5 trends impacting the luxury industry

London - The latest it-bag, rare cars and sumptuous houses once defined the epitome of luxury. But affluent lifestyles in the digital world are less about objects than it is about status, the ultimate luxury.

According to Global Trend Briefing's The Future of Luxury Report, status has become less about 'what I have' and much more about 'who I am': namely, more ethical, creative, connected, philanthropic, tasteful, etc than the masses. The implications for luxury consumerism are vast, as premium consumers intensify their quest to live out and personify these ideals. But so are the opportunities for brands that can understand, and deliver on, the new luxury mindset.

As the Chinese consumer is reigning in spending both abroad and at home, luxury groups are halting their rates of expansion and seeing a slowdown in growth. According to the Financial Times, brands are introducing features such as concierge services, pop-up shops and art installations as the lines between shopping and entertainment blur and brands compete with other consumer groups.

One of the few remaining areas of growth in luxury is ecommerce, which Bain estimates grew to 7 per cent of market share in 2015, from 1 per cent in 2005, with Chinese etailers making inroads. This slowdown in growth means brands must innovate around the shifting luxury landscape.

While the global luxury market is expected to be worth 295 billion euros by 2020, there are five trends transforming the future of luxury according to Trend Briefing.

1. The Quintessential Self

Brands that are offering innovative products, services and experiences that combine self-actualization with true luxury indulgence are at the forefront.The wealthy are seeking unique experiences, a quest for self-improvement without compromising self-indulgence.

2. Very Important Data

The luxury segment depends upon anticipating, and then exceeding customer expectations. Connected consumers around the world know that brands are using their personal data: location, purchase history, media preferences, and more. One powerful form of luxury in the age of personal data? Total data security.

For example, in July 2016, luxury Italian jeweler Bvlgari partnered with WISeKey on an app that provides security around mobile payments and other smartphone data. The Bvlgari Vault app is a secure platform that can protect a user's passwords, banking information, pictures, videos and messages. The information is stored by the app in a high-security bunker in the Swiss Alps. The app can be unlocked in a number of secure ways, including via TouchID and face recognition. Users pay 53 US dollars a year.

3. Philanthropy

For the ultra-ultra-rich, philanthropy is the status story. How much they give away is a sign of their status. Furthermore, millions of affluent consumers feel trapped in a guilt spiral when it comes to the negative impacts – on the environment, society and their health – of their consumption. The real luxury for these consumers? Indulgence without the guilt.

4. The Extravagance Philosophy

The on-demand and access economies are now assumed for millions around the world, but what about for the ultra wealthy? Everyone can have a personal driver via Uber. So what next for affluent consumers, always seeking to distinguish themselves from the masses? The very real benefits that on-demand and access bring - freedom from the hassle of ownership, instant gratification, and more - are universal.

5. Post-Demographic Luxury

The old demographic model which analysed consumer behaviors based on age, gender, location, income bracket and more – is becoming out-dated. Instead, consumers are freer than ever to construct lifestyles and attitudes of their own choosing. This is possible due to unlimited access to information, the erosion of old social conventions, endless choice, etc.

Smart luxury brands will embrace new and previously marginalized identities, daring new brand positionings, and new customer expectations when it comes to the how, where and when of a luxury product or experience.

Source: The Future of Luxury report, www.trendwatching.com

Photo credit: Bvlgari Vault App