Luxury Businesses Are Changing How They Operate
From innovative materials to including AI in changing luxury brand operations, LUXUO explores changing business patterns.
Luxury businesses are changing how they operate in a sign of the times. The old way of doing things no longer applies to today’s nouveau riche who expect modern themes to combine with old-fashioned decadence.
But what does this mean for firms? We explore that fascinating subject here. There’s more to it than you might think.
Top of the list of consumer priorities in the 2020s is conscious luxury. Customers want to know the products they are buying don’t embody suffering or environmental harm.
The growth in popularity of lab diamonds driven by celebrities is a case in point. The wealthy are no longer willing to purchase products that involve the suffering of workers or even the killing of innocent people to push up margins for certain diamond companies.
Conscious luxury is also showing up in the way wealthy people approach purchases. Individuals no longer want to buy things that could cause harm to cultural heritage. Many are looking for items with timeless qualities that won’t require replacement in the near future.
Luxury brands are also experimenting with innovative materials to make their products better. Twenty years ago, you couldn’t buy a luxury car with a carbon fiber chassis but today most brands are doing it.
Materials are a sign of opulence. But what counts as an opulent material changes as research and development continue. Fifty years ago, titanium bikes were meant to be the next big thing. However, other materials supplanted them for various reasons, including ease of manufacturing.
AI Customer Service
Another trend in changing luxury brand operations is the inclusion of advanced AIs to provide customers with better service. Companies want to be always available to their clients at a low cost, regardless of the time or day.
Historically, this meant fielding customer service reps at great expense. Top brands would hire people to sit by the phone throughout the night, waiting for clients to call.
However, new AGIs are making that sort of approach increasingly redundant. These systems are intelligent enough to carry out full-blown conversations on the fly without requiring pre-programming. Computers can also take action to resolve customers’ problems, such as booking appointments on their behalf. That’s not to say that robots can replace regular customer service agents entirely – they can’t yet. But they can get pretty close.
Storing Items Off-Site
Another development we are seeing in the luxury brand space is the trend to store goods locally and off-site. Companies are looking to spread their risks and enable more efficient distribution.
To achieve this, many are turning to flexible self-storage, according to Pink Storage, a firm that operates in the sector. “Businesses want to use self-storage facilities because they keep valuable stock safe. Many firms run 24/7 security and build perimeter fences to keep clients; possessions safe.”
Experiential retail is another trend emerging in the luxury sector. Brands are attempting to curate new experiences for clients that go beyond walking into a store, picking up items, paying for them, and walking out.
Historically, some clothing brands attempted this. Hollister, for instance, would dim the lights in its stores and add mist to the environment to give it an other-worldly feel.
Most companies are using VIP experiences to boost customer engagement. Instead of simply inviting people into a store, they are taking them on a journey of their companies and allowing them behind the scenes to see how everything works.
These experiences sound gimmicky, but they help build closer relationships between brands and their clients. Customers feel like they trust the brand more and can build rapport with it.
It is also enjoyable for customers who admire the brand. A chance to see how the entire operation works and what’s coming down the pike next is an exciting opportunity for many people.
Membership programs are another way luxury businesses are changing how they operate. Instead of asking customers to pay upfront for goods, many firms are offering packages of services that provide better value than selling products individually.
These programs often contain a convenience element. For example, brands will curate products automatically for their customers based on their preferences, or they will deliver them regularly, making new shipments as soon as existing product levels run low.
The addition of special privileges for loyal customers can be even more effective. VIP experiences encourage customers to spend more to ensure they receive the best treatment.
Integrated Technology In Products
Some brands are also taking the bold move of integrating technology into their products. Historically, this hasn’t always worked particularly well, but in today’s economy, it is finding more traction.
For example, ultra-high-end clothes makers are using expensive nanotechnologies to improve their clothing’s performance. These materials have hydrophobic properties, meaning they never get wet or stained while remaining breathable like a normal garment.
Other examples include limited edition collections of already popular products. Luxury automakers often build runs of a dozen or less of unique models that include special materials, new computer management, or advanced connectivity.
Virtual Reality Shopping Experiences
We’re also seeing many of these firms incorporate so-called “virtual reality” shopping experiences into their customer journeys. The idea here is to provide people with the same level of in-person excitement without the need to travel thousands of miles by plane.
Again, the technology isn’t perfect yet, but it does provide insight into the future of shopping and retail therapy. Ultimately, the concept has the capacity to be even better than conventional shopping because it lets designers build whatever environment they want. They are no longer restricted to the size and layout of the mall unit.
Another change to luxury business operations is their increasing e-commerce presence. Companies are realizing that the best way for them to be successful is to appeal to younger audiences online.
Again, these strategies go against their instincts, but they are nevertheless essential. Brands need to list their products online to attract the attention of wealthy individuals who rarely, if ever, take a trip to the mall.
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