In the era of the “experience economy” the luxury market is evolving and customer becomes increasingly international and globetrotter. The millennials, connected and digital, are growing, dedicated to the omnicanity and always looking, as well as the exclusiveness of luxury, originality and fun.

The shop becomes more and more connected, becomes ‘phygital’, providing the customer with services that bring him closer to the world of online shopping. However, maintaining the distinctive characteristics of craftsmanship and exclusivity proper to luxury brands.

These are the main evidences emerging from the white paper ›How the luxury market changes in the era of the economy experience › The white paper was developed by M-Cube Digital Engagement, an Italian retail digital engagement group for major retail and fashion brands. The research photographed the luxury market and analyzed future trends.

Experience economy and luxury market

From the data, M-Cube has recorded the strong evolution of the customer, with an increase of the consumers from emerging countries, Russia, South Korea. But mostly China, from which comes 1 in 6 customers. The new luxury customer is globetrotter, he travels a lot and buys out of his country. 30% of buyers are in the millennial range with an average receipt of $1,400. This target in 2024 will account for even 50% of buyers.

It also emerges how customers in this sector are smart technology and use their smartphones more and more to buy, communicate and inquire. The use of social networks increases as a channel of information and word of mouth, becoming one of the preferential platforms to evaluate purchases.

Research shows that even in luxury markets, product quality is no longer sufficient. And the winning strategy for brands is to be found in an evolved model of Customer Experience Management, played on multiple listening and relationship plans.

• Made in • remains a fundamental requirement for luxury consumers. But for millennials, in addition to the important values of attractiveness for a brand, we add the search for originality and fun. These requirements are becoming crucial for young consumers.

We entered the era of omnichannelity. This is strategic for luxury brands to differentiate and encourage new ways of attraction, engagement, communication and loyalty of the customer online and in the point of sale. The latter, the physical expression of the brand, immerses the customer in a memorable and multisensory experience, becoming to all intents and purposes ‘phygital’. That is interconnected and capable of creating a total interaction between analog and digital.

M-Cube, in the research field, has identified seven trends to keep in mind for the luxury sector.

The trending topic of the luxury sector

1. Craftsmanship takes on more importance than aesthetics. Values such as exclusivity, craftsmanship, quality and classicity are back, essential for core consumers who give them a much higher weight than the quality as recognizable as the brand and the aesthetic component.

2. The The origin of products is a discrimination for 80% of consumers, especially in emerging countries. In this sense, Made in Italy still enjoys broad approval, overcoming the primacy of the made in France. As well as still positioning itself as a favorite destination for customers internationally.

3. Word of mouth is a differential in business. 2/3 of consumers are used to recommend and suggest their favorite brands.

4. Men are the new protagonists of luxury consumption. The male segment is growing and they buy for themselves but also for others, with gifts representing 30% of their purchases.

5. Assortment and price as a combination that guides interest. The new consumer makes many of his purchases outside his country, due to cheaper prices and higher assortment. Milan is the second largest shopping destination in Paris. With Moscow, Singapore and Macao approaching the main Italian cities in consumer preferences.

6. Concept store location according to geographical areas. Consumers in mature countries prefer shops specializing in exclusive locations that allow for an intimate buying experience. While those of emerging realities prefer the great flagship stores where the traditional physical experience merges with the virtual and digital one.

7. Phygial Convergence (physic & digital). The digital world affects over 50% of purchases. Customers have become accustomed to looking for information and opinions online, long before products and in addition to an exploit of the “e-commerce,” which will go from the current 5% of the total to 15%.

Digital for multisensory shopping

The CEO Group of M-Cube Manlio Romanelli has or has observed that the evolution of the luxury market and consequently of the profile of customers is bringing the brands to turn with increasing attention to the world of digital and technology to make their stores closer

You can download the white paper on the M-Cube website at this link.

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