships with others - Having fun have moved to center stage for them Chapter 7 -- European consumer sentiment ---------------------------------------- - Most European consumers remain wary about the economy, but their sentiment is improving slightly. - **Standing out:** Gen Z set themselves apart as unique individuals - **Under the influence:** Gen Z are more attuned to social media -- influence their purchase - **Factors in purchasing:** 1. Health/environment 2. Authenticity 3. Diversity, equity and inclusion. 4. Brand Extension/Collabs ========================== Chapter 1 -- Stretching models ------------------------------ **Brand stretching and brand extension** refer to strategies where a brand leverages its existing reputation, values, and consumer trust to expand into new product categories or markets. - **Louis Vuitton luxury ping pong set**. - Distinction between the terms lies in how far the brand moves from its core identity **Brand extension** usually involves a logical connection or adjacency to the original product line. **Brand stretching** often explores entirely new markets or categories, pushing the brand further from its origins. **Vertical strechting (pyramid model):** Extending the brand by moving **upward** or **downward. Top:** unique **Bottom:** market (mass). Ex Dior **Orbital stretching (galaxy model):** Extending the brand across **multiple lifestyle sectors** (e.g., fashion to home decor) keeping the same brand image. Ex Ralph Lauren **Streching down-up:** The strategy ensures brand visibility across different market levels, balancing mass appeal with luxury exclusivity. - **Downward Stretch:** Made the brand accessible to mass markets. - **Upward Stretch:** Enhanced exclusivity and brand prestige. **French extension**: French luxury brands build their product portfolios with a clear hierarchy. Describes how French luxury brands, such as Dior, expand their offerings while maintaining prestige and exclusivity. **Italian extension:** The Italian model grows thorugh extension in the core business of clothes. Brand extension comes later. Many labels and sub-labes. **American extension:** focus on strategic alliance with deparment stores. **Lifestyle identity** that consumers can buy into (Ralhp Lauren) Chapter 2 -- Luxury growth strategy ----------------------------------- **Ansoff's Matrix: analyzing and plan growth strategies.** **Growth oppportunities:** 1. **Market penetation:** Sell more of the **current** produtcs to the **current customers** 2. **Product development:** Sell **additional** products to the **current customers** 3. **Market development:** Sell more of the **current** products to **new customers** 4. **Diversification:** Sell **new** products **to new constumers** Chapter 3 -- The brand extension -------------------------------- **Brand extension:** A new product in a different category A big part of the luxury market is brands that have grown through moving **out of the origin sphere** **Expanding Brand Awareness:** - Identifying additional or new usage opportunities - Identifying new and completely different ways to use the brand **Brand reinforcement:** strategy used to ensure customers remember the brand, associate it with its values, and develop loyalty. - **Expanding Brand Awareness:** Make the brand more recognizable and familiar to new and existing customers (Barbie Movie Visual) - **Improving Brand Image:** Build or enhance the brand's perception to remain relevant and desirable (Chanel Surfboard Ad) **Existing vs. new products** **Brand Name:** Whether the brand name is existing or new. **Product Category**: Whether the product is an existing or new offering. **Line Extension** *(Existing Brand Name, Existing Product Category):* - Extension within the same category. Expanding an existing product line by introducing variations (e.g., flavors, sizes, or styles) under the same brand. **Brand Extension** *(Existing Brand Name, New Product Category):* - Extension in a different category. Leveraging an established brand name to enter a new product category. **Flanker Brand** *(New Brand Name, Existing Product Category):* - Launching a new brand to target a different market segment within the same product category, often to capture more market share or compete with rivals. **New Product** *(New Brand Name, New Product Category):* - Creating an entirely new product and introducing it with a new brand name. Existing vs new products Product category Existing Line Existing Extension Flanker New Brand New Brand Extension New Product Chapter 4 -- The brand strategy ------------------------------- **The brand strategy:** **Brand Extension:** - **Horizontal Brand Extension:** Extending the **same brand** to a **new product category** - **Line extension** - **Category extension** - **Vertical Brand Extension**: Extending **the same brand** to a **different quality or price level** in the same product category. - **Up scale** - **Down scale** **Cross-Segments Strategy:** Brands crossing traditional boundaries to compete in multiple sectors (e.g., blending fashion and sports). Chapter 5 -- Collabs -------------------- The star strategy (of collabs)  **Examples of collabs** - **Collab -- 2024: Marc Jacobs x Friends:** Leveraged iconic pop culture for emotional connection. - **Collab -- 2024: Supreme x Maison Martin Margiela:** Appeals to both high fashion enthusiasts and urban youth culture. - **Collab -- 2024: FENDI x FRGMT x POKÉMON**: Incorporates nostalgic elements for millennial and Gen Z audiences. - **Collab -- 2023: LOEWE x Studio Ghibli (Hayao Miyazaki):** Features hand-painted leather pieces, embroidered details, and whimsical motifs. - **Collab -- 2022: Dior x Technogym:** blending Dior\'s high fashion sensibility with Technogym\'s luxury fitness equipment - **Collab -- 2020: Dior x Jordan:** combining Dior's elegance with Jordan's basketball heritage. 5. From Flagship stores to digital platforms ============================================ **From Flagship stores to digital platforms** - New trends with cutting-edge technology to entice a younger clientele. - AI is reshaping the retail trends in 2024 with personalized shopping, sustainability, and the rise of mobile commerce. - In 2024, consumers now seek seamless experiences. **Clarkston 2024 -- Industry trends**: The luxury retail industry is expected to grow more than 3% per year from 2024-2028. - Retailers must also respond to emerging trends, like second-hand markets and a push for digital transformations - increased desire of customers for a **luxury experience**-- not just a luxury product. **Retail Trends 2024** *Cegid 2024* 1. **MOBILE** is becoming the preferred personal shopper and training tool for store staff. 2. **THE PAYMENT ECOSYSTEM** will continue to evolve -- digital wallets and contactless payments 3. **ENVIRONMENT**. Consumers care more about the environment and seek value for money, so second hand and renting. 4. **SECOND-HAND GOODS**: Consumers increasingly prioritize sustainability.  5. **GEN Z.** A shift in the retail landscape, and at in this transformation lies the Generation Z. 6. **UNIQUE VALUES AND ASPIRATIONS.** Distinct from their Millennial predecessors, Gen Z possesses unique values and aspirations that demand the attention of specialty retailers. 7. **\$143 PER MONTH.** Gen Z spends an average of \$143 per month, with 67% of their budget allocated to personal care, clothing, and food. 8. **IN-STORE EXPERIENCE.** Contrary to the assumption that online shopping dominates, a substantial portion of Gen Z values the in-store experience. Chapter 1 -- 2024 Retail Experience trends ------------------------------------------ **Role of Technology**: - Retail has evolved with technologies enhancing convenience, personalization, simplicity, and engagement. - AI-driven solutions like virtual try-ons provide tailored experiences for customers. **AI-Driven Personalization**: - Tools like skin analysis and shade finders improve product recommendations and engagement. **Seamless Omnichannel Experiences**: - Integrates online and offline shopping for a unified customer journey. - Helps consumers research online and purchase in-store or vice versa. **Sustainability and Ethical Practices**: - Consumers prefer ethically sourced and manufactured products. - AR and AI technologies reduce waste and minimize carbon footprints by replacing physical samples. **Example:** MAC\'s Virtual Try-On Chapter 2 -- 2024 Luxury retail trends -------------------------------------- Clarkston Consulting (2024) - **Trend \#1: Younger Consumers Redefining Luxury Retail:** While millennials still dominate the market, Gen Z is also increasingly entering the spotlight. - **Trend \#2: A Shift from "Things" to Experiences:** This may include pop-ups, activations, and even partnerships with events such as award shows and festivals. - **Trend \#3: The rise of cultural capital as an asset:** Collaborations with influential figures (e.g., Pharrell Williams) enhance a brand\'s social and cultural reach. - **Trend \#4: Companies investing in secondhand retail:** Growth of resale markets, with programs like Rolex's Certified Pre-Owned initiative. - **Trend \#5: Luxury retailers and the digital transformation:** The rise of AI and chatbots enabling tailored customer experiences and omnicha nnel strategies (Across All Channels). - **Trend \#6: Customer-centric focus:** Importance of personalization, loyalty programs, and the strategic use of physical stores alongside mobile technologies. - **Trend \#7: Shift to sustainable growth vs. Rapid growth:** Increased consumer demand for sustainable practices, with brands leveraging AR and AI to reduce waste. - Increasing demand for sustainability - AR and AI are among the top technologies allowing brands to operate more sustainably. Chapter 3 -- The luxury store ----------------------------- **Variety of luxury stores** - **FREE-STANDING STORES**: Having direct access to a street or a shopping center (Mall, airport) - **FLAGSHIP STORES**: The biggest, most impressive stores, located generally in the brand's home city - **SHOPS-IN-SHOPS / SHOPS-IN-STORE BOUTIQUE**: Individualized stores within a department store (Le Bon Marché). - **CORNERS**: In department stores in a space that is more or less open. - **SALE IN MULTI-BRAND:** individual stores or store chains. **Retailing Concepts**: Insights into customer expectations, emphasizing atmosphere, service quality, and unique shopping experiences as key factors. **The physical point of sale (POS)** can value the social dimension of shopping. **"Workation\" Trends**: merging of business travel and leisure activities, influencing luxury shopping trends, particularly among tourists. **Global Retail Expansion**: Examines strategies for targeting \"trending locations\" and expanding into new markets like second-tier cities or emerging hotspots. **Saturation and Competition in Luxury Markets**: References shifts in shopping networks and investments in prime real estate by brands like Louis Vuitton, Dior, Gucci, and Saint Laurent. **Innovative Retail Experiences**: Examples include Dior\'s concept stores and interactive spaces, Burberry\'s social-media-focused store, and luxury pop-ups by various brands. Chapter 4 -- New challenges --------------------------- **Fundamental shifts**: Changing customer expectations, social and environmental concerns, and geopolitical events fundamentally shift how luxury retailers must operate. **New paradigm**: To thrive in this new paradigm, luxury brands must rewrite the story of who they are and how they interact with their consumers. **New expectations:** Sustainability, purpose, and ESG visibility are now expectations **Industry Innovations:** - **Patagonia Resale Model:** Inspires luxury brands to embrace secondhand markets. - **Kering's Triple-A ESG Rating:** Acknowledges leadership in sustainability. - **Kering's Investment in Vestiaire Collective:** Drives growth in secondhand fashion. **Important Terms** - **ESG:** Environmental, Social, and Governance - criteria for ethical brand operations. - **Purpose-Driven Brands:** Companies that align products with organizational values. - **Resale Market:** Selling pre-owned items, reducing waste and promoting sustainability. - **Secondhand Economy:** A growing market for used luxury goods