{ "docId": "019dd923-5de0-76bd-a16a-799ef856734b", "docSlug": "048f26423c8a0b1c", "documentTitle": "Global Powers of Luxury Goods 2017 The new luxury consumer", "authorId": "Deloitte", "authorName": "Deloitte", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "strategy_consulting", "sourceTypeLabel": "Strategy consulting", "presentationDate": null, "orientation": "landscape", "aspectRatio": 1.414, "pageNumber": 6, "pageCount": 52, "prevPage": 5, "nextPage": 7, "slideType": "key_messages", "function": "summarize", "density": "dense", "nDataPoints": 2, "notes": "The slide is structured as three distinct columns of text, each addressing a specific strategic question or theme.", "elementsJson": [ "headline_text", "paragraph" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-5de0-76bd-a16a-799ef856734b/6", "deckHref": "/decks/019dd923-5de0-76bd-a16a-799ef856734b", "deckJsonHref": "/decks/019dd923-5de0-76bd-a16a-799ef856734b.json", "deckAnchorHref": "/decks/019dd923-5de0-76bd-a16a-799ef856734b#slide-6", "components": [ { "bbox": null, "kind": "callout", "text": "Collectively millennials and Generation Z will represent more than 40 per cent of the overall luxury goods market by 2025, compared with around 30 per cent in 2016.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-0490-77fe-9d44-8427b974a21a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.65, "w": 0.28, "x": 0.68, "y": 0.22 }, "kind": "paragraph", "text": "Luxury goods industry sales growth and profitability have underperformed in recent years, partly because of its problems in adjusting to changed demographics. The sector has lagged other consumer industries in recognising the increasing purchasing power of technologically-sophisticated millennials. Collectively millennials and Generation Z will represent more than 40 per cent of the overall luxury goods market by 2025, compared with around 30 per cent in 2016. Unlike Baby Boomers, many millennial luxury consumers expect to interact with brands across a range of digital platforms, rather than only through traditional channels. Millennial consumers are also important for in-store shopping and expect a high-value, customised experience. Luxury brands should seek to change their business models to meet this demand, for example by providing more loyalty programmes and invitations to in-store events. Further, for millennials the emotional and personal context within which luxury brands appeal to consumers has widened considerably. Luxury brands are supplementing traditional attributes such as quality and scarcity with lifestyle values including sustainability to attract millennial consumers. The emphasis on sustainability is visible in many areas especially in advertisements. Luxury brands have begun to highlight their use of renewable and organic materials, and now emphasise their efforts to lessen the environmental impact of their production.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9682f5fa-8cb8-4505-8c05-f99f979c044c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.65, "w": 0.28, "x": 0.04, "y": 0.18 }, "kind": "paragraph", "text": "The internet has become an integral part of the purchasing habits of various groups of consumers worldwide. However currently, luxury sales growth is being driven by millennials and Generation Z. With different expectations, younger shoppers seek a personalised shopping experience that seamlessly integrates both online and offline platforms. This shift has motivated demand for connective technology such as Augmented Reality (AR) and Artificial Intelligence (AI). By using AR and AI technologies, luxury brands can provide a personalised consumer experience, reach a wider audience, deepen product experience, and build stronger customer relationships. In parallel, the development of technologies such as voice commerce and the Internet of Things (IoT) are reshaping the entire luxury industry. Luxury brands positioned as reliable sources of AI-driven recommendations are improving how they engage with consumers. More widespread adoption of AI is also making consumers increasingly reliant on suggestions and advice provided by their various devices, rather than making decisions based on personal experience. In January 2018, Estée Lauder-owned Smashbox Cosmetics launched its first Messenger bot for UK customers to help explore new products, read usage instructions, and locate the nearest stocked store. In December 2017, LVMH launched a \"virtual adviser\" on Facebook Messenger for US clients. The chatbot answers queries relating to Louis Vuitton products, such as searching the brand's online catalogue, detailing the brand's history, and providing advice on product maintenance.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c7d56584-bfbc-479b-953f-7986a769486d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.65, "w": 0.28, "x": 0.36, "y": 0.09 }, "kind": "paragraph", "text": "Further, luxury brands are also using AR in combination with their physical retail stores to enhance the shopping experience of their customers. This technology helps consumers visualise and \"try\" new products at home before making a purchase. For example, in July 2017 Estée Lauder announced the launch of a conversational AR lipstick advisor that helps potential customers identify their ideal lip shade. L'Oréal is increasingly focusing on AR to enhance customer experience: in March 2018 they acquired ModiFace, an internationally recognised leader in AR and AI applications used by the beauty industry. YOOX's \"Try, Share and Shop\" initiative partnered with Lumyer in 2017 to produce an AR camera app that enables users to try handbags, sunglasses and jewelry from YOOX in virtual reality. Burberry has used ARkit by Apple as part of its digital marketing strategy through immersive story-telling. So far, relatively few personal luxury brands have used AR apps, with the most widespread use taking place in the makeup sector. The adoption of the AI- and AR-driven technology for the whole luxury sector is not so fast as the market was expecting, because the larger players have complex cost structures and the return on these technologies could not outweigh the cost of investment in them. Despite this, big luxury groups should be aware of digital transformation in retail technology, which is changing how affluent consumers shop and driving growth of independent luxury brands.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "dc8835eb-8075-4151-8d5f-47e9a9183b9d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.28, "x": 0.04, "y": 0.09 }, "kind": "title", "text": "Will digital techniques such as AR and AI help independent luxury brands compete with large groups?", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "75239fa3-eb2c-4e8f-b738-e939afde53ab", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.28, "x": 0.68, "y": 0.09 }, "kind": "title", "text": "How does the millennial state-of-mind and loyalty towards personal luxury goods affect the industry and communications and sales strategies of luxury brands?", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ae072a7d-8a23-4012-b862-de3249e0bee3", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 10, "from": 6, "beatId": "e199a991-11e1-4f2c-a1cf-9d39d75a36cc", "arcName": "Monroe's Motivated Sequence", "arcSlug": "monroes-sequence", "beatName": "Need", "beatSlug": "monroes-sequence-need", "evidence": "The report highlights key messages and industry trends, emphasizing the need for digital transformation", "position": 1, "confidence": 0.8, "parentBeatName": "Complication", "parentBeatSlug": "complication" } ], "loops": [ { "to": 10, "from": 6, "name": "Golden Circle", "slug": "11-golden-circle", "bestFor": "Visionary leadership, brand positioning, mission statements", "matchId": "eb0ab7a5-305e-45b9-b7bb-b89f3b0eda8b", "evidence": "The report highlights the importance of digital techniques for independent luxury brands", "position": 0, "objective": "Why digital techniques are crucial for independent luxury brands", "structure": "The Why (Belief) -> The How (Process) -> The What (Result)", "confidence": 0.7, "description": "Invert the typical pitch by starting with why you exist, rather than what you do" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }