<\/p>\n
\n\tThe luxury sector is getting back on a growth trajectory after a three-year malaise that nonetheless gave global brands time to \u201creset\u201d for a better future.<\/p>\n
\n\tThey\u2019ve formed new strategies based on fresh consumer insights, technology advances and revamped creative teams.<\/p>\n
\n\tThat was the central theme of last Thursday\u2019s Luxury Executive Roundtable organized by the Boston Consulting Group at the firm\u2019s Hudson Yards offices in Manhattan. The evening began with a presentation by BCG managing director Beatrice Lemucchi on the state of the luxury industry based on the BCG\/Altagamma annual survey of 12,000 luxury consumers, as well as interviews with members of BCG\u2019s advisory board, industry chief executive officers and consumer studies.<\/p>\n
\n\tThen Laura Dubin-Wander, president of Burberry in the Americas; Ewa Abrams, president of Kering for the Americas, and Tim Chai, head of product strategy at TikTok Shop, discussed how their companies are evolving and using consumer insights. \u201cWe\u2019re sort of past this reset stage where there was anemic growth,\u201d said Robin Mitchell, BCG\u2019s senior adviser who moderated the panel.<\/p>\n
\n\tDubin-Wander said the \u201cBurberry Forward\u201d transformation strategy consisted of four pillars: brand, client, product and distribution. \u201cWe\u2019re moving a little bit away from the true transformation piece and are laser-focused on a growth mode\u2026We have great brand awareness. What we are really focused on is brand heat and desirability\u2026The way you get brand heat and get clients to really desire the brand is to focus on Western talent. While the English are fabulous, there are probably opportunities for talent that has more global reach, specifically more Western reach. With that, we\u2019ve doubled down on athletes, particularly in the States.\u201d<\/p>\n
\n\tShe said Burberry has tapped NBA players, including Carmelo Anthony who has participated in Burberry events and wears the clothes. The strategy has been \u201ca game changer\u201d in men\u2019s, she said. On the women\u2019s side, \u201chigh-touch experiences,\u201d including recent pop-ups in the Hamptons, Palm Beach and Aspen, have been game changers.<\/p>\n
\n\tBurberry has leaned into its \u201ccore competencies by creating trench destinations and scarf bars,\u201d Dubin-Wander said. She also sees Burberry \u201crecalibrating\u201d its distribution with opportunities to downsize or exit certain locations in the U.S.<\/p>\n
\n\tOn the men\u2019s side, Burberry\u2019s $400 polos represent an accessible price point. \u201cPolo galleries\u201d have been put together, starting the journey for some to discover other Burberry products. Similarly, Burberry women\u2019s offers athleisure, which has been \u201creignited\u201d because it\u2019s a category that\u2019s part of a lifestyle.<\/p>\n
\n\tAt Burberry, AI is moving at a \u201cmeteoritic pace [though] it\u2019s still very back-of-house,\u201d focused on such areas as data analytics, IT and supply chain.<\/p>\n
\n\tAbrams said Kering has been creating a platform to achieve synergies across functions, and processes \u201cthat allows us to make fast and clear decisions. Some of that is around the implementation of technology and AI to create an accelerator for the brands.\u201d<\/p>\n
\n\tDiscussing luxury versus aspirational customers, Abrams said high-net-worth customers need \u201chigh-touch personalization, experiences, things that money can\u2019t buy and surprise and delight\u201d clients.<\/p>\n
\n\tAspirationals, however, are motivated more by cultural relevance, specifically artists and musicians. \u201cIt\u2019s a different type of engagement,\u201d she said. Aspirationals don\u2019t buy into categories as deeply as high-net-worth customers. \u201cIt\u2019s important to stimulate them with the right product categories such as eyewear or fragrance,\u201d costing less than ready-to-wear.<\/p>\n
\n\tBCG\u2019s Chai said TikTok users want personalization and nativeness. <\/p>\n
\n\t\u201cEven in luxury, our users are not as receptive to things that are too polished, too precious. The most successful brands [on TikTok] maintain the brand voice, but in a way that\u2019s very popular and native,\u201d he said. \u201cBurberry is an amazing example. On TikTok, the presence is still quintessentially British, with heritage, evoking the countryside and an aristocratic feeling, but it\u2019s more playful, fast-paced, joyful, and with cheeky British humor.\u201d<\/p>\n
\n\tRecapping findings from the BCG\/Altagamma report, Lemucchi said luxury would grow by 2 percent to 5 percent globally this year, fueled by 8 percent growth in North America as well as AI and tech-created wealth. Europe is seen flat to up 1 percent. China is expected to recover with 2 percent to 3 percent growth. The Middle East is seen falling by double digits due to the war. She also cited \u201cpositive numbers\u201d among aspirational customers, after declines in recent years. \u201cThey either didn\u2019t engage in the market or had a lower spend.\u201d<\/p>\n
\n\tEven the richest of luxury shoppers, Lemucchi said, are sensitive to price increases, with about 70 percent deciding not to buy something they wanted because of a price hike on at least one occasion. \u201cThe good news is that when they stop that type of purchases, most of the time they shifted to another category, such as beauty.\u201d<\/p>\n
\n\tShe said luxury has been slower to adopt AI than other industries, though there\u2019s been \u201csignificant acceleration in the last 12 months. Ninety percent of customers are telling us they\u2019re already engaging with AI tools or prompts on a daily basis or weekly,\u201d often involving product discovery, recommendations and comparison pricing. \u201cThey also trust AI tools and platforms much more than social media and influencers.\u201d<\/p>\n
#Burberry #Kering #Cite #Resets #Capitalize #Luxurys #Rebound<\/p>\n","protected":false},"excerpt":{"rendered":"
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