Digital Transformation for Luxury Brands: 5 Key Statistics to Remember
The global luxury sector is undergoing a revolution. What are its key aspects and how can British brands and other luxury retailers in the UK make sure to be part of it? Here are 5 figures to help you understand the extent of this transformation.
Luxury brands opening up to Millennial consumers and to the Chinese market are setting new standards for customer experience. The luxury retail sector is undergoing a major transformation worldwide, and British brands and other luxury retailers in the UK must adapt their digital strategies in order to keep growing and evolving in this highly competitive sector. Let's take a look at five important figures to understand the magnitude of this shift:
1. Millennials will represent 50% of luxury good consumers worldwide by 2024
This rapid increase will generate a 130% growth in the luxury sector. This evolution brings with it a whole new way of buying luxury products. Millennials value a luxury good for the human values and experience it embodies rather than for the high social status it represents. It is therefore extremely important for brands to focus on providing an outstanding experience that is consistent and in line with their consumers' values. Gucci sets the bar very high by offering services that go far beyond material purchases. One example is the Gucci Museo - a three-story space located in a 14th-century palace in Florence comprising exhibitions and shopping areas - whose art director stated:
2. Chinese citizens will account for 40% of luxury goods consumers by 2024
The growth of this group should lead to a 70% lift in the luxury retail sector. This evolution highlights specific consumption patterns, particularly social commerce. These new habits inevitably encourage luxury brands to adopt new digital strategies. As explained in our new ebook, some European and British brands are particularly good at adapting their digital strategy to these new consumer groups.
3. In China, more than 50% of the discovery points available to a luxury brand are online, and mostly on mobile
Therefore, it is essential for luxury brands to get familiar with the codes and habits of Chinese consumers, and to know through which channels they can best attract their attention. Social commerce is one of these areas to be definitely taken into account. Gradually, Western brands are turning to super apps such as WeChat, which is the very example of social commerce and one of the most popular platforms in China. We are taking a closer look at these platforms and how brands such as Gucci, Harrods and Burberry leverage them in our latest ebook on digital transformation in the luxury sector.
4. 66% of Millennials and 77% of Chinese consumers used their mobile phone for their last online purchase
This figure highlights once again the importance of the mobile experience and a quality digital ecosystem. Whether through brand websites, generalist platforms or even social networks, luxury brands must pay particular attention to their digital strategy on mobile phones. It is also estimated that 80-90% of purchases should be made using smartphones by 2024.
5. Omnichannel accounts for 48% of luxury purchases worldwide and 61% in China
The percentage of omnichannel purchases has actually stopped rising in the last year, but the study conducted by Boston Consulting Group and the Altagamma Foundation predicts an increase in the coming years, particularly due to the growing presence of Millennial buyers, who are very receptive to a well-established omnichannel strategy. In China, ROPO ("Research Online, Purchase Offline") is a very popular method - partly explaining the higher percentage of omnichannel purchases in the country.
Digital strategies are at the heart of the transformation of luxury retail
These 5 key figures give a general idea of what new luxury customers expect from their favourite brands. Download our new ebook on the digital evolution of luxury retail to understand what this transformation implies and learn through examples how British and European brands can innovate in their digital strategy.
The figures in this article are from recent reports published by Boston Consulting Group in collaboration with Altagamma and Boston Consulting Group in collaboration with Tencent.