Where is luxury headed in 2018? Online, of course, as with other retail sectors. According to Olivier Reza, CEO of luxury watch membership service Eleven James, 25% of luxury sales will be online by 2025.
This means that luxury retailers that want to survive need to start thinking about their digital strategy for 2018 in order to provide their customers with the curation and service that they are used to with high-end shopping.
If consumers are trending toward buying experiences over assets, these retailers will find some way to offer value beyond the item itself, whether it be through local sourcing or strong editorial.
Not only are consumers ready for luxury to go online, they are expecting it, according to Reza.
"For future generations, it is already a foregone conclusion; millennials and younger consumers are used to digital as the default channel, meaning it will be the first place they look when they want to explore luxury—or anything, for that matter. This will be especially true because their appetites for consumption are changing to prioritize experience instead of ownership, which is much more efficient when packaged, and often times delivered, through digital channels," he said.
So now it's up to retailers to respond to the demand. Reza believes it will take data, scale and supply in order to get luxury retailers ready for this digital change.
"Digital channels enable the kind of data-driven insights that enable laser-focused service and personalization, which has always drawn people to luxury," he said. "They’re also key to enabling the kind of scale required to capture markets that are rapidly growing. Finally, online channels offer the opportunity to create a new supply route for preowned or rare pieces, and to introduce new ways to merchandise and market products."
Reza also notes the importance that editorial will play in the future of luxury, as it plays an integral role in educating shoppers. He says that editorial can foster a conversation between a person who is eager to learn about a new product and the experts, or go-to sources, for that information.
"Additionally, it provides a way for us to elaborate on how people can make the most of the model—how they can use it in their day-to-day lives to maximize their experience and get the most out of life. Content can be especially helpful in luxury and fashion because it can help educate people on how to elevate their own tastes and personal styles," Reza said.
Plus, editorial in the digital age can be sent to consumers through many types of channels, such as through events, discussions and social media connections.
"This is important in helping generate authenticity and keeping the discussion focused on what really matters: the human element and emotion behind any interaction, and the added value that brings to experiences and transactions big and small," he said.