Key themes from Walpole’s British Luxury Summit 2021

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Big Idea
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Explore the headlines from the Future of British Luxury Summit, from ‘carpe diem’ mindsets infiltrating luxury to travel and spending forecasts

A pro-risk future

In a presentation exploring the Global Outlook for Luxury in 2021/2022, Federica Levato, a partner at Bain & Co, shared a series of key forecasts for the remainder of the year, with emphasis on the new mantras that will shape luxury retail, travel and experiences in the year ahead. Describing 2020 as an ‘annus horribilis’ in which Bain & Co reported luxury declined 23% at current exchange rates, Levato forecast global luxury sector recovery to 2019 levels by H1 2022.

Driving this, Levato noted, is a growing attitude among global luxury consumers to embrace a ‘yolo’ (you only live once) mindset, which is fuelling a pro-risk with regard to purchases. Looking ahead, this has potential to bolster luxury travel and experiences, as people seek to live in the moment. Furthermore, Bain & Co notes that the rise of WFA (work from anywhere) will also alter the global map for where luxury brands not only need to operate – for example, wealth ruralisation in America – but where its products and services are relevant.

From Covid to carpe diem

Building on the themes of Bain & Co’s presentation, a panel discussion focusing on the empowered luxury customer emerging as a result of Covid-19 examined some of the more immediate shifts that luxury brands can prepare for. Featuring panellists including Harrods managing director Michael Ward, Melissa Mullen, general manager at Jo Malone London, and Camille Martin, chief brand officer at Dunhill, the discussion centred on ways to better engage and immerse consumers and build greater brand sentiment.

Commenting on efforts made over the past 18 months, Mullen described how being reactive to shopper needs in the moment led to the brand adding video messaging to online gift purchases: ‘This gives a mix of experiences… it’s not just about data but how you can serve your customer needs in this moment better. With the video with gift message service, it didn’t need to be perfect – you miss a wedding but can send a video note, which made it more of an experience upon receipt.’

At Dunhill, meanwhile, the focus is on appealing to Generation Z through content, and wanting to communicate a new sense of Britishness and London’s diversity and energy as it moves out of lockdowns – a concept it is repeating by building communities and content that is localised; for example, in Japan and China. Of note, Harrods’ Michael Ward highlighted how there are perhaps three to four months left until the money some consumers accrued during lockdowns – as well as the attitude to treat themselves – begins to dry up. Speaking to the audience, he noted that brands must now jostle to win spend while people are enjoying socialising, or are looking ahead to Christmas events for which they will seek out luxury goods.

Published by:

20 September 2021

Author: Kathryn Bishop

Image: Showroom-X, Australia

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Loewe autumn/winter 2021

Sustainable systems

Demonstrating how sustainable attitudes and actions are now underpinning the sector, several of the summit’s conversations discussed greener or more conscious new directions, from luxury goods to storytelling and brands’ future commitments. Speaking to the audience on the themes of sustainability, community and innovation, British accessories designer Anya Hindmarch CBE described sustainability as the North Star now driving its activities – but also common sense for the business. Following on from its 2007 I’m not a Plastic Bag design, Hindmarch explained how the company has recently created a new fabric and collection made from recycled plastic bottles and coated with a recycled PVD from car windscreens. Taking two years to make and, according to Hindmarch, being expensive to develop, she argued that such efforts are laser-focused on what customers want.

Elsewhere, Jamie Gill, CEO of Roksanda, discussed how Covid-19 has forced a reflection point for luxury in creating products built to last. The business is now working towards using 100% certified sustainable fabrics – currently at more than 50% of this target – with its 2022 collection set to be made from fully certified sustainable, organic or recycled fabrics. Gill described how the brand has worked directly with suppliers to create cotton of the premium quality required, over several seasons, but noted that these would not have existed without this R&D – pointing to how brands can use eco-needs to drive innovation and collaboration in their respective luxury sectors, without waiting for suppliers or supply chains to provide it.

Complex opportunities in China

In an enlightening presentation focused on luxury in China, Adam Knight, co-founder and CEO of insights consultancy TONG, shared key lessons for luxury brands operating in or seeking to target the Chinese market in this inter-Covid moment.

In brief, these included a focus on the shifting geographies of where luxury spending is happening in China. Amid a drop in global travel and a repatriation of spend, domestic retail is booming online and offline. According to Knight, China's Hainan duty-free zone must be on all companies’ radar, describing it as 'fast becoming the future Dubai'. Secondly, more diverse interests, needs and demographics are altering the luxury consumer trope in China, with Gen Z buying into brands that represent their values and communities. Of note, younger luxurians want to get back in touch with nature and the outdoors, with many embracing deceleration as a counter-culture.

Elsewhere, the Made in China label is also being re-evaluated as a new generation of luxurians come of age more culturally confident. The guochao movement is fostering a modern sense of pride in Chinese heritage, with a desire to reconnect through contemporary fashion, design and even e-commerce platforms dedicated to guochao products, driven by brands such as Anta Sports, Shushu/Tong and unstoppable beauty brand Florasis. In this vein, Knight notes how a content-commerce revolution is powering a new wave of e-commerce in China, headed by Bilibili, Douyin (TikTok) and Xiaohongshu (Little Red Book), with the former a gaming platform that is driving beauty engagement and welcoming a 20-fold rise in premium brands using it, such as Shiseido, Chanel and Lancôme. Yet government crackdowns on web use and gaming means companies must be prepared to reframe some content, especially as Chinese authorities look to promote a new era of positive social influencers online.

From this, politics are now becoming a far greater matter for the luxury sector than ever before, with boycotts on Chinese materials such as cotton by global brands such as Burberry and Adidas leaving some Western labels out of favour. Elsewhere, tariffs have been placed on Australian wines and imported goods, which means global brands need to pay greater attention to government speeches and policies.

‘It’s not just about data but how you can serve your customer needs in this moment better’
Melissa Mullen, general manager, Jo Malone London
 
 

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