February 15, 2018
The setting was a remarkable space on the 20th floor of historic NoMad building 212 Fifth Avenue. Built in 1912 as one of New York’s first skyscrapers, the building was recently converted into luxury residences with spectacular views over Madison Square Park and the Flatiron Building. Kathy Kaye, President of Sotheby’s International Realty Development Advisors, and Nikki Field, Sotheby’s International Realty Senior Sales Advisor, contributed valuable perspective to the conversation as well.
Bloomberg Media Group’s Luxury Practice Lead Michele Chicoine welcomed guests from a diverse set of industries – from jewelry and watches to travel, apparel and real estate. “I’m excited to bring together so many people interested in how data can inform brand strategy,” she said.
Data, said Goyal, is something brands typically have plenty of – especially as more retailers embrace technologies that people can opt into to receive more personalized service. But, she said, “retailers are still trying to figure out how to know every customer and serve them,” adding that there is much more benefit to be gained from using data than is currently the case.
That may be particularly true for several key groups whose changing behavior is behind important luxury trends: Millennials and consumers outside the U.S. “Millennials are finicky, and hard to catch,” noted Rovzar. “You have to be there when they’re ready to buy.”
“Millennials want everything now – and they want experiences, too,” added Aitken. “If you’re not there to give them 24-hour service, there to answer all their questions, there with customer service – they’ll go elsewhere. Brands that are doing the best in the digital space are those that have the most alignment to the millennial audience.”
And they’ll let their friends know via social media, too. “You don’t have to wait for results anymore,” said Goyal; just open up an app like Twitter or Instagram and you’ll know what’s a hit – or a miss. “Brands need to be on social media, and they need to be there all the time,” she added.
Millennials – and plenty of other people, too – use social media for more than sharing what they think of customer service, of course. Increasingly, they share photos and stories in which experiences play the starring role. And luxury brands are taking note.
“Every major luxury resort brand is rolling out an experience package,” said Ekstein. For luxury travelers, she said, it now matters more what happens outside the room than inside.
But while a memorable experience may be the most important factor for some luxury consumers, others in the global arena may focus more on value, status or even long-term investment return – especially when it comes to jewelry, watches and real estate.
One example comes from the percentage of real estate held in investment portfolios around the world, said Field, which varies greatly across countries and regions. That offers a pointer to how people from different cultures view purchasing a home. “You have to be clear on a person’s goals and how they’re being met,” Field said. “Unless you wrap your head around why someone is buying, you can’t provide nuanced service,” she added.
For affluent consumers, understanding what comes with a premium – and why – in different markets is also important, said Tarmy. “Bloomberg Pursuits readers are inundated with nice things,” he said – so he and his colleagues focus on giving them content that uniquely blends the intriguing and the useful. For example, a recent series explores beautiful dwellings in cities from Los Angeles to Paris and beyond, while also delving into the specifics of how to judge prices and values in each.
Macro trends also impact high-end brands, from real estate to apparel. For example, said Aitken, Chinese citizens represent 12% of total global travelers – but make up 32% of luxury consumers. Fluctuations in markets, currencies and even government policies can all create circumstances retailers can profit from. A weaker dollar in 2018, for example, could result in an opportunity for marketers in the U.S. to capture more tourist dollars, said Goyal.
Marketers should also expect those making major luxury purchases to be more highly informed buyers than ever before. “People start online – that’s something we see across the luxury spectrum,” said Rovzar. People coming in to watch or car showrooms often know more about the products than even the person on the sales floor might.
That means brands must continuously innovate to stay a step ahead. “Brands are becoming more immersive,” Aitken said, with more individuality and flexibility.
For example, some apparel brands are capitalizing on younger shoppers’ love for unique, vintage finds by re-releasing older styles, Aitken added. Rovzar cited watch brands that are starting to offer trade-ins in order to capture new markets and maintain customers throughout the buying cycle.
And some travel brands – from airlines to hotels – have been piloting programs that make use of new technologies such as artificial intelligence and machine learning to provide enhanced experiences, Ekstein said. But it may take some time for consumers to catch up to what that technology can do. “When trust is not there, these technologies seem very scary and invasive,” she said.
And trust comes back to brand image – building equity and human connections that embody brand values transparently, with both employees and shoppers. “ Personalization is key,” Goyal concluded. “You need to listen, and you need to react.”
Bloomberg Pursuits | @luxury