Generation change in the Luxury Industry_Presentation

Generation change in the Luxury Industry_Presentation

• 1.
  Generation Change inthe Luxury Industry Gen Y and Gen Z Presented by: Ipsa Bansal Umang Chaudhary 1MBA Project
• 2.
  Second best: Beauty andhandbagsTop personal luxury growth categories: Shoes & Jewellery (7%) Luxury Consumption in : • Europe: €84 bn • Americas: €80 bn (rose 5%) • Japan: €22 bn • Rest of Asia: €39 bn • Others: €12 bn (stagnant) Stagnant segment: Watches About the Industry 33% of total luxury spend is from Chinese consumers Lorem ipsum dolor sit amet sale ubique delicata cu eum, id malis dolorem argumentum usu €1.2 trillion 2018 5% Personal Luxury goods €260 billion 2 9 Luxury Segments • Luxury Cars • Personal luxury goods • Luxury Hospitality • Wine & Spirits • Furniture & Housewares • Fine Art • Gourmet Food and Fine Dining • Private Jets & Yachts • Luxury cruises 6% Factors affecting luxury industry the most: • Economic • Social • Technological • Environmental Porter’s 5 forces: • Threats of New Entrants: LOW • Bargaining Power of Buyers: LOW • Threats of Substitutes: LOW • Bargaining power of suppliers: MODERATE • Competitive rivalry: MODERATE
• 3.
  Generation Y Born after1995 In-store Purchase Digitalization affects buying decision 88% Sustainability affects buying decision 41% 6% 3 Generation Z Changing Consumer base 47% - Luxury Consumers (2018) 33% - Luxury Purchases (2018) Born between 1981-1995 In-Store Purchase Digitalization affects buying decision 75% Sustainability affects buying decision 80% 52% 21% 55% Future Luxury Purchases (by 2025)? Sample Size Sample Size 20% SURVEY RESULTS • Discovered Digital • Less inclined to discuss social issues • Less optimistic about future • Grew up with economic freedom • Born with Digital • More inclined to discuss social issues • More optimistic about future • Grew up knowing economic turmoil
• 4.
  1. Emerging designer collaborations 4 Emergenceof new Cultures and Sub-cultures Will shape fashion and luxury by 2025 • Consumers demanding culture and size preferences • Modest Fashion accounted for 40% of luxury women’s ready-to-wear • Inclusive Fashion represents about 20% of luxury women’s ready-to- wear Bought a designer collaboration piece or special edition: KEY TRENDS Gen Y 60% Gen Z 67% LVMH’s collaboration with Supreme The most appreciated, in China as in the USA and Europe.
• 5.
  1. Emerging designer collaborations 2.Streetwear fashion 5 Emergence of new Cultures and Sub-cultures Will shape fashion and luxury by 2025 • Consumers demanding culture and size preferences • Modest Fashion accounted for 40% of luxury women’s ready-to-wear • Inclusive Fashion represents about 20% of luxury women’s ready-to- wear KEY TRENDS • Brands partnering with cutting-edge streetwear designers • These high-end collections are irresistible for the new consumer base Off-White x Rimowa
• 6.
  1. Emerging designer collaborations 2.Streetwear fashion 3. Resale Market 6 Emergence of new Cultures and Sub-cultures Will shape fashion and luxury by 2025 • Consumers demanding culture and size preferences • Modest Fashion accounted for 40% of luxury women’s ready-to-wear • Inclusive Fashion represents about 20% of luxury women’s ready-to- wear KEY TRENDS • Luxury second-hand market represents a $24 billion • Growing at an annual rate of 12% Bash and SMCP partnerships with Vestiaire Collective.
• 7.
  LVMH’s partnership withUNESCO: Promises sourcing transparency while refining their supply chain. Sustainability and Responsibility 60% of the Gen Z and Gen Y: influenced by the topic of Sustainability 7 Willing to pay more for products that have the least negative social impact Main issues this generation care about: • Climate Issues • Animal Cruelty • Use of non-biodegradable products • Lack of transparency • Social Responsibility Í LVMH’s partnership with UNESCO Promises sourcing transparency while refining their supply chain.
• 8.
  Evolution of Technology& Digitalization • 40% of luxury consumers will be shopping digital by 2025 • Want seamlessly integrated experience both online & offline • Internet – an integral part of purchasing habits • Deeper insights into consumer habits, increases brand engagement Personalization AI Merchandising Virtual and Augmented Reality Visual Search 8 ‘Gucci Hallucination’ campaign • a successful digital implementation of AR & VR • includes in-store AR and VR installation • allow the consumer to become part of the campaign as well as scannable ads
• 9.
  RECOMMENDATIONS Embrace inclusive sizingand modest fashion Be accessible to a diverse Group 9 Collaborate with niche streetwear brands Personalize as well as customize
• 10.
  RECOMMENDATIONS 8 seconds Gen Zattention Span Gen Y attention Span The art of story telling Be accessible to a diverse Group Keep the audience engaged 10 Use key Gen Z influencers Video content is the key 12 seconds
• 11.
  RECOMMENDATIONS • Committo environment and social causes. Be accessible to a diverse Group Keep the audience engaged Show that they care 11 • Organize campaigns and sustainable fashion walks. • Go fur-free and use alternatives for leather etc. 12 seconds • Introduce recyclable packaging and keep the supply chain process transparent.
• 12.
  RECOMMENDATIONS • Fastand free shipping, easy store returns Be accessible to a diverse Group Keep the audience engaged Show that they care Boost digital and technological investment 12 • Provide virtual trial room experience using AI • Chatbots using AI can enhance customer experience 12 seconds • Implement Visual and voice search
• 13.
  RECOMMENDATIONS • Help consumesustainably Be accessible to a diverse Group Keep the audience engaged Show that they care Boost digital and technological investment 13 • Can reinforce the fight against counterfeiting 12 seconds Resale service to reduce consumption Counterfeiting is a big risk when it comes to luxury products
• 14.
  14 Thank you foryour time!