Luxury With A Conscience

They call it retail therapy for a reason, it releases happy hormones. Regardless of your station in life, when you buy that holiday, or a piece of jewellery you’ve always wanted, you feel on top of the world. And, this is precisely what makes the luxury sector tick. This sector has successfully created desire and aspiration for its products. It is interesting how you feel you need that scented candle, or you must have the impossibly expensive sneakers. The most successful luxury brands always evoke the ‘I must have this’ feeling. And, the new brands entering the sector know that once they achieve this, they are golden.

Craftsmanship, innovation and exclusivity define the success of these products, but so do, sustainability, and customer experience. The last few years have seen tech take a central role in helping luxury brands hyper-personalise their offerings and deliver the best experience. For instance, think of a beauty brand that offers digital consultation for your skin and based on the results their experts create the perfect moisturiser for you. Or the concierge service that knows the colour and variety of long stem roses your wife likes. In this day and age, where the consumer is a digital native and connected via multiple touchpoints, for brands to succeed, hyper-personalisation is key.

WHEN TECH STEPPED IN 
The consumer today wants more responsiveness and personalisation from brands. This is where tech stepped in to build a supportive infrastructure that would help enhance customer experience. For example, several retail stores now have a smart mirror in the store that helps consumers with virtual try-on technology, and omnichannel purchase. In a fashion store, the virtual assistant in the smart mirror could guide you on the type of dresses that would look good on you, it can help you pick from different styles that might not be available in store, and then even make a purchase on ecommerce if you like something that is not present in the physical store. 

When it comes to hyper-personalisation, data collected across channels is studied and from which emerges a detailed customer profile that can be leveraged to deliver a hyper-personalised experience. For example, your favourite brand can alert you when the jacket you admired but didn’t buy because it would cost you an arm and a leg, goes on sale. A renowned jewellery brand you often buy from, creates customised statement pieces for you, and not just for your anniversary or special occasions.  

Not just this, artificial intelligence (AI) is being used to forecast purchasing trends, and reduce several backend manual processes to speed up production. Blockchain technology is being used to verify authenticity of the products.

Luxury sector companies are adopting technology to enhance their sustainability journeys as well. For example, forecasting for stock management, development of newer materials and processes.

Today, brands need to be ready to deal with consumers that are constantly connected, might want to shop on a digital platform, but pick up the merchandise from the physical store, or have it shipped to their selected location, and all of this superfast.

Given the increase in the number of high net worth individuals (HNI) and the rise in disposable income, the sector is poised for growth. According to Statista, revenue in the Indian luxury goods market amounts to $17.67 billion in 2024, with luxury watches & jewellery as the largest segment. The market is expected to expand annually by 3.17 per cent CAGR from between 2024 and 2029. “With improved ease of doing business and operational models to manage tax and tariff complexities, India offers an increasingly attractive landscape for global luxury brands. The combination of rising demand and a favourable business environment has led to a surge in companies entering the Indian market, eager to capture its growing appetite for luxury,” says, Nikhil Sethi, Partner and National Head, Consumer Goods, KPMG, India

RESPONSIBLE IS FASHIONABLE 
As the sector grows so do the expectation of the consumer. They want to associate with brands that align with their values. They keenly observe a brand’s eco-friendly practices. Therefore, it is essential for brands to communicate about these practices openly with the consumer. From responsible sourcing, manufacturing and even packaging, the consumer wants to know it all.

“As part of our Building Forever 2030 goals from the De Beers group, we are constantly working towards becoming carbon neutral, minimizing our water footprint and delivering a positive impact on biodiversity. We periodically host events with diamond masterclasses that help the consumer make an informed decision about their purchase,” says Amit Pratihari, MD, De Beers India.

Sustainability is no longer a fancy word but has become a way of life for companies in the luxury sector. “We believe small quantity production is true luxury and that much more desirable. Mindful consumption in fashion means buying sensibly, and investing in higher value products that have a longer shelf life. These are things made with integrity i.e. involving craft or the handmade, which in turn sustain livelihoods and ensure craftpersons are able to continue in their native places rather than migrate to cities in search of alternative opportunities,” say David Abraham and Rakesh Thakore, Abraham & Thakore.

When it comes to luxury brands, there is another draw for the consumer -- the resale aspect of luxury items. According to the IMARC Group, the Indian second hand luxury goods market size reached $618.3 million in 2023. It is expected to reach $1,556.2 million by 2032, exhibiting a compound annual growth rate (CAGR) of 10.5 per cent during 2024-2032. This fits into the circular economy aspect where things are re-used instead of being discarded. There are several sites that offer pre-loved luxury products, but if luxury brands start to offer resale of their products through their own retail platforms, it will give them a better control on their goods, and also help in bring in new consumers who are conscious about sustainability. A few luxury brands are experimenting with the concept.

Responsibility also extends to their brand ambassadors. It works both ways, not just the brands but their ambassadors also take an informed decision when choosing a brand to endorse. For them it is essential that the brands core values align with their own. Take, for instance, the B.zero1 Kada Bracelet by Bvlgari, the Roman high jeweller that had Indian actor, Ayushmann Khurrana as the friend of the brand. “The Bvlgari Kada to me is a combination of contemporary style, tradition and luxury. It is the perfect fusion of our history and my core beliefs. It’s not just an accessory, it's a reflection of my own journey, a celebration of strength and determination. It is essential that my style reflects my personality, expresses a story and aligns with my beliefs,” says Khurrana. 



Click here to read interview with Ayushmann Khurrana