The new luxury customer relies more on his own experience

Someone asked me to translate into English this article published on Fashion United on April 18th. Here is the link of the original article:

The behaviours towards luxury products are changing both geographically and socially. For example, the new generation of the “Millennials”, the young people born between the 80s and 90s seem to be revolutionizing the market. To get a closer view on the new luxury consumer trends, we have interviewed Renato Mosca, expert of luxury goods and founder of Training Luxury, a company devoted to training personnel of international companies in luxury retail.

FashionUnited: How would you describe the current luxury market? Have you noticed any changes in consumer behaviours during the past years?

Renato Mosca: The luxury market segment is now experiencing a new and very interesting phase, in which the strategic positioning is important. The new client of luxury, the Asian in particular, is less loyal to brands, more digital, compares, takes information and doesn’t allow the brands to drive him, relying more on his personal experience and on the other users recommendations. We are officially in the “experience economy” and clearly the environment and the service have the same importance as the product itself for the final customer.

It looks like there is a stagnation of the consumption of luxury products in Europe and Asia. Where are the brands looking at right now?

The expansion of the brands in the direction of emerging markets is slowing down and the development of the sales turnover must be generated through an «organic» growth (same number of points of sales) more then through the simple increase of stores. Moreover, the flow of the Chinese and Russian clients, who played a main role in the sales of the sector in Europe, is affected by anti-corruption internal laws and by the crisis, with negative consequences for all brands. It is clear that in this scenario, new phenomenon with attractive products, good marketing and interesting price positioning such as Michael Kors are taking advantage from the situation.

For the new “Eldorado”, India seems to be still a very complicated market. Africa keeps being an interesting destination, whereas it’s not comparable for business volume to a new China. It is then crucial for the brands to return to two fundamental aspects: innovation in the product and impeccable customer service.

Which strategy are the fashion brands using or planning for the “Millennials”?

As I’ve mentioned earlier, the Millenials are the future potential clients and have a very unique and challenging approach for the luxury brands. This typology of the customer adores being part of what is happening with the brands, taking an active part in the communication (videos, social media, blogs), buying via non-conventional channels (omnichannel). This customer challenges the concept of exclusivity by wanting to buy online. For the brands it is then key to find the balance between being attractive for these clients without loosing its’ aura of uniqueness.

Which are the best markets for luxury goods right now?

You should always take into consideration that several of the main luxury markets are affected positively or negatively by the tourists flow. There is a significant recovery of the markets like Japan and USA that were suffering a little for the internal crisis in the past years.

Which are the current retail trends? What percentage is sold online and in stores?

Even though the online sales are grow each year at two digits, we should say that the majority of purchases are still made in the traditional channel of the stores. At the same time, more and more the purchases offline are influenced by previous online view of the product (more than 20 per cent).

The growth in the retail business will happen through the ability of creating stronger relationships with the customers, by making them live unique experiences and by marking the difference with a more personalized service. I believe that this will be the focus of the brands for the next few years.

Which are the characteristics of a good sales assistant of a luxury brand?

It’s natural that what I’ve just mentioned will influence the identification of the profile of the sales assistant of luxury brands and also the hiring criteria of the companies. The luxury sales assistant today has to be a super specialist, needs to speak more than one language, with a higher education level, great technical knowledge of the product, but, at the same time, with great relational competencies and emotional intelligence. Furthermore, if until some years ago it was enough to have just talent to be able to sell, today selling (and selling luxury in the first place) is a job that requires efforts, preparation and daily training. It is not an exaggeration to say that the new role of the luxury sales assistant is at the same level of the «private bank executive»: in the end, the final customer is the same.

The last few achievements and projects of Training Luxury?

This has been quite an intense year: we have worked practically in the whole world from Japan to Qatar, from Europe to USA, Mexico and South America. We have settled up in London with a base for the Northern Europe. We are always working in finding practical solutions for the sales teams, in order to create a high customer loyalty, executing high-level customer service. At the same time, the companies are realizing that it’s fundamental that the leaders create the conditions so that people in front line could achieve high performances. For this reason, we are working closer to the organizations supporting them with coaching and people management programs.

One of the most interesting projects that we are developing lately is the «Retail Safari». It is a workshop for middle and top management focus on innovating in their own business area. It’s a very interesting mix of market visit and classroom activity, with the goal for the participants to come up with concrete action plans for the company.