Transforming Luxury from The Business of Fashion

Today, the channels that consumers can now use to connect with brands to elicit a range of interactions have multiplied, dramatically. With major new platforms emerging all over the world, the retail networks utilised by luxury brands are evolving at an unprecedented pace to include a huge number of customer touch points — each a distinct opportunity for growth but requiring an idiosyncratic strategy for success.

Due to mobile-commerce and social-commerce, when, how and why a consumer transacts with a brand has been reimagined entirely. The linear paths to purchase with which we are so familiar are being replaced by new conduits that combine digital content with customer-centric retail strategies to make transacting as engaging, enjoyable and instantaneous as possible.

There is one region responsible for the lion’s share of retail innovation: China. The engine of the luxury industry’s growth for decades is now the epicentre of the most significant retail innovation in the market.

From buy now, to swipe up, unboxing to bounce houses, KOLs, KOCs, shoppable video, live streaming, digital clienteling, resale sites, marketplaces, macro and micro influencers — luxury’s retail channels have been reimagined at scale. Now, that innovation is beginning to shape global retail strategy.

Follow the series to ensure you never miss an episode and discover actionable insights into the opportunities and challenges a redefined industry will bring and how luxury’s transformation will impact your business.

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Over the Transforming Luxury podcast series, as we discussed market dynamics, product strategies, customer experiences, emerging technologies, new retail channels and our imminent entry into the metaverse, the pressing need and increasing demand for systemic change to create a more sustainable industry was a consistent theme.

In this final episode of Transforming Luxury, a special six-episode series presented by Klarna, we confront the distinct uncertainty and disruption facing the luxury industry and us all, as a result of the climate crisis.

In 2020, BoF reported that the fashion industry’s greenhouse gas emissions range from an estimated 4 percent to 10 percent of the global total. Without significant intervention, the industry will not align with global goals to limit global warming to no more than 1.5 degrees Celsius. Failure to do so is predicted to have catastrophic consequences for civilisation, outlined in the UN’s IPCC report 2021.

However, if bold enough leadership is willing to reimagine how the industry operates, equipped with the deep pockets of market leaders and further enforcing the existing, rigorous quality controls already in place, luxury would be " uniquely positioned to transform itself,” as stated by SVP of supply chain innovation at the Savory Institute, Megan Meiklejohn.

To hear more about the role sustainability must play throughout the luxury goods industry, BoF gathered four global authorities to discuss how luxury can become more responsible with host Robin Mellery-Pratt.

Follow the series to ensure you never miss an episode and discover actionable insights into the opportunities and challenges a redefined industry will bring and how luxury’s transformation will impact your business.

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For comments, questions, or speaker ideas, please e-mail: [email protected].

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In Episode 2 of Transforming Luxury, BoF’s new podcast presented by Klarna, we investigate what will inform the luxury product mix of the future.

Indeed, the definition of a luxury good has expanded dramatically in recent years to now include a host of disruptive new categories, from the luxury sneakerhead culture that dominated the past decade, to collectibles, curios, NFTs and even some mass produced products capturing attention in the luxury market.

Evolving consumer sentiment is also increasingly influencing luxury’s manufacturing process. Today, customers demand brands and businesses authentically represent global cultures in a way that serves the communities themselves and not the industry’s shareholders. They also hold brands accountable for the impact of their supply chains and production processes. Yet, workers’ rights was among the worst-performing categories in BoF’s Sustainability Index.

Follow the series to ensure you never miss an episode and discover actionable insights into the opportunities and challenges a redefined industry will bring and how luxury’s transformation will impact your business.

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For comments, questions, or speaker ideas, please e-mail: [email protected].

For all sponsorship enquiries, it’s: [email protected].

Critic Robin Givhan, analyst Luca Solca, author Dana Thomas and Métier founder Melissa Morris discuss how luxury became a winners-take-all market and how growing consumer scrutiny is driving change.

BoF is investigating how market disruption, new technology and increasing consumer scrutiny are driving transformative change in the $300 billion luxury goods market, in an exclusive new podcast series presented by Klarna.

As the extraordinary events of 2020 — from the global pandemic, lockdowns and economic downturns to the accelerating climate crisis and social justice movements — impacted the luxury industry, scale-driven advantages widened the performance gap between the industry’s super winners and the rest of the market. In 2020, BoF reported that 75 percent of companies did not generate enough economic profit to cover the cost of their capital. Yet, the leading mega brands and conglomerates reported record sales.

However, a growing dissonance is emerging between luxury’s traditional values of scarcity and exclusivity, and the emergence of a more inclusive, egalitarian and sustainable global consumer culture, making the luxury industry vulnerable to shifting consumer sentiment. Today, businesses must respond to growing consumer scrutiny around the sociological and ecological impact of how they operate and what they produce.

Follow the series to ensure you never miss an episode and discover actionable insights into the opportunities and challenges a redefined industry will bring and how luxury’s transformation will impact your business.

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For comments, questions, or speaker ideas, please e-mail: [email protected].

For all sponsorship enquiries, it’s: [email protected].

The metaverse — a term originally coined by the author Neal Stephenson in his sci-fi novel ‘Snow Crash’ — is now widely used to describe how our physical realities will be augmented and overlaid by ambient and accessible digital experiences and services.

Luxury’s entrance into the metaverse was expedited by many brands’ leverage of new technologies to speak to consumers when lockdowns removed physical interactions in bricks-and-mortar stores and in-person events. But the impact of virtual and augmented reality on consumer behaviour preceded 2020: Forbes reported in 2019 that 40 percent of consumers were willing to spend more on a product they can experience through augmented reality technology first.

From stores that guide you from the street to luxury items designed exclusively for the smart glasses that every major tech platform is working on, the future of luxury is already here — it’s just not evenly distributed.To discover what impact the metaverse will have on the future of the luxury goods industry, BoF spoke with four global experts to share their insights with host Robin Mellery-Pratt.

Expert Commentators:

Ommy Akhe is one of the breakout stars of this first generation of AR. The creative technologist specialises in augmented reality, making experiential software and AR prototypes through tools such as Facebook’s Spark AR software.. Previously working as an ethical hacker in information security, the London-based developer has now created dozens of filters for platforms such as Instagram Stories and Facebook.

“In the digital space, there’s obviously a high profit margin because digital products are infinitely scalable. You write one programme or you have one object, and obviously this can be duplicated, whether it be a million times or one time.”

Sergey Arkhangelskiy is the founder and CEO of Wanna AR solutions, having previously worked as a lead engineer in Google’s search ranking team. Wanna has collaborated with the likes of Gucci, providing the technology behind their virtual try-ons and the creation of the brand’s first virtual sneakers.

“Digital fashion is for younger people, for Gen-Z, for millennials, for the people who are mobile, native or digital age [...] These people are critically important for those brands — this is the new generation of consumers, they’re becoming the purchasing power.”

Alissa Aulbekova and Paula Sello are co-founders and creative directors behind Auroboros, the first digital collection shown in London Fashion Week’s DiscoveryLAB. Auroboros is also part of the Sarabande Foundation. Aulbekovas previously worked at Dazed magazine as a fashion stylist, while Sello held previous roles as an archive assistant at Chanel and at Vogue as a fashion stylist.

“Since coming from this gaming generation, we’re really understood drop culture and how these games are becoming so hyperreal. It’s more a gamified experience [...] it’s all blurring lines between digital fashion and what you wear on your social media.”

Follow the series to ensure you never miss an episode and discover actionable insights into the opportunities and challenges a redefined industry will bring and how luxury’s transformation will impact your business.

Sign up for BoF’s Daily Digest newsletter.

For comments, questions, or speaker ideas, please e-mail: [email protected].

For all sponsorship enquiries, it’s: [email protected].