Shifting competitive scenario in Fashion Luxury

23 March 2016

The last couple of years have shown a great change in the Fashion & Luxury Goods industry:

  • Market growth is leveling in most geographies, including Far East
  • Store addition is no more sufficient to drive growth given that primary shopping locations are fully saturated, including mainland China

Link to heritage, product freshness and brand appeal represent the three pillars for companies:

  • Link to heritage defends the luxury brand equity in the long term: made in transparency is a must, and Ferragamo/Loro Piana recently adding Made-in on web product pages is a positive sign
  • Product freshness has been the major driver for Valentino impressive growth and Gucci relaunch: both cases are example of how historical brands can be rejuvenated and attract new generations
  • Brand appeal is vital to attract new customers and drive future sales: here Digital plays a fundamental role, especially with Millennials who are digitally native and with nearly double e-commerce penetrations vs Baby Boomers

Digital is already a very significant reality in the Fashion & Luxury Industry:

  • The digital playground accounts 25% of WW Retail Revenues, of which 18% coming from Digitally Contactable clients purchasing in-store, well above e-commerce sales (ca 7% in 2015)
  • Digitally contactable clients spend 15-25% more in store on a yearly basis
  • Cross channel clients spend ca 50% more than in-store clients only, with e-commerce sales (ca 1/3) almost fully additional
  • Economics of e-commerce channel are superior (5-10 Ebitda points) to In-store sales

Since 2013 in collaboration with Exane BNP Paribas, leading equity research firm in Luxury Goods, Contactlab started a significant research stream on purchasing behaviors of digital clients in order to:

  • better understand the Economics of Digital Customers in-store and online
  • map and benchmark major brands positioning on the Digital Agenda
  • understand how Digital Customer Engagement is effectively exploited by brands
Digital Research Steam

Digital Research Stream (2013 – 2016)

23 March 2016
Author Marco Pozzi Senior Advisor
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