The Chinese market and the digital revolution are among the keys to understanding the luxury sector
Fourth Edition of the IE Luxury Barometer report prepared by IE and Mastercard
China is one of the key players influencing the luxury market last year, according to the experts who participated in the IE Luxury Barometer 2017, prepared by IE and Mastercard’s Observatory for the Premium and Prestige Products Market. Other factors they highlighted include the innovative changes brought about by the digital revolution and the need for increased competitiveness in the sector, along with the difficulties companies face in differentiating themselves. All of these factors have helped to position creativity as an essential part of the sector’s strategies. At the same time, building memorable experiences for clients continues to play a pivotal role for the fourth consecutive year. The study reflects the list of key issues cited by industry professionals during 2017, which they say will continue to influence their priorities this year.
Earlier editions of the report were based on the experiences of European experts, while this year the scope of study was expanded to include professionals from the United States, bringing greater relevance and depth to the analysis.
The experts surveyed attribute the increased competitiveness of this segment to market saturation and increasingly demanding customers. Given the growth experienced in previous years, these factors have taken on greater precedence. However, the issues that most concern the main players in the industry are those related to accessibility and customer relations.
IE’s David Millán, author of the report, says: “Once again this report shows the challenges professionals face in offering a truly relevant proposal that provides unique experiences. This, together with increased competitiveness, has made creativity indispensable within the luxury sector’s strategies: seeking differentiation through real values rather than greater market share.” He adds: “Luxury companies cannot forget that their soul lies in their creative capacity. It is the only base on which to build the strategy of a luxury company. The focus on creativity, which the study reflects, is an indication of how luxury companies are gearing up to face greater competitiveness in the market.”
In addition – as has been noted in previous editions of the study – the 2017 IE Luxury Barometer Report highlights the importance of digitizing the sector, positioning the United States as the benchmark and as the country that has best oriented its market strategies in line with these innovative changes.
“We live in the digital era, and that is why a multichannel approach is fundamental to reach increasingly demanding consumers and provide them with value at each point of contact with the brand,” says Ana Díaz, Communications Director at Mastercard Iberia. “We live in the era of experiences that go beyond the purely material. At MasterCard we are aware of this and have responded with our Priceless Cities program so that our cardholders enjoy exclusively, memorable experiences that cannot be found elsewhere. In the final analysis, placing the customer at the center of activities is what helps a luxury brand differentiate itself from the competition.”
“The digital challenge in the luxury sector requires brands to be increasingly inclusive while maintaining exclusivity and authenticity,” explains María Eugenia Girón, Director of IE and Mastercard’s Observatory for the Premium and Prestige Products Market.
“Meeting this challenge is a key priority, and one way to do it is by creating experiences and reinventing the role of stores, for example.”
The objective of the 2017 IE Luxury Barometer is twofold. On the one hand, it aims to ascertain what professionals in the luxury and prestige sector see as the most important aspects and trends of the market in 2017. At the same time it focuses on the implications for the development of the sector these observations could have in the immediate and long-term future. The methodology of the study consisted of two distinct phases. Firstly, quantitative research has been carried out on a global population of 100 people with recognized knowledge of the sector. Secondly, a qualitative study has been developed based on in-depth interviews with a selection of experts to deepen the results of the initial quantitative phase.
About the study
IE Luxury Barometer 2017 has analyzed 40 relevant topics selected to illustrate the most important aspects that have influenced the luxury market during the year. The 2017 edition has sought to gain a deeper understanding of the sector by expanding the selection of experts in Europe and the United States.