The future of luxury: more authentic, engaging & ethical, say retail experts

By Charlotte Turner |

Inside the February ezine, TRBusiness explored the evolution of the luxury goods market, asking travel retail stakeholders what space luxury brands now occupy and how consumer values have changed in a word dramatically altered by the pandemic.

 

Our experience of the last two years has taught us that international travellers and shoppers are now more conscious about how they spend. While you could argue that revenge spending has provided a welcome boost to retailers’ bottom lines, the majority of those that responded to the TRBusiness Annual Global Industry Survey (inside the January ezine) are of the opinion that this will be short-lived.

 

However, according to research and interviews conducted with industry stakeholders, travellers still have a desire to purchase luxury goods in travel retail, particularly from those brands that are familiar to them. Harper Dennis Hobbs, which has worked with some of the world’s most iconic luxury brands such as Louis Vuitton, IWC Schaffhausen and Van Cleef & Arpels among many others, confirms these findings.

 

“Early indications would suggest that there has not been a significant impact on the demand for luxury brands following the pandemic,” reported Hazel Catterall, Director – Travel Retail for HDH.

 

LUXURY BRANDS RECOVERY

“Anecdotally, in our conversations with airports who have significant luxury businesses, it tends to be the luxury brands which are recovering fastest in terms of sales following the return of passengers to travel post-pandemic.”

 

Jay Richards CEO of Imagen Insights spoke to TRBusiness in an exclusive interview about the demands and expectations of luxury brands from Gen Z consumers.

 

 

However, the way that consumers shop for luxury goods has rapidly and irreversibly evolved. Diana Verde Nieto, CEO, Positive Luxury, talked to TRBusiness about the rising prominence of the re-world (re-sell, repair, rent) and the shift in interests from luxury products to luxury experience/travel.

 

“Buying luxury is certainly an investment as some brands more than others hold their value – and even increase in value over time. Did you know that handbags are an asset class? Some luxury handbags bring better returns than fine art, classic cars, and even rare whisky.”

 

Hazel Catterall, Director – Travel Retail for HDH.

Each generation addresses the re-sale world differently says Hazel Catterall, Director – Travel Retail for Harper Dennis Hobbs.

Nieto insists that resell is also a fast moving market – and although perhaps the first adopters are Gen Z and millennials, this is a multi-billion pound revenue stream for businesses.

 

RESELL MARKET: FUTURE IN TRAVEL RETAIL?

Examples of re-selling outlets in travel retail are virtually non-existent at the moment, but that did not stop The Loop Duty Free (ARI) at Montréal-Trudeau International Airport from launching the first pre-loved luxury concept store to appear in an airport within North America in 2021.

 

The LXR Boutique from the eponymous vintage and pre-loved luxury retailer, specialises in handbags and accessories from designer brands including Hermès, Chanel, Louis Vuitton, Gucci, Prada, Ferragamo, Miu Miu, Cartier, Dior and Chloé, among others.

 

But does the re-world appeal only to millennials, Gen Z and Gen Y? “Each generation addresses the re-sale world differently,” insisted HDH’s Catterall. “While it may be millennials and Gen Z who are purchasing more, especially driven by the current trend for 90’s and early 00’s fashion, Gen X and boomers are essential in this circle for providing the products from their wardrobes to satisfy this market.

 

“There is also the nostalgia angle for older generations [who like] to purchase ‘modern vintage’ products from re-sale stores and sites, remembering their favourite products from their previous lives. It’s important to remember that none of this is actually new; it’s just being adopted by a younger generation.

 

“Buying luxury is certainly an investment as some brands more than others hold their value," says Diana Nieto.

“Buying luxury is certainly an investment as some brands more than others hold their value,” says Diana Verde Nieto, CEO, Positive Luxury.

INFLUENCE OF SOCIAL MEDIA

The difference is social media makes it easier for these things to be introduced into the consumer consciousness more readily.

 

“Clothing rental, especially for occasion wear, has been around for years, but the media attention it has gained recently might make it feel like it has been invented as part of the ‘re-world’ and it’s the same for item repair. There’s no reason to think that older generations won’t engage with this.”

 

Jay Richards CEO of Imagen Insights, which says it provides ‘brutally honest’ insights from Gen Z consumers, says while sustainability is of utmost importance to this generation, they firstly demand authenticity and fully engaged interaction from luxury brands, be it online or instore.

 

“They want to engage in a two-way conversation with brands – they don’t want it to be a one-way street – and find out exactly what they plan on doing over the next two to five years and how they can be involved.”

 

Social media platforms form an essential part of any brand’s communication strategy, but Gen Z are beginning to look outside of the most popular sites – Tumblr is gaining popularity with Gen Z – who are searching for more authentic content.

 

“Millennials wanted [their content] polished, they wanted people to look beautiful and everything to be perfect and that worked really well… that isn’t the case for Gen Z,” added Richards.”

 

To read the full report, including exclusive comments from Melvin Broekaart, Director Global Travel Retail, Rituals Cosmetics, see the February ezine here.

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