According to statistics the revenue in the luxury goods market, which is more than $312 billion in 2022, is expected to grow more than 5% annually. But luxury brands cannot rest easy and must find new ways to differentiate themselves from competitors and attract new and old consumers.
So, we took a look around and collected for you some of the most interesting new trends for the luxury and fashion industry this new year.
5 Interesting new trends for the luxury and fashion industry for 2023
1) Use of technology with a customer-oriented approach.
The first of the new trends in the luxury and fashion industry is linked to technology. We all know the importance of digitalisation, but this trend goes beyond.
According to Luxury Institute, any department of a luxury brand that deals with customers should adopt consumer-centric technologies that help establish a stronger connection with consumers and engage them faster. There are many examples of such technologies, such as NFTs or web apps, but in this article, we want to mention two less obvious ones:
- Social selling technology: Social selling can improve the average cart size on e-commerce by 50-200% and conversion rates by 8-10 times. Through technology, brands can allow each sales associates to create their own mini-website and create a personalised purchase experience for customers by posting favourite products, curating product cards, and integrating their social media activity. Integrated social selling technology is already a reality for brands such as Louis Vuitton or L'Oréal.
- Short videos and livestream shopping technology: In addition to videos on social media, brands should liven up their websites with short videos that showcase and describe their products, especially the best sellers. Brands could also try live streaming directly from stores. Consider that average customer engagement seems to increase from 8-seconds to 17-minutes while conversion can go from 0.2% to 34%.
2) Socially conscious luxury
Luxury brands should give great consideration to their corporate social responsibility. In fact, publicly supporting a social cause can greatly influence consumers' spending habits. According to Luxury Daily, more than 70 percent of consumers would prefer to buy from a company that supports a specific cause, as long as cost and quality remain equal. Supporting a social cause adds depth to the brand and emphasises its values.
However, this support does not have to be just lip service. Brands must demonstrate what they are doing to make things better. Honesty always pays off, so much so that according to Social Media Today, 90 percent of consumers say authenticity is key when choosing brands to buy from.
3) More specialised in-store staff
Despite the growth of online sales, in-store shopping is still important in the luxury world. However, shoppers expect an engaging shop experience with the utmost care. For this, staff must:
- know how to offer a phygital experience, using digital technologies to offer value to the customer even when they are in the store;
- offer an experience that is no longer product-oriented but value-oriented;
- focus on brand values and authenticity, moving away from the idea of exclusivity as the only leverage.
So, brands need to seek out the best sales talent, train them and offer them the tools to welcome and delight consumers. This will markedly improve competitiveness in the market.
Among the new trends in the luxury and fashion industry, we cannot miss out on reselling.
The second-hand market is expected to grow from the current $36 billion to nearly $60 billion in the next three years. And the luxury world is not excluded. Indeed, the Kering company, owner of the Gucci and Balenciaga brands, recently invested in Vestiaire Collective, an online reselling platform. But reselling can also be done through proprietary platforms. Either way, it brings numerous benefits:
- it reduces the environmental impact of production, contributing positively to the brand's sustainability goals,
- it meets the sustainability desires of a large segment of consumers, bringing them closer to the brand,
- It gives brands more control over the second life of their products. This, along with authentication methods, helps combat counterfeiting and the economic damage it causes.
5) Changing to meet Digital Natives
Millennials and Gen-Z already account for about 50 percent of luxury sales and will exceed 70 percent by 2025. Luxury brands must adapt to the motivations that drive Millennials and Gen-Z toward luxury, which are very different from those of previous generations. Indeed:
- Millennials and Gen Z are value-driven consumers: they expect brands to earn their loyalty, and they choose brands that share their values and that support social, environmental or political causes that are important to them:
- they seek authenticity and long-term quality, but also innovation: 78 percent of young luxury buyers say a brand's commitment to innovation is a driver of purchase.
- they are hybrid consumers: although 75% of their purchases are made in-store, 70% are influenced by their interactions with a brand online. In other words, they desire both a digital and physical customer experience and expect to be able to interact with brands through multiple channels simultaneously.