The future is bespoke for luxury

The rising perception of luxury will have a lasting effect on the retail landscape.

The effect of the economic downturn on discretionary spending has been well documented, with many reports finding consumers tightening their belts while they ride out the financial tsunami. But boosted by a surge in first half net profits by the likes of Richemont Group and Burberry, it appears that the demand for luxury goods has picked up after a lacklustre 2009.

In a recent KPMG study on luxury trends and attitudes in mainland China released in May 2010, over one-third of participants expect to spend less on luxuries due to the recession, but most of these said they would rather spend less on brands perceived as more luxurious than switch to cheaper brands (KPMG, Luxury Extends its Reach across China).

The Rising Perception of Luxury

The report suggests that the rising perception of luxury is one factor in consumers’ attachment to certain brands. Creating strong brand message and image that customers can relate and aspire to, alongside providing an engaging retail experience is one way to develop this loyalty.

Over the past five years in Asia-Pacific, we have seen our members tastes develop and they now seem to have a greater preference for bespoke experiences and items. The pursuit of exclusive and hard-to-get products is not only a sign of spending power, but also insider knowledge and connections.

Bespoke Sells Lee Coleman, managing director of Quintessentially Gifts, says one trend she has
noticed is the growth of accessories vs clothing. We are often asked to source a limited-edition watch, rare handbags or accessories such as a designer scarf as opposed to haute couture. That said, we’ve also worked with top designers to create limited-edition dresses for our members, or given them access to couture pieces hot off the runway. The experience is built around sourcing some of the most exclusive and hard-to-find items you’ve never thought of, for some of the world’s most discerning consumers.

The Digital Age

Another big trend we have seen is the growth of e-commerce. While Google’s boutiques.com aims to revolutionise the online shopping experience by using complex algorithms to predict the fashion items and styles consumers will and won’t like, traditional luxury brands are also buying in to the online world. Burberry will soon launch a Burberry Bespoke service, which allows customers to purchase, design and personalise a classic Burberry trench coat from their global e-store. Ralph Lauren’s entertaining and expensive 4-D light and sound shows held in London and New York celebrated the brand’s 10th online retail year in the USA and the launch of the e-store in the UK.

Meanwhile Net-a-Porter, which was sold to Richemont, the Swiss luxury goods group earlier this year in a transaction that valued the online fashion emporium at an estimated GBP 350 million, proves that a savvy online strategy can reap rewards for successful e-companies. Natalie Massenet, who founded Net-a-Porter in 2000, continues in her position as executive chairman while Richemont hope to use the platform to develop their own e-business platforms on the back of Net-a-Porter’s success over the past decade.

With an excellent product, exceptional service and innovative marketing strategies, luxury brands who find a way to relate to consumers and engage their loyalty will enjoy a commercial and competitive edge over brands who fail to do so over the next few years.
 

Emma Sherrard Matthew is the Asia Pacific CEO of Quintessentially