The few luxury winners of 2024 – Bottega Veneta, Brunello Cucinelli, Hermès, Loro Piana and Zegna share a number of strengths: a sense of identity, exceptional product quality and understanding of the emerging technologies.
The rate of revenue growth expected by the market is extremely difficult to achieve. Price increases worked for a while, but by 2024 even the wealthy got tired of being milked. With that in mind, what could the purveyors of luxury do next?
1. DRAMATICALLY EXPAND THE AUDIENCE
Fast expansion comes with weaker bonds. Appealing to a wide variety of consumers would further dilute the brands’ sense of identity and limit opportunities for long-term strategic decision-making.
2. CREATE NEW PRODUCT / SERVICE CATEGORIES
Before Chanel N°5, selling perfume that complimented their design aesthetic was not something fashion companies did. Today, it is where many draw much of their profit. What could be the next long-term opportunity and does it have to be something physical?
3. RECONSIDER THE PARADIGM
Figure out who they cater to, what value they could produce and then lean into delivering as much of that value to that audience as they can, with as little mindless, unstrategic chaff around it as humanly possible.
- Would that make the most amount of money? Probably not.
- Do all companies produce value? Unlikely.
- Would it crater companies’ market valuation? Not necessarily.
In combination with a promising new product or service launch, a well-articulated re-calibration could put a business on a much more realistic and, potentially, lucrative footing. The void is nigh, but not inevitable; the way out requires the luxury of having an opinion.
KOTOMIN 