Luxury as an industry is now being upgraded and the future of brands is being determined by their response to the change in consumer habits. Digitalisation is changing the way consumers are purchasing luxury goods; from renting designer clothes to luxury reselling e-commerce sites, the relationship between consumer and luxury conglomerates is significantly changing and brands have to adapt to the way in which consumers are purchasing luxury goods and items.
The second hand market is growing faster than the primary luxury market, with $24 billion representing the resale market. The online resellers like Vestiaire Collective and Net-A-Porter are driving the growth of the preowned market which is beyond the power of any brick and motor store. The luxury resale growth is fuelled by a young and affluent generation who understand the importance of sustainability and purchasing timeless pieces of luxury that will hold their value, which allows for brands to consider the lifecycle of their products beyond the initial sale.
The luxury fashion market has grown significantly in recent years with a 5% growth in 2018 to an estimated revenue of $1.2 trillion globally. Paris-based luxury conglomerate LVMH is pioneering the future of luxury, buying into well-established fashion brands like Dior and creating their own digital identity. LVMH launched their multi-brand online shop in June 2017 allowing for consumers to find brands in one place, avoiding shopping around for different designer brands.
Luxury brands are focusing on individual consumers to drive sales, looking into their demographic to shape their business agenda, from marketing campaigns to designer collaborations. Well established brands like Prada and Louis Vuitton have successful online sites allowing for consumers to buy goods directly from the designer, taking away the in-store luxury experience.
Millennial consumers are no longer ‘absolute luxury shoppers’, instead they are mix and matching between luxury which helps them to express their style based around trends showing that the traditional luxury market is changing.
In recent years, companies are forming allowing consumers to rent luxury products which is replacing the ownership of designer goods. NY-based retailer Rent the Runway invested $176M to develop a platform where consumers can rent luxury clothing, accessories and handbags on a monthly basis. These luxury renting services are serving as a model for luxury companies who might consider launching their own subscription service for their products to create a personalised experience to improve brand loyalty as well as maximising profit.
Have you used one of these luxury renting companies? Do you think you ever will? Let us know @Fashion_North.