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Spotlight On: The luxury industry, a new digital customer and making the right technology choices

2021-03-15

This new younger and digital native luxury consumer is already reimagining the luxury industry. In our latest article we shine the spotlight on what this means for luxury brands in the here and now.

Spotlight On: The luxury industry, a new digital customer and making the right technology choices 

The luxury industry is changing. Prior to 2020, we were beginning to see the emergence of a new younger and digital native luxury consumer. They are now firmly here to stay. Alongside this, with live shows and real-life experiences being temporarily halted, as well as the link between luxury purchases and travel being severed, digitalisation has now become a strategic necessity for brands.  So, what does the future look like and how are we facing these challenges head on at Auverture? 

The new breed of luxury consumer 

What do we know about luxury sales when it comes to today’s younger luxury consumer?  - In 2018, Millennials and Gen Z accounted for 47% of luxury customers and made 33% of all luxury purchases. It’s important to note that in 2018, they accounted for virtually all of the market’s growth, compared with 85% in 2017.  - They are expected to account for 45% of total luxury goods sales by 2025 and will represent a 130% growth opportunity.  - 60% of luxury customers in 2026 will be Millennials and Gen Z. 

Clearly, this younger customer is already having a tremendous impact on the reimagining of the industry and will continue to do so into the future. The questions many brands are facing is what this means for the here and now. 

First and foremost, brands need to adapt their luxury values to cater to evolving expectations. Specifically:  - 60% of Millennials and Gen Z say collaborations increase their willingness to buy into a product – this has driven a growth in collaborations to provide the required uniqueness and identity statement.  - Pricing strategies are changing to encompass more entry-level price points and accessible products.  - The desire for personalisation and tailored digital experiences has driven the need for digitalisation and new technology solutions across the industry. 

It’s with the final point that we’re set to witness the biggest change. Technology and digitalisation must be at the forefront of strategic thinking.

Making the most of Augmented Reality (AR) 

Over the last 12 months we’ve already seen the likes of Chanel enhance their physical marketing efforts by integrating AR into their New York pop-up. Both Dior and Gucci have used AR lenses for a digital smartphone experience, while Burberry launched an AR shopping tool through Google search technology. 

What does this mean for us at Auverture? According to our CEO, Thomas de Haas: “Augmented reality is essential to integrate into our business in the next 12 months in terms of creating the offline luxury jewellery experience online. Offering the opportunity to try jewellery on in a digital space means it is so much more accessible. 

“It also brings with it the opportunity for a responsible solution for real-world collaboration in a digital space across geographical borders for multiple designers. With the opportunities around AI new advancements can be found in relation to the curation of our products to consumers across multiple touchpoints.” 

It’s a journey we’re excited to be embarking on. 

The need for both consistent messaging and personalisation 

Today’s luxury consumers expect a consistent message across platforms and channels. According to Thomas: “We know that the luxury consumer is used to interacting with brands – whether on social, offline, online, or in-store – and they also expect a tailored and consistent customer journey. In a high-touch business such as ours where we need to engage with our customer across multiple touchpoints in a variety of channels, we must manage the intersection of commerce, content and community.” 

Personalisation also has a role to play. With 72% of consumers only engaging with personalised messaging, it’s key for luxury brands to get this right. Whereby fast-fashion customers expect personalisation through the likes of digital display, email and paid search, luxury requires slightly different tailored tactics that seamlessly integrate within the luxury ecosystem. This may include tailored onsite experiences that dynamically provide relevant product selections in line with customer preference and group. It is essential to bring the exclusive offline in-store experience to online – this is something we’re striving for at Auverture. 

Embracing the need for change 

This new breed of luxury customer demands change. It’s key for luxury brands to embrace this change and make it a strategic priority. At Auverture we’re excited for what the future holds for technology in the luxury industry.

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