My takeaways of the 2024 “Business of Luxury” FT conference
Multipolarity of the Asian market
In the next few years Asia is going to account for 2/3 of the luxury industry growth. It is important, however, to acknowledge the multipolarity of the Asian market (Keyu Jin, Associate Professor of Economics • London School of Economics)
- India, with a consistent 5-6 % rate, is poised to become the “next growth story”
- Indonesia and Vietnam show good market potential in terms of demographics and market dynamism
- despite the slowdown, China has de facto become a peer competitor for the US. How the two superpowers will manage their relations will impact on the future of the luxury industry (Robert Armstrong, Chief Economics Commentator • Financial Times)
Polarisation of luxury brands, polarisation of luxury consumption
With the growth rate normalising at 3%, we see a polarisation between big and independent brands. This stems also from the massive retail investments required to offer an augmented retail experience (= additional space for cafes, art exhibitions, etc.) and for talent acquisition (Ashley Wallace, Managing Director in Equity Research • Bank of America)
The traditional pyramid model of luxury consumption has turned into an hourglass model, with luxury sales aggregating at the top and bottom. Companies, however, should be on the look for the rise of the middle class in China, India and Latin America, which is going to propel the industry in the next future (Stéphane de La Faverie, Executive Group President • The Estée Lauder Companies)
Experience, experience, experience
Fragrances wardrobing (= wearing different fragrances according to the occasion) and perfume layering translate into less loyal, more experiential consumption patterns (Marina Mansour, Vice President of Beauty and Wellness • Kyra)
The experiential value of travelling lies in the creation of time to disconnect, to reconnect with family, to celebrate life milestones, to appreciate one’s surrounding environment. This is especially relevant for those generations of customers that have grown under the pressure of speed: living in the moment and creating fantastic memories is their luxury (Dan Ruff, CEO • Belmond; Patrick Hansen, CEO • Luxaviation Group)
Scottish whisky companies are capitalising on distilleries as destinations enriching the product as lifestyle experience (Alice Lascelles Drinks Columnist • Financial Times)
Together with a widening product extension strategy, Bottega Veneta is opening in Venice a space to display their products, crafts works and to host events. Events are also at the core of the sale strategy of Ferretti Group, which organises for their distinguished clients musical performances and tailored trips (Leo Rongone, CEO • Bottega Veneta; Alberto Galassi, CEO • Ferretti Group)
Social media as a source of inspiration, knowledge and education
Social media and peer advocacy are the main channels introducing GenZers to watch collecting and fragrance consumption. When it comes to contemporary art, young collectors seek a direct contact with the artists, either during events or on social media (Benjamin Clymer, Founder and Executive Chairman • Hodinkee; Marina Mansour, Vice President of Beauty and Wellness • Kyra; Anthea Peers, President of EMEA • Christie’s)
GenZers are calling brands to share more in an authentic and intimate way, they want to be informed and educated. When a brand opens the doors into its brand equity, a connection is created through sound and images (Laura Milani, Head of Fashion & Luxury, Italy • TikTok)
From products to lifestyle
The price increase of accessories has shed new light on jewellery as an accessory category with unique selling points, such as meaningfulness and long-lastingness (Francesca Amfitheatrof, Louis Vuitton Haute Jewellery)
For auction houses, the sale of luxury watches and handbags are instead the entry point to convert younger customers into contemporary art collectors (Anthea Peers, President of EMEA • Christie’s)
Brands need to rewire their relationship with the customer through storytelling and augmented experiences
Imperative for beauty brands is to build local relevance by creating a cultural and aesthetic language that can resonate with their markets. Also, they need to allocate in-store space for beauty rooms and cultural encounters (Stéphane de La Faverie, Executive Group President • The Estée Lauder Companies)
In car collecting, the enjoyment of a car is enhanced not by its mechanical features but by the human story behind it (Simon Kidston Founder • Kidston)
Tequila is the new kid on the block in the fine spirit sector, with brands looking to leverage its appeal among younger customers. On the storytelling front, this requires brands to identify stories on craftsmanship and scarcity that can elevate the product beyond the “high-energy nights”, “impress others” narrative (Philippe Guettat, EVP Global Brands • Pernod Ricard; Jon Potter (Managing Director of Gin • Maison Courvoisier and the House of Suntory)
Wellness clients are looking for transformative journeys through memories and experiences. Incorporating local culture, retail and healthy living education into the wellness experience is key (Alejandro Bataller Board Member & Vice President • SHA Wellness Clinic)
The character of the place and the staff are still the two pillars of memorable luxury experiences in hospitality (Ori Kafri Co-Owner • J.K. Place; Marie-Louise Sciò CEO • Pellicano Hotels)
Multi-brand retailers: the problem child of luxury
Department stores have failed in treating their customers as people, and have forgotten about their role of retail incubators. There is also a lacking sense of humor in their current proposal (Julie Gilhart, Fashion Consultant)
The outlet is the first port of contact for the aspirational consumer segments. It has also become a destination in its own right, with visitors expecting to be entertained and engaged throughout their visit (Joan Jove, Co-CEO • McArthurGlen Group)
Multibrand retailers need to reconfigure themselves at the intersection of retail environment, showroom and event space, and become good entertainers and good hosts. Every occasion should be used to build a direct relationship with the audience (David Fischer, Founder & CEO • Highsnobiety)
After the hyper-growth of Gucci: leading Kering into the future
My favourite moment of the conference: Bellettini spoke honestly and lucidly about the elephant in the room
It is time to reflect on the hyper growth of Gucci, and the lessons learnt from its recent struggles. Gucci’s underperformance lies in the over-reliance on millennial and aspirational customers, while its recovery path will focus on efficiency, the quality of the product and a controlled retail distribution. This will offer Gucci the brand legitimacy to produce more elevated items, repositioning as a true luxury brand (Francesca Bellettini, Deputy CEO, Kering • President & CEO, Yves Saint Laurent)
Quotes
“Luxury is becoming vulgar” (Alberto Galassi, CEO • Ferretti Group
“We are condemned to beauty” (Stefano Dolce, quot, by Ferretti)
“Instead of ranking hotel by their stars, I wish hotels were ranked in terms of soulfulness” (Marie-Louise Sciò CEO • Pellicano Hotels)
“There is a difference between being authoritarian and having leadership” (Francesca Bellettini, Deputy CEO, Kering • President & CEO, Yves Saint Laurent)