Dodging locusts, learning to share and keeping up with the world’s 600 most popular cities are all vital tactics for brands looking to succeed in the modern luxury sector.
Speaking at ttgluxury’s ‘Trends in the luxury sector: how to adapt to demands of the modern luxury traveller’ session, Philippa Wagner, senior futures consultant at The Future Laboratory, said there were eight noteworthy emerging trends.
First up - the Locust Effect, which sees consumers descend en masse on certain trends and is typified by the 45% of Chinese “luxurians” who admit they are watching for the next emerging brands and will switch to them in the next three years.
Wagner said: “Luxury brands are actually reporting groups of consumers ‘swarming’ on to a brand; they literally consume everything about it and then it is over and they move on to the next big thing.”
Another key trend she said to watch for was Continental Drift, which recognises the increasing importance of airports to “sixth-continent luxurians”, with many of them doing much of their shopping in specific duty-free airport locations globally; that market is expected to grow 51% to £47.6 billion in 2019 from £31.5 billion in 2014. Nigerian luxury travellers alone spend an average of £1,059 per visit to Heathrow, Wagner said.
Appreciating how important the airport experience is becoming was also key she said, with many airlines already making significant investments; Cathay Pacific’s The Pier first class lounge at Hong Kong International Airport is designed by Studioilse.
Metro Magnets, said Wagner (pictured), are the top 600 cities accounting for the vast majority of luxury spending around the world and home to growing populations. A luxury buyer in Shanghai is likely to have more in common with someone in Paris than a fellow countryman from Zhenjiang, she added.
The Billionaire Boom illustrates the importance of keeping in with the super-rich, 82% of whom saw their wealth increase in 2014, Wagner said. Meanwhile, the emergence of New Value-Seekers – particularly among 18 to 35-year-olds - means companies wanting to target these customers will need to take heed of their “dislike of conspicuous consumption” and rapid preferred adoption of the sharing economy.
Companies such as BMW have switched on to the potential of the market, Wagner said, by offering DriveNow, a car-sharing scheme that offers the latest models; as does Mini now too.
In hospitality, Wagner highlighted Life-lodging as a trend that refers to people’s desire to tap into the local community around the hotel they are staying in.
Hotel Hotel in Canberra acts as a cultural hub and an agitator for the local community, she said, with the hotel including a bike rental service and shop, a library, a hair salon, a cinema and an art gallery. Meanwhile Zoku in Amsterdam is positioning itself as a neighbourhood for ‘global nomads’ and offering a series of multi-functional, modular apartments.
“The younger generation are looking for something else from their hotel – they are not just looking for a location, they expect it to be a cultural hub and they expect to be part of it,” Wagner said. “They don’t just want the guide book, they want the guide who is part of the cityscape.”
Another key trend is Virtual Opulence, Wagner said, whereby the use of immersive technology is used in luxury retail – and increasingly in travel, with Qantas, Air New Zealand and Shangri-La Hotels & Resorts among those using the technology.
Geo Quests is another key marketing opportunity – whereby people are forced out and about to interact with brands – The Future Laboratory was tracking, Wagner said.
But luxury travel’s embrace of technology has been slow, according to session panelist and founder of Luxury Branding, Piers Schmidt. He said that only now is the sector beginning to embrace the future it had previously eschewed.
He added: “Technology has been a huge threat to luxury. Luxury is possibly tech-wary, as technology democratises ideas and processes and luxury is supposed to be exclusive. Our industry is waking up, but it’s behind luxury lifestyle brands.”
Fellow panelist and vice-president sales for Shangri-La Hotels & Resorts Greg Ward said the company was focusing more on virtual reality to help agents familiarise themselves and clients with their hotels and locations.
But Schmidt added that while luxury hotels need to have one eye on the future, they musn’t take them off the present and ensuring consistency of delivery so customers always get the best experience. And The Small Maldives Island Co curator and chief executive Mark Hehir agreed. "Technology is a game changer, but it should not be at the expense of traditional values. We also need to make sure when people leave they feel it is an experience that’s touched them,” he said.