Interview with Pierre Mercier, Senior Partner, The Boston Consulting Group
Ahead of the Luxury Law Summit we caught up with our opening keynote speaker, Pierre Mercier, Senior Partner at The Boston Consulting Group to ask him what he felt were the three key challenges facing the industry, where he sees opportunities for the future, as well what the next big thing will be.
LLS: What would you say were three key challenges facing luxury businesses over the next five years?
Pierre: The three biggest challenges facing luxury businesses over the next five years are:
- Omnichannel transformation– whilst it is a big opportunity to grow there are multiple pitfalls – delivering a consistently flawless “luxury” online experience requires highly robust, engineered processes and standards as well as specific skillsets. ‘Artisanal’ approaches do not work here.
- Recruiting of younger clients– brands need to learn how to appeal to millennials that have different values, expectations and spending behaviours than previous generations.
- The evolution of Chinese luxury consumer behaviours– Chinese shoppers have been and continue to be the largest driver of growth, however they are more sophisticated and discriminating so it is important for luxury businesses to read the trends and adapt.We would also add a 4th:
- Casualization– the recent rise in casualwear poses the issue of how to reconcile luxury with casualization. Businesses will need to adapt and ensure that high luxury and casual co-exist.
LLS: If you had to name one single factor, which will provide increased opportunities for the luxury sector over the next five years, what would it be?
Pierre: The growth of casualization will provide increased opportunities for the luxury sector over the next five years. As brands continue to develop more casual styles, they will expand the number of occasions for which they are relevant. But as they grow, sometimes at explosive paces, the challenge becomes to retain and cultivate an image of exclusivity and luxury while deriving an increased proportion of business from products not traditionally associated with the sector.
LLS: Do you think that businesses in the luxury sector are addressing gender equality issues well – what’s the greatest challenge?
Pierre: Whilst more can always be done, gender equality is not a major issue in the luxury sector as it typically has a female heavy workforce. Diversity more broadly is an issue that should be treated as an opportunity, where brands should think about how to fully reflect newer generation’s tastes and aspirations in the boardroom. They need to ensure they have a representative leadership structure that can help better recognise what shoppers from China, India and the Middle East really expect from luxury brands now, as well as keeping an eye on markets such as Africa for tomorrow.
LLS: More luxury brands are embracing the opportunities offered by new technologies – what do you think will be the next big thing in luxury brand retailing or product?
Pierre: New technologies have been embraced by many luxury brands already to help improve shopper experience, for example connected fitting rooms, smart mirrors and the use of RFID (radio-frequency identification) in fitting rooms as well as to help fight against counterfeiting.
Whilst there are many promising technologies including AI, AR, Blockchain, facial recognition and 3D printing, it’s important for businesses to not just blindly jump on to the technology bandwagon. Technology for the sake of it is not useful, it needs to be employed to improve the shopper experience and/or improve competitiveness. Brands need to find the right modes of interaction that help fulfil different shopper cohort’s needs and aren’t perceived as overly intrusive. They also need to be aware of upcoming regulations, such as GDPR, to make sure customer data collected through these means is well protected.
Pierre will be the opening keynote at the Luxury Law Summit. He will be taking a broad look at the global luxury market, the latest trends and where growth is coming from. Click here to view the full agenda