Translated by
Roberta HERRERA
Published
Jul 5, 2024
In its inaugural study focused on the high-end sector, the audit firm KPMG presents a report titled “Savoir-faire and innovation: how does luxury continue to inspire?” To fully grasp how this profound transformation is viewed by industry players, KPMG conducted extensive surveys and interviews with experts and professionals both in France and internationally. These valuable insights were further enriched by a detailed quantitative survey carried out in collaboration with the Institut Potloc, which gathered responses from 200 representatives of small, medium, and large luxury companies across Europe, the United States, and Asia.
The study highlights several significant trends that are shaping the future of luxury. First and foremost, the digitalization of the purchasing process has become a critical factor, especially noted by 40% of respondents, with an even higher emphasis in the APAC region at 65%. This trend underscores the growing importance of e-commerce and digital engagement in reaching luxury consumers. Second, the personalization of products and services is crucial for 22% of those surveyed, reflecting the increasing demand for bespoke and tailored luxury experiences. Third, sustainability and ethical criteria are becoming increasingly important, with 21% of respondents considering them key aspects of luxury product purchases.
Moreover, artificial intelligence (AI) has become indispensable for luxury brands, particularly in enhancing personalization, both in products and customer experiences, whether online or in-store. The report underscores the critical importance of generative AI, which is cited as a major factor in customer engagement within the luxury sector. For 41% of professionals surveyed, generative AI has the most significant impact, with a stronger conviction observed in Asian markets.
Sustainability and the principles of environmental, social, and governance (ESG) are now considered top priorities at the highest levels of corporate decision-making. While 74% of respondents believe that regulations related to ethical practices will have a moderate impact on their sourcing methods and working conditions, nearly 65% anticipate moderate impacts from restrictions on certain raw materials, extractive practices, and types of consumption, including fur, exotic skins, and alcohol.
The emphasis on sustainability extends throughout the fashion ecosystem, primarily viewed through the product lens. “Sustainability ranks in the top three priorities for the sector, just behind the uniqueness of products and ahead of social responsibility,” the study reports. Notably, 41% of respondents maintain that “the quality and artisanal nature of products remain a priority.”
The luxury industry enters a new era
“This study shows that the luxury industry is entering a new era, marked by increased attention to environmental and biodiversity issues, as well as new perspectives in customer experience and engagement opened by new technologies, particularly generative AI,” summarized Guillaume des Rotours, head of the luxury sector for KPMG in France.
The study’s authors emphasize the necessity of helping smaller players finance the transition, particularly in reducing carbon footprints and preserving biodiversity. Throughout the product lifecycle, “the innovations implemented by luxury players to achieve their sustainability goals impact all stages of the value chain, from raw material sourcing to product end-of-life,” they noted.
To best support this transition, talent management remains crucial. Identifying and attracting the right profiles with expertise in technology and sustainability is essential. Additionally, luxury houses must support the development of their employees’ skills on emerging topics while preserving and transmitting traditional know-how. For 41% of professionals surveyed, investment in continuous training programs is a priority.
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