FOR THE LUXURY INDUSTRY - ADAPT TO SUCCEED POSITIVE LUXURY
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2017
PREDICTIONS
FOR THE LUXURY INDUSTRY
ADAPT TO SUCCEED
POSITIVE LUXURY
BRANDS TO TRUST
IN PARTNERSHIP WITH
P R E FAC E
With the global luxury market set to reach $326 billion by 2020,
Positive Luxury delves into the factors that companies must consider
to capture the hearts and minds of tomorrow’s consumers. Positive
Luxury’s research highlights the challenges and opportunities faced by
CEOs and industry leaders in the luxury lifestyle sector, serving as a
bellwether for the future of the retail industry as a whole.
Are luxury businesses adapting fast enough to match changing
consumer expectations? Do they need to? As predicting the future
based on past trends becomes harder and harder, how can the luxury
POSITIVE LUXURY
industry stay one step ahead?
ABOUT POSITIVE LUXURY
Positive Luxury connects brands and consumers that care. Our mission
is to inspire people to buy better and influence brands to do better.
Positive Luxury awards the Butterfly Mark to brands demonstrating
positive efforts towards the craftsmanship, service and design of their
businesses.
Positive Luxury was founded in 2011 by Karen Hanton, MBE, founder
of toptable.com, and Diana Verde Nieto, pioneering sustainability
expert and named Luxury Women to Watch 2016.
81 Leonard Street | London | EC2A 4QS
Te l : + 4 4 2 0 3 5 8 2 3 2 1 2
hello@positiveluxury.com
www.positiveluxury.com
2 2 0 1 7 Pre d ictions Report
CONTENTS
INTRODUCTION : DIANA VERDE NIETO | 4
FOREWORD : FOREVERMARK | 5
1./ 2016 RECAP | 6
Case Study: Climate change and the green economy | 10
2./ BUSINESS AS USUAL IS NOT AN OPTION :
The changing face of luxury | 12
Case Study: LSWOP - Luxury Sneakers to Rent | 15
3./ WELCOME TO THE MILLENNIAL WORLD :
Uncertainty is the norm | 16
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Ca s e St u d y : Fo reve r m a r k Di a m o n d s , a D e Be e r s Gro u p Co m p a ny | 20
4 . / FA S T LU X U RY
The ‘Buy Now’ Revolution | 24
Case Study: Reliance Brands | 28
5 . / W H O I A M , N O T W H AT I H AV E :
The quest for status and the new consumer landscape | 30
Case Study: Executive pay and big business | 33
Case Study: Millennials in China | 34
6 . / A N AT I O N O F R O B O T S :
Artificial intelligence & its impact on economic growth | 36
Case Study: Sephora Chat | 40
Case Study: Robots and GDP | 41
C a s e S t u d y : A N e w M a r k e r o f We a l t h - U N S u s t a i n a b l e D e v e l o p m e n t G o a l s | 42
CONCLUSION | 46
SOURCES | 49
IMAGE REFERENCES | 50
ACKNOWLEDGEMENTS | 51
2 0 1 7 Predic tio n s Re po r t 3
INTRODUCTION
The past year saw political, economic and social shifts on a global scale, many of which
will have a longstanding impact on the way consumers behave and spend. How, then,
should the luxury industry respond?
Positive Luxury’s 2017 Predictions for the Luxury Industry report draws on our own
knowledge and that of the brands we work with. In compiling this report, Positive
Luxury also spoke to business leaders, academics and the banking sector to discern
and decode the 2017 trends that are most likely to influence the luxury sector.
We have found that businesses must be brave and willing to adapt if they are to succeed.
For 2017, this is set to manifest in a willingness to engage on a more personal level with
customers, to capitalise on social media data, and to collaborate with incoming content
and delivery models, amongst other actions. We highlight the companies which have
already started to do this, and identify pockets of opportunity for others to seize.
Quick pivots and new approaches can seem counter intuitive to luxury brands, many of
whom have spent decades – if not centuries – growing and establishing their hard-won
reputations. And so adaptation and evolution must, of course, be matched with careful
husbandry of brand history and heritage. Our research shows today’s consumers are as
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mindful as ever of the central pillars of luxury products – quality, craftsmanship, and
effective storytelling.
Yet we live in a world where information, likes and dislikes, ratings and reviews are
spread with growing speed. The luxury brands that succeed will be the ones that
demonstrate their value using innovative methods and platforms that appeal to today’s
technologically adept, social media-fluent consumers.
This is not the first time businesses have had to learn how to adapt quickly amidst
uncertainty. What can businesses do to drive positive change and build the best possible
results for themselves?
The very best brands consciously use themselves and their products as agents of positive
change and growth in society: they have purpose.
Our research identified the rise of a return to purpose for many traditional luxury
brands, and charts the growth of newcomers to the market who are succeeding by
sticking to their principles and providing solutions to pressing problems of societies.
As this report demonstrates, what makes a successful luxury brand today is different
to what it was even a year ago. This report sets out the very behaviours, attitudes and
understandings that are necessary to survive and thrive as a luxury retailer in 2017.
Diana Verde Nieto
CEO, Positive Luxury
4 2 0 1 7 Pre d ictions Report
FOREWORD
To successfully manage a luxury business in 2017 requires the ability to navigate a
dizzying array of factors influencing the sector.
From changing perceptions of what luxury means, to communicating with a new
generation of consumer, the industry is changing at speed.
In the diamond market, which is home to Forevermark, attitudes towards consumption
are changing. Whilst the generation – the millennials - still value deeper relationships
and the traditions of marriage, with diamonds as a symbol of their belief in love and
forever, consumers are increasingly self-purchasing diamond jewellery to celebrate
personal milestones and to express their own individuality.
Globally, another trend is clear; consumers care more than ever about the story behind
their diamond. They are looking for a guarantee of superb quality, expert craftsmanship
and a sense of responsibility from the brand. At Forevermark we are intensely aware
of this, making long-term investments in communities around our mines through
educational, medical, conservation and social initiatives.
Luxury is no longer just about exquisite materials, perfect production quality and
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superb creativity. Luxury is the reassurance that the brand behaves consciously, lives
up to its values, and offers a deeper and more meaningful experience for consumers.
Purchasing patterns are changing and consumers are now “looking under the hood
and kicking the tyres” of luxury brands.
As this report demonstrates, the definition of luxury is evolving with time and across
geographies. At the start of 2017, it is up to the industry to help shape this meaning
and work towards a positive, dynamic future, for our consumers, our businesses, and
for societies at large.
Costantino Papadimitriou
Senior Vice President, Brand Strategy and Innovation,
Forevermark, a diamond brand from
The De Beers Group of Companies
2 0 1 7 Predic tio n s Re po r t 5
1./ RECAP
1/
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2016 RECAP
6 2 0 1 7 Pre d ictions Report
POSITIVE LUXURY 2 0 1 7 Predic tio n s Re po r t 7
2016 was a year marked by global tourism hotspots. The effect added to a volatile global
1./ RECAP
political changes that many saw of the UK’s decision to leave political climate, as the world
as a surprise: what the UK’s the European Union (EU) on navigates the transition from the
Financial Times editor Lionel 23 June, for example, created Republican’s often inflammatory
Barber called “a thundering Sterling depreciation which made rhetoric to actual leadership
repudiation of the status quo.” [1] the UK a temporary haven for and policymaking. In business
The consequences of these shifts foreign shoppers in Q3 2016. As terms, this has translated into
in the luxury industry are already prices in dollar terms fell, relative a continued struggle for U.S.
being felt. spending power in UK stores luxury brands, as they battled
increased, boosting tourism by with a strong dollar and weak
The threat of terrorist attacks, the 8% in H2 2016 compared to the local spending. In contrast,
slowdown of China’s economic first half of the year. [3] Latin Americans chose to focus
activity, geopolitical instability on local spending, maintaining
and the exit of at least one PwC projects UK economic an upwards economic trend for
country from the Eurozone have growth will slow to around 1.2% Mexico and helping to improve
all grown as boardroom concerns in 2017, down from 2% in 2016, Brazil’s economic prospects [8].
over the past year, according to [5] with regulatory and economic
consultant McKinsey’s survey uncertainty dulling appetite for Wherever they were spending in
of more than 1600 global chief spending and investment. 2016, shoppers wanted discounts,
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executives [2]. with cut-price products making
Outside Europe, China’s economic for 75% of apparel purchase
Terrorism alone cast a long slowdown in 2016 was significant across all channels [9]. Outlet
shadow on global trade in 2016. for the luxury sector, as a market malls in China are set to double
Key sourcing regions, such as that provided solid returns for in number by 2020 [10], with
Turkey, suffered from attacks, and many luxury houses after the the EU also demonstrating
at the other end of the shopping 2008 financial crisis. Chinese strong appetite for non-full price
chain, fears of further terrorist GDP growth contracted to 6.7% shopping.
activity dissuaded shoppers in 2016, down from 7.3% in 2014
from visiting cities reliant upon and 10.6% in 2010 [6]. Goldman
tourism spending for growth. Sachs predicts a further fall to
6.5% in 2017, amidst what it calls
Longstanding luxury retail a trend of “bumpy deceleration”
hub Paris suffered in 2016 as for the country [7].
the city saw a 16.6% drop in
foreign tourists year-on-year. Chinese citizens’ spending has
[3] Shoppers’ responses to decreased in line with these
French unrest were particularly figures. In 2016, China’s share of
pronounced from Japan, with the global luxury goods market
a 39% drop, and a 23% drop in total spend fell for the first time
Chinese tourists compared to since records began, decreasing
2015. [4] Elsewhere, despite from 31% in 2015 to 30% last
multiple attacks, Germany’s year [8].
tourism grew slightly at 1.5% [3].
In the United States, Donald
Fluctuating currencies meant Trump’s rise from television
some countries became unexpected personality to President-elect
8 2 0 1 7 Pre d ictions Report
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OPINION : HELEN BRAND, UBS
EXECUTIVE DIRECTOR, EUROPEAN
LUXURY GOODS
“
I think the biggest shift in 2016
was probably the move away
from spending in Europe and
internationally by the Chinese
The brands that are doing well
are those that have constantly
innovated.
without denting your brand
equity, which is difficult. It’s a
question of how to capture that
middle-class consumer.
”
consumer and more towards The biggest question mark for
spending in China, as the brands next year is whether we see
brought down the relative pricing return to the sector,
pricing between mainland because we’ve had no price
China and Europe. increases for two years.
We think growth when we look
A second shift is consumer forward will probably come
behaviour. We are seeing an from middle-class consumers,
increased focus on a desire particularly out of China, so
for newness, and entry-level it’s about making sure you’re
product, in a move away from adapting your brand and your
some of the evergreen product. offer towards that consumer
2 0 1 7 Predic tio n s Re po r t 9
CASE STUDY
Climate change and the green economy
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2015’s COP21 agreement in sound alarming, they may be American competitiveness. But
Paris was a landmark for the difficult for the President-elect to many U.S. multinationals have
green agenda. But while Donald sustain in the long run. already made their decision:
Trump’s anti-climate change Amazon, Facebook, Wal-
views – he posted in a 2012 Trump is facing a global wall Mart and Google are among
tweet that “The concept of global of an opposing sentiment, as the corporations which have
warming was created by and for lenders, shoppers and politicians invested in their own renewable
the Chinese in order to make U.S. choose to invest in low-carbon energy projects and committed
manufacturing non-competitive”, technologies, products and to reducing or eradicating their
told Fox News in January 2016 policies. carbon emissions.
“I think that climate change is
just a very, very expensive form Trump told the New York Times In Europe, coal consumption is
of tax”, and threats throughout in November 2016 he will at its lowest level since 1990 [11].
his presidential campaign to consider “how much it will cost Since then, EU renewable power
withdraw the U.S. from the Paris our companies” and the effect generation has tripled. It is also
climate change agreement – may of accepting climate change on the only power source whose use
10 2 0 1 7 Pre d ictions Reportcontinued to grow after the 2008
financial crisis. Bank of America,
1./ RECAP
JPMorgan Chase, Citigroup,
Morgan Stanley, Credit Suisse
and Wells Fargo are among the
banks that will no longer lend to
coal-based projects.
The migration of the investment
community, businesses, and
political leaders towards
carbon reduction, coupled with
an upcoming generation of
consumers educated in climate
change, is indicative of a global
low-carbon agenda, despite
Trump’s personal views.
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A b ov e : A s o f A p r i l 2 0 1 5 ,
a p p rox i m a t e l y 2 5 % o f p o w e r
c o n s u m e d b y A m a zo n We b S e r v i c e s
c o m e s f ro m re n e w a b l e e n e rg y
s o u rc e s . T h e y h o p e t o b e p o w e re d
b y 5 0 % re n e w a b l e e n e rg y by t h e
e n d o f 2 0 1 7 . ( S o u rc e : A m a z o n)
2 0 1 7 Predic tio n s Re po r t 112./ BUSINESS AS USUAL IS NOT AN OPTION
2/
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BUSINESS
AS USUAL
IS NOT
AN OPTION
The Changing
Face of Luxury
12 2 0 1 7 Pre d ictions ReportPOSITIVE LUXURY 2 0 1 7 Predic tio n s Re po r t 13
Luxury retailers must be prepared reordering (using sensors to The trend for convenient, on-
2./ BUSINESS AS USUAL IS NOT AN OPTION
for and expect rapid change to gauge when a product or supply demand product will impact
shopping models in 2017. High- needs to be reordered to the the luxury sector. Opportunities
spend shoppers can increasingly customer), guaranteed model could arise through developing
discern between brands that upgrades (upgrades to new cars, new ways to market and deliver
are creating and delivering top technology or luxury goods product. Crucially, the old guard
quality service and product and for an annual fee or trade-in), must learn how to collaborate,
those which are not, aided by renting rather than purchasing rather than compete, with
constantly improving technology goods, and ‘do it for me’ – paying innovative, young delivery and
and access to always-available for services like healthy cooking subscription businesses.
online browsing and comparison. and laundry.
As a generation of digital natives Beauty is a vertical which
emerges, these consumers have continues to see strong growth,
markedly different expectations and the subscription model
to the consumers which have has worked particularly well
come before them. Time and in this sector. Prestige beauty
6
ease are at a premium, and new products doubled in growth
business models are emerging to post-Brexit, with sales up 6%
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both please and meet the needs of in the three months following
time-poor, cash-rich consumers. the UK referendum to leave the
European Union, compared to
Subscriptions, reordering, and 3% growth from January to June
services that carry out or deliver 2016.
activities or products seen as
chores for young professionals The strongest post-Brexit beauty
– grocery shopping, cooking, performers have been in the
laundry – are growing. Rental sale of niche fragrances (£125+)
EMERGING
services giving subscribers access and super premium skincare RETAIL MODELS
to a wide range of premium (£200+), both of which reported
products are proliferating across double digit growth. Luxury 1/ REPLENISHMENT
sectors – the success of Netflix subscription boxes, like the UK’s SUBSCRIPTIONS
and Amazon’s investment in Cohorted, have seen success
original content in 2016 being offering customers miniature 2/ ‘SURPRISE ME’
one example. versions of high-end beauty SUBSCRIPTIONS
products [13].
The World Economic Forum 3/ SMART REORDERING
has identified six retail models The global luxury market grew
it predicts will gain traction over 4% year-on-year to €1.08 trillion 4/ GUARANTEED
MODEL UPGRADES
the next decade [12], and several in 2016. E-commerce was the
focus on subscription models. strongest growth sector, and
5/ RENTING
It names them ‘replenishment there was evidence that luxury
subscriptions’ (steady deliveries consumers are directing their 6/ ‘DO IT FOR ME’
of regularly bought products), spending towards personal luxury
‘surprise me’ subscriptions (such experiences, such as luxury travel,
as Birchbox or Glossybox), smart food, wine and fine art [8]. T h e Wo r l d Ec o n o m i c
Fo r u m , 2 0 1 6
14 2 0 1 7 Pre d ictions ReportCASE STUDY
LSWOP:
2./ BUSINESS AS USUAL IS NOT AN OPTION
Luxury Sneakers
to Rent
Fittingly for a generation used
to renting, online luxe sneaker
rental brand LSWOP – a
portmanteau of ‘luxury swop’ –
rents out high-end trainers to its
millennial clients. In return for
a $150 monthly fee, members
can temporarily wear shoes by
designers including Pierre Hardy,
Rick Owens and Valentino.
U.S. founders Jinette Cordero and
Jonathan Escoffery say the model
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“provides members access to a
remarkable luxury experience,
changing the meaning of
ownership.” [14]
The service allows traditional
fashion houses to become
associated with an emerging
consumption model and
delivery service. It also caters to
a consumer that wants reliable,
predictable access to a rapidly
changing flow of luxury product:
one of the new tenets of customer
service in 2017.
2 0 1 7 Predic tio n s Re po r t 153./ WELCOME TO THE MILLENNIAL WORLD
3/
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WELCOME TO
THE
MILLENNIAL
WORLD
Uncertainty is the Norm
16 2 0 1 7 Pre d ictions ReportPOSITIVE LUXURY 2 0 1 7 Predic tio n s Re po r t 17
millennials – today’s 17 to 34 year such as marriage and a home that was marked in 2016 in
3./ WELCOME TO THE MILLENNIAL WORLD
olds – are mercurial consumers, still prove to be major life goals Asian markets. Agility Research
characterised by increasing for millennials. One of the most and Strategy predict a decline
scepticism, an acceptance of interesting characteristics of the in luxury retail in Singapore in
constant flux, and a willingness bridal jewellery category, for 2017, after it recorded a 15% drop
to travel. example, is its ability to weather in millennial interest in spending
economic recessions better more with luxury goods in the
The lives of this age group in 2017 than other diamond jewellery country.
look and feel markedly different categories. In the U.S., millennial
to those of the generations bridal diamond jewellery has A thirst for luxury travel, however,
that came before them. Solid maintained growth since the late is emerging in Asia, with the
institutions and markers of 1990s, irrespective of economic wealthy millennials surveyed
adulthood – from marriage to crises. The De Beers Group from China, India, Singapore,
mortgages – are still desirable, attribute this to the increasing Malaysia, Hong Kong, South
but are being embraced at a later affluence of newlyweds, as more Korea and Taiwan all registering
age. In the UK, owning a home marriages now occur later in above 71% as being interested in
has become a financial difficulty life when people are better foreign travel in 2017. [16]
for many. The millennial age established and have higher
bracket spends £53,000 on rent incomes. Luxury which is immediate and
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by the time they reach the age ephemeral, such as fine wine,
of 30 - £44,000 more than their Yet in a culture of impermanence, luxury groceries, travel and
parents’ generation. In contrast, a generation accustomed to beauty is set to enjoy growth, as
50 to 70-year-olds spent £9,000, uncertainty, whether it be consumers favour experiences.
in today’s money. [15] political, personal or economic
has emerged. A desire for travel, Social media is emerging as
According to The De Beers experiences, and authenticity from a deeply valuable source of
Group’s 2016 Diamond Insight brands characterises millennial millennial consumers’ intent.
Report, traditional institutions attitudes to consumption, a trend Social image aggregator Pinterest,
18 2 0 1 7 Pre d ictions Reportfor example, identified its top decision, considering Pinterest existing and emerging customers.
3./ WELCOME TO THE MILLENNIAL WORLD
consumer trends for 2017 by posted a +300% increase in Yet data analysts Brandwatch
analysing saved images and searches related to snow, rather discovered that 99.63% of
searches that had a considerable than beach-based vacations Twitter conversation on the 32
year-on-year increase in interest for the last half of 2016. Agility luxury fashion brands it analysed
(25% and higher), critical mass Research and Strategy also noted came from actual and potential
(more than 500k saves on a topic) a growing interest from affluent customers, rather than the
and a strong upward trend during Asian millennials in skiing in late brands themselves [18]. Savvy
the final three to six months of 2016. companies will need to increase
2016. their share of the current 0.37%
A further opportunity for the of conversation in the future.
Based on this data, the company luxury industry lies in the fact
made predictions for 2017 that in the past year, Pinterest
trends. A 333% spike in charcoal said 75% of its content came from
face masks in beauty, a +500% businesses. Some 55% of its 100
increase in sew-on patches in million users use the social image
women’s fashion, and a +1450% aggregator to look and shop for
surge in images of cultural products, saving businesses’
events saved as travel images images and eventually clicking
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were all recorded as indicators of through to purchase them. B o t to m , l e f t to r i g h t : Fo re ve r m a r k
millennial appetite in the coming diamonds campaign; fashion editor
year. [17] But to date, luxury houses have a n d I n s t a g ra m i n f l u e n c e r Lu c y
W i l l i a m s a t S o n g S a a Re s o r t ( S o u rc e :
lagged behind when it comes to Lu c y W i l l i a m s a n d Dre a S o b i e s k i ) ;
This can help inform business creating a relationship between m i l l e n n i a l s h a ve a t h i r s t fo r t ra ve l
decisions. Luxury watchmakers themselves and millennials on a n d e x p e r i e n c e s ; c h a rc o a l m a s k s
h a ve b e c o m e p o p u l a r i n t h e b e a u t y
IWC, for example, opened a social media. Engaging with i n d u s t r y ; I W C ’s n e w b o u t i q u e i n s k i
store in ski destination St Moritz social media allows luxury d e s t i n a t i o n St . Mo r i t z i n t h e Up p e r
in December 2016 – a timely brands to learn about their En g a d i n e ( S o u rc e : P P R / I W C ) .
2 0 1 7 Predic tio n s Re po r t 19CASE STUDY
Forevermark, a De Beers Group Company
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Nearly seventy years after The the livelihoods of the people and particularly want to know where
De Beers Group of Companies the land that produced it – a true that product came from, and
coined the tagline “A Diamond lifetime investment. want a lot more assurance that it
Is Forever,” diamonds still has ‘done good’ on its way.”
hold their appeal as a symbol When Forevermark first launched in
of permanence, strength and 2008, the brand was determined Each Forevermark diamond is
beauty. But consumers are asking to set new industry standards in sourced from carefully selected
more questions and have higher responsible sourcing practices mines, and is cut, polished and
standards for their diamond from rough to polished. manufactured in a responsible
purchases than ever before. way by approved partners
Going above and beyond the that can comply with its strict
Forevermark, part of The De Kimberley Process standards, environmental, social and
Beers Group is a brand very each Forevermark diamond financial standards.
much focussed on engaging is inscribed with a unique
with millennials who still crave inscription number guaranteeing At the start of the supply chain,
the romantic symbolism of a its traceability and integrity. Forevermark as part of The
diamond, but want to invest not Stephen Lussier, Forevermark De Beers Group invests in the
only in the diamond itself, but in CEO, says: “Younger consumers environment. For every hectare
20 2 0 1 7 Pre d ictions ReportB e l o w : Fo re ve r m a r k t ra c k s a n d m o n i t o r s e ve r y o n e o f i t s d i a m o n d s
3./ WELCOME TO THE MILLENNIAL WORLD
t h ro u g h o u t i t s j o u r n e y f ro m t h e m o m e n t i t i s u n e a r t h e d . T h i s e n s u re s
t h a t e ve r y d i a m o n d i s c o n f l i c t - f re e , u n t re a t e d a n d c o m p l e t e l y n a t u ra l .
A s a c o m m i t m e n t t o i n t e g r i t y, a u n i q u e i d e n t i f i c a t i o n n u m b e r a l o n g
w i t h t h e Fo re ve r m a r k l o g o i s i n s c r i b e d o n e a c h d i a m o n d , a n d c a n o n l y
b e s e e n t h ro u g h a Fo re ve r m a r k V i e w e r.
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2 0 1 7 Predic tio n s Re po r t 213./ WELCOME TO THE MILLENNIAL WORLD
R i g h t : Fo re v e r m a r k p o s i t i v e l y c o n t r i b u t e s t o
t h e p ro t e c t i o n o f t h e n a t u ra l w o r l d t h ro u g h
t h e Di a m o n d Ro u t e , a s e t o f 1 0 p ro p e r t i e s
s p re a d a c ro s s S o u t h Af r i c a , B o t s w a n a a n d
Na m i b i a . ( S o u rc e : A n n i e G r i f f i t h s)
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Le f t : Fo re ve r m a r k s u p p o r t s b u s i n e s s
i n i t i a t i ve s i n d i a m o n d p ro d u c i n g c o u n t r i e s .
L a u n c h e d i n 2 0 0 9 i n S o u t h Af r i c a , t h e
Z i m e l e Pro g ra m h e l p s p e o p l e t o s t a r t
o r g ro w t h e i r o w n b u s i n e s s e s . S o p h i a
M p h u t h i , a b e n e f i c i a r y o f t h e p ro g ra m m e ,
runs her own driving school.
R i g h t : T h e Di a m o n d Ro u t e i s a b o u t m o re
t h a n c o n s e r v a t i o n a l o n e . It s u p p o r t s l o c a l
c o m m u n i t i e s a n d e c o n o m i c d e ve l o p m e n t
t h ro u g h t o u r i s m a n d e d u c a t i o n . Ed u c a t i o n
a n d h e a l t h c a re a re p r i o r i t i e s fo r a l l l o c a l
c o m m u n i t i e s s u r ro u n d i n g t h e m i n i n g a re a s .
They can access services such as schools
and hospitals.
22 2 0 1 7 Pre d ictions Reportof land used for mining, five
3./ WELCOME TO THE MILLENNIAL WORLD
hectares is set aside for nature
conservation. An example of
this is a game park near a mine
in Botswana, home to over a
thousand animals and a cheetah
conservation field unit.
Support is also given to a series
of enterprise development funds,
which create jobs in industries
such as farming, jewellery,
design, food distribution and
other sectors in countries such
as South Africa and Botswana. In
2014, over a third of the people
who benefited directly from that
funding were women. OPINION:
At the other end of the process,
HELEN BRAND,
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as the final product, responsibly UBS EXECUTIVE
sourced diamonds are growing
in importance to millennial DIRECTOR,
“
celebrities and the stylists that
dress them with red carpet
EUROPEAN
fashion increasingly needing LUXURY GOODS
to reflect positive lifestyle and
luxury values. For example,
Forevermark’s diamonds were
worn to the 2016 Oscars by actress We conduct surveys of entice them in in the first place,
Margot Robbie and models Lily the Chinese and US luxury or whether they want to spend
Donaldson and Martha Hunt. consumer, and when we’ve cut more time on experiences and
the data for millennials vs. non- e.g. posting them on social
millennials, there hasn’t been as media. I think brands probably
much difference as you might need to do a little more work to
perceive between their different target millennials.
consumption patterns.
Within online and digital,
The general theory is that brands need to do more work to
millennials care more about make that a luxury experience
experiences and less about and adapt to how the millennial
luxury consumption. Once consumer is shopping. This area
they’re a luxury consumer is driving much more activity in
however, there doesn’t seem terms of how people research
to be a huge difference in how but also purchase products.
they spend, but in 2017 it is a
question of whether you can
2 0 1 7 Predic tio n s Re po r t 234./ FAST LUXURY
POSITIVE LUXURY
4/
FA S T L U X U R Y
The ‘Buy Now’ Revolution
24 2 0 1 7 Pre d ictions ReportS o u rc e :
POSITIVE LUXURY
2 0 1 7 Predic tio n s Re po r t 25POSITIVE LUXURY
In a world where a luxury coat young luxury consumers hungry launching faster models of
can be ordered on a smartphone for instant access to catwalk communicating and selling
in the morning and couriered by shows, ad campaign stars, and product. But engaging with
bike to a customer’s office in the limited edition product. Brands customers in real-time, whether
afternoon, where information have tapped into the ability of online or in store, seems here to
and communication is exchanged ‘dark social’, that is, non-public stay.
faster than ever via social media social formats like WhatsApp
and messaging apps, timing is of and Facebook Messenger, Luxury houses must also protect
the essence for the luxury market. to create exclusive customer their internal talent in the face
relationships. For example, of a faster and faster production
Production, design and delivery Adidas has used WhatsApp to culture. Raf Simons for Dior
timetables are shifting. One of build private messaging groups and Alber Elbaz for Lanvin are
the biggest game changers of with customers, sharing exclusive among the design chiefs that left
2016 was the ‘see now, buy now’ content and product with key 16- their positions citing the demand
season model introduced by 19 year olds before it reaches the for creating multiple collections
Burberry, which saw the brand brands’ Twitter and Facebook back-to-back as a reason for
change its entire production channels. [19] leaving.
schedule to enable customer to
instantly shop runway shows. As ever, luxury brands must “The wholesale category is
be careful not to erode their transforming, people’s methods
Mobile messaging apps like cache and must develop their of exploring brands have
Snapchat have been embraced presentation, sales formats and changed tremendously since the
by brands wanting to please brand voice carefully before commonality of social media,
26 2 0 1 7 Pre d ictions ReportPOSITIVE LUXURY
and business globally is softening the British fashion house’s bottom A b ov e : To m m y H i l f i g e r ’s S e e - No w
Bu y - No w s h o p p a b l e r u n w a y s h o w
due to the uncertainties the world line when announcing its H2 a t S o u t h s t re e t S e a p o r t N YC i n
is facing. It simply is a daunting 2016 results. She did, however, September 2016 included top models
time,” Rony Zeidan, founder and note the move heightened the a n d a c o l l a b o ra t i o n w i t h s u p e r m o d e l
chief creative officer of fashion company’s “brand reach, be it G i g i Ha d i d . T h e b ra n d s t a g e d a
c a r n i v a l - l i ke s e t u p t h a t a l s o a l l o w e d
advertising and branding firm share of voice [and] magazine g u e s t s t o b u y p i e c e s f ro m n e a r by
RO NY, said in 2016. covers.” [21] Other brands p o p - u p s a f t e r t h e s h o w. W h a t d o
including Ralph Lauren, Tom m ove m e n t s s u c h a s t h e s e s u g g e s t
Of the numerous departures Ford and Tommy Hilfiger have about fashion immediacy in our
c o n s u m e r c u l t u re? ( S o u rc e : O v i d i u
at big-name fashion houses, moved to the model in the past H r u b a r u / Sh u t t e r s t o c k , I n c . )
“Some of the reasons could six months: their financial results
be creative existentialism, and over the coming year may give
O p p o s i te p a ge : M I L A N , I TA LY -
others could be misaligned goals an idea of the financial success of F E B R UA RY 2 5 , 2 0 1 6 : Fa s h i o n a b l e
with management,” he said. “But the production model. woman attending models and vips
needless to say, this malaise that is u s i n g s m a r t p h o n e i n t h e s t re e t s
happening in the industry might d u r i n g M i l a n Fa s h i o n We e k Wo m e n
Fa l l / W i n t e r 2 0 1 6 / 2 0 1 7 ( S o u rc e :
trigger a great transformation. It Eu g e n i o Ma ro n g i u / Sh u t t e r s t o c k .
has yet to be revealed.” [20] c o m)
Post its shift to see now, buy now,
Burberry chief financial officer
Carol Fairweather said the move
did not have a major impact on
2 0 1 7 Predic tio n s Re po r t 27CASE STUDY
Reliance Brands
POSITIVE LUXURY
The burgeoning luxury market Based on customers’ in-store match with customers’ existing
in India was estimated to surpass shopping histories, RBL has used preferences in their own homes,
$18.3 billion in 2016, growing at a Whatsapp to send information all moves it says have boosted
compound annual growth rate of on promotions, flag up new RBL’s business volumes in the
around 25%, according to a study launches and share product luxury segment.
by The Associated Chambers of pictures and videos. RBL assigns
Commerce & Industry of India resources to answer customer
(Assocham). [22] questions via the app, conduct
quick discussions and help clients
Reliance Brands Limited (RBL) decide between purchasing
brings global luxury brands options.
including Ermenegildo Zegna
and Kate Spade to the Indian It has also introduced a home
market. It has been using shopping system for key clients,
Whatsapp as a messaging whereby executives make
platform to build relationships appointments with key clients
with its affluent clients. and bring luxury products that
28 2 0 1 7 Pre d ictions Report4./ FAST LUXURY
POSITIVE LUXURY
A b ov e : Re l i a n c e Bra n d s L i m i t e d ( R B L ) ,
p a r t o f t h e Re l i a n c e I n d u s t r i e s G ro u p ,
b e g a n o p e ra t i o n s i n O c t o b e r 2 0 0 7
with a mandate to launch and build
i n t e r n a t i o n a l a n d d o m e s t i c b ra n d
e q u i t y i n t h e p re m i u m t o l u x u r y
s e g m e n t a c ro s s a p p a re l , fo o t w e a r a n d
l i fe s t y l e b u s i n e s s . Re l i a n c e I n d u s t r i e s
i s ra n ke d # 1 I n d i a n c o m p a n y by p ro f i t
a n d # 2 1 5 b a s e d o n s a l e s re ve n u e i n
Fo r t u n e G l o b a l 5 0 0 ra n k i n g s ( 2 0 1 6 ) .
S o u rc e : Re l i a n c e Bra n d s Lt d . L i n ke d I n
2 0 1 7 Predic tio n s Re po r t 295./ WHO I AM, NOT WHAT I HAVE
5/
POSITIVE LUXURY
WHO I AM,
N O T W H AT I
H AV E
The Quest for Status & the
New Consumer Landscape
30 2 0 1 7 Pre d ictions ReportPOSITIVE LUXURY 2 0 1 7 Predic tio n s Re po r t 31
A desire for conspicuous annual growth rate of 6.4% the desire for discreet luxury
5./ WHO I AM, NOT WHAT I HAVE
consumption, particularly in in the years 2016-2022. [24] through subtle branding and
luxury accessories, has showed This creates opportunity for an invisible to the naked eye
signs of decline. A 2016 report by associated product to serve Forevermark inscription on its
market researchers NPD found these experiences – for travel, diamonds – privately reassuring
81% of millennials said it was athleisure, beachwear and sports the owner of their diamond’s
important to them that the logo apparel. integrity. The inscription can only
on their handbag be subtle. [23] be seen through a special viewer
Luxury businesses must monitor and each inscribed number is
Individuality, instead, is more these evolving attitudes to luxury unique to the owner.
becoming more highly prized, and adapt their product to fit.
and personalisation is an area that Upscale British jewellery line
the luxury sector has historically Start-ups have already emerged Loquet London sells glass
excelled in. Products which offer to meet this need for discreet, lockets set in gold, crystal and
customisable, interchangeable, personal luxury, particularly in diamonds and allows its clients
or personalised options are the accessories and jewellery the ability to fill the lockets with
performing well: Burberry’s The space. Australian handbag brand made-to-order personalised
Rucksack, which offers shoppers Mon Purse offers customers the charms. Luxury board game
the chance to have their initials ability to customise a handbag maker Alexandra Llewellyn
POSITIVE LUXURY
embroidered on the bag, was the from over 6 billion unique design offers backgammon sets which
brand’s biggest bag seller in the combinations and see their can be individually ordered and
last half of 2016. [21] design virtually rendered in real- personalised with initials or
time. messages set with semi-precious
Luxury travel is set to become stones and brass playing pieces.
a $1.2 billion market by 2022, Forevermark, part of The De
with an expected compound Beers Group, has responded to
Le f t to r i g h t : Bu r b e r r y ’s T h e Ru c k s a c k w i t h
e m b ro i d e re d p e r s o n a l i s a t i o n ; A l e x a n d ra
L l e w e l l y n’s b e s p o ke h a n d m a d e b a c k g a m m o n b o a rd
c o m m i s s i o n e d b y c h e f a n d re s t a u ra n t e u r Ma r k
H i x , s h o w i n g h i s f a vo u r i t e fo o d s a n d h i s Br i t i s h
re s t a u ra n t s .
32 2 0 1 7 Pre d ictions ReportCASE STUDY
Executive pay and big business
POSITIVE LUXURY
Luxury retailers, particularly in plans to make firms disclose commission and performance-
Europe, may have to be mindful the pay gap between chief based executive compensation as
of consumer perceptions towards executives and average workers. a deduction.
wealth in the coming months. If consumers continue to
Early 2017 saw a flare-up in UK feel squeezed financially and Also in January, bonus and
media coverage of corporate marginalised by big business, this pension packages for top
boardroom practices and may be reflected in anti-corporate executives at Volkswagen and
executive pay. Branded ‘Fat Cat sentiment and changing attitudes Deutsche Bank were strongly
Wednesday’, 4 January 2017 was towards wealth and spending. criticised in Germany, leading
the day executives’ pay for the to calls for legislation to create
year surpassed the average UK In the United States, January limits on boardroom pay. [26]
salary of £28,200, according to saw the proposal of the Stop
the High Pay Centre think tank. Subsidizing Multimillion Dollar
[25] Corporate Bonuses Act, which
aims to close a loophole in tax law
The UK government is considering that allows corporations to claim
2 0 1 7 Predic tio n s Re po r t 33CASE STUDY
5./ WHO I AM, NOT WHAT I HAVE
Millennials in China
POSITIVE LUXURY
Diamonds are one area of and 40% said financial It predicts self-purchases to rise,
the luxury market that has independence was more especially among women, and
experienced growth, particularly important than marriage. [27] demand for lower entry-point
in India and China. Chinese diamonds to increase as well.
millennials are spending more Globally, The De Beers Group
on diamond jewellery than any said in its most recent 2016
previous generation. They are market assessment that consumer
increasingly buying diamonds preferences can be expected to
for themselves, rather than change, with an increased focus
as part of a couple, reflecting on self-expression; as a result,
changing relationship values in design and branded jewellery
the country. will continue to increase in
relevance. Consumers will grow
In a study, 32% of Chinese in knowledge and will push for
millennials said they identified ethical products with assured
success as financial independence, provenance.
34 2 0 1 7 Pre d ictions ReportOPINION : TIM JACKSON,
LECTURER, BRITISH SCHOOL OF
POSITIVE LUXURY
“
FA S H I O N
for millennials, beauty as self-expression
“Notions of genderless beauty Now even beauty giant L’Oreal’s as clothing, and models are
are entering the mainstream, mission statement reads that styled on catwalks in such a way
as younger generations focus its goal is ‘reaching out to that gender is bypassed. Model
on individuality rather than extremely diverse populations Cajsa Wessberg’s shaved head
binary girl/boy dynamics. with a vision of universalising challenges traditional ideas of
Once marginalised LGBT and beauty’. femininity, whilst Andrej Pejic
transgender groups have found and emerging Central Saint
their voice and influence, and Blurring of gender identities Martin’s M.A. graduate Matty
freedom and the spirit of the is not new, especially in pop Bovan do the equivalent for
individual is a strong trend culture - think of David Bowie - masculinity and perceptions of
reflected across fashion and and androgynous fashion, such male beauty.”
”
beauty. as Calvin Klein’s designs, has
long existed. But the trend has
MAC Cosmetics pioneered this more traction now, and a much
two decades ago with ad broader audience. U.S. designer
campaigns featuring RuPaul and Shayne Oliver’s Hood By Air label
k.d lang, but have more recently tries not to present distinctive
partnered with Caitlyn Jenner. men’s and women’s collections
2 0 1 7 Predic tio n s Re po r t 356./ A NATION OF ROBOTS
6/
POSITIVE LUXURY
A N AT I O N
OF ROBOTS
Artificial Intelligence
and its Impact on
Economic Growth
36 2 0 1 7 Pre d ictions ReportPOSITIVE LUXURY 2 0 1 7 Predic tio n s Re po r t 37
Luxury retailers have traditionally As with other sectors, the luxury Jackson notes.
offered high levels of human industry will have to work hard to
6./ A NATION OF ROBOTS
service and interaction with build trust with consumers and Some retailers are abandoning
customers, to offer bespoke ensure that any transition from a notes and coins completely. In the
service and information. typically human process to a bot- UK, supermarket chain Waitrose
led experience is a seamless one. and healthy food chain Tossed
The use of AI in retail customer opened stores in 2016 which are
service is still not widely Payment methods are evolving entirely cashless.
adopted, but the digital assistant too. Contactless credit or
and chatbot industry is a market debit cards now have a high Card payment providers Visa
expected to generate $600 acceptance among shoppers. and MasterCard have agreed that
billion in revenues by 2020, with The UK is the leading user of all retailers will have to provide
implications for both customer- contactless payments in Europe, contactless to be able to take card
facing and backroom operations. along with Spain and Poland, payments by 2020.
[28] according to market research
firm Euromonitor. The UK Shoppers are also being
Customer Relationship Management Cards Association reported there encouraged to adopt wearable
(CRM) systems took a leap were 159.1 million contactless payment technologies. British
forward in 2016, with businesses transactions in February 2016, company Kerv offers a wearable
Salesforce, Oracle and Base the equivalent to about 63 a contactless-enabled ring. Bank
POSITIVE LUXURY
launching new CRM tools second. [29] Barclays already sells contactless
underpinned by AI technology. wristbands, a key fob and a
This technology is usually The British School of Fashion’s sticker – that can be affixed to
reserved for backroom sales Tim Jackson says that “growth whatever the customer wants –
processes, but the concurrent in online shopping will drive which enable payment from the
increase in digital assistants innovation in payment methods customer’s debit or credit cards.
and chatbots to interact with and so have implications for the [29]
both potential and established notion of money and how it is
customers raises questions about perceived; for example, digital
the future roles of humans within money versus cash.” Contactless
retail. payments in various forms are
reducing the need for cash, with
AI can intelligently collate, speculation that countries such
store and interpret existing as Sweden are moving towards
information and data, streamline cashless societies.
processes and cut time. The use
of AI on shop floors to provide “In-world immersive lifestyle
store and product information, communities such as Second Life
for example, means salespeople have long since had their own
can devote more time to currencies, Linden dollars in the
individual customers. Online, case of Second Life. Bitcoin is
bots can be used in customer perceived by some to represent
service to handle initial enquiries a possible future of money,
and simple requests, freeing up and social commerce platforms
time for human customer service like WeChat now use digital
staff to handle more complex gimmicks such as WeChat’s
customer queries. Red Packets to drive spending,”
38 2 0 1 7 Pre d ictions ReportROBOTS IN RETAIL 6./ A NATION OF ROBOTS
POSITIVE LUXURY
A b ov e ( to p to b o t to m) : 1/ CUSTOMER
We C h a t ’s Re d Pa c ke t s g i m m i c k
R E L AT I O N S H I P
taps into the symbolism of
t h i s c u l t u ra l t ra d i t i o n , a n d MANAGEMENT
e n c o u ra g e s d i g i t a l p a y m e n t SYSTEMS
h a b i t s t o d r i ve s p e n d i n g ;
Ke r v ’s w e a ra b l e c o n t a c t l e s s - 2 / PAY M E N T
enabled ring.
METHODS
2 0 1 7 Predic tio n s Re po r t 39CASE STUDY
6./ A NATION OF ROBOTS
Sephora Chat
French beauty chain Sephora
has started to communicate with
its customers using chatbots on
social messaging apps. Ontario-
based Kik has an estimated 300
million users and its founders
claim 40% of U.S. teenagers use
the app. Kik users instigating
a conversation with Sephora
on the app are invited to give
information about their beauty
preferences, and in the ensuing
POSITIVE LUXURY
conversation are offered tailored
product reviews, beauty tutorials
and tips linked to the Sephora
mobile shopping site. [30]
‘Conversational commerce’, A b ov e : S e p h o ra’s c o m m u n i c a t i o n w i t h c u s t o m e r s o n t h e s o c i a l m e s s a g i n g
as taxi app Uber’s developer app Kik.
experience lead Chris Messina
dubbed it in 2016, is likely to
increase as teen millennials who
spend more time on messaging
apps become consumers and
improvements to the technology,
allowing for more natural,
personalised interactions, are
made. Apps like WeChat,
WhatsApp, Kik and Facebook
Messenger are set to become
increasingly important to brands
looking to tap into younger
markets – but the conversion rate
from in-app communication to
sales is yet to be seen.
40 2 0 1 7 Pre d ictions ReportCASE STUDY
6./ A NATION OF ROBOTS
Robots and GDP
The World Economic Forum no historical precedent,” WEF GDP growth and moving
(WEF) says we stand on the brink founder Klaus Schwab said in manufacturing away to more
of a ‘fourth industrial revolution’. 2016. developed, technology-driven
The first, in 1784, was steam nations. Harvard economist
driven. The second, in 1870, was Automation and AI defines Dani Rodrik’s research suggests
marked by division of labour, this revolution, and opinions automation has been cutting the
electricity and mass production. vary as to the implications for need for more low-skilled jobs
Electronics and IT ushered in a the economy and spending. than medium or high-skilled
third revolution in the 1970s, and One theory, as economists ones, increasing inequality. [32]
we now, it says, are experiencing Erik Brynjolfsson and Andrew
a fourth wave characterised by McAfee have noted, is that An opposing theory is that
POSITIVE LUXURY
“a fusion of technologies that is the shift to a more automated the replacement of workers by
blurring the lines between the world could create higher levels technology for menial tasks will,
physical, digital, and biological of inequality. This would be in the long term, result in happier
spheres.” [31] primarily led by its potential to staff who are engaged in more
disrupt labour markets. productive and concept-driven
This industrial revolution is work, which may pay dividends
driven by billions of people As automation practices and by diverting human talent away
connected by mobile devices, robots replace human workers from repetitive, simple tasks
with unprecedented processing across the entire economy, the towards ones which can create
power, storage capacity, and net displacement of workers value. As the World Economic
access to information. This is by machines might widen Forum points out, “the largest
coupled with rapid growth in the gap between returns to beneficiaries of innovation tend
artificial intelligence, robotics, capital and returns to labour. to be the providers of intellectual
autonomous vehicles, 3D Andrew Norton, director of and physical capital.”
printing, nanotechnology, the International Institute for
biotechnology, materials science, Environment and Development,
energy storage, and quantum argues that low-income countries
computing. have historically achieved
economic growth through
“There are three reasons why industrialisation. [32]
today’s transformations represent
not merely a prolongation of the Automation could mean workers
third industrial revolution but who previously earnt wages
rather the arrival of a fourth and created spending power
and distinct one: velocity, scope, through a growing demand for
and systems impact. The speed labour are replaced by robots and
of current breakthroughs has automated systems, hindering
2 0 1 7 Predic tio n s Re po r t 41CASE STUDY
A New Marker of Wealth:
UN Sustainable Development Goals
POSITIVE LUXURY
The UN’s Sustainable Development account factors including energy now being developed. This will
Goals (SDG) take a different consumption, education levels, lead to evidence-based policy
approach to the traditional use health innovation and quality of backed up by existing data, and
of GDP as a measure of a nation’s infrastructure. help nations benchmark and
wealth. Launched in 2015, the track their progress against the
goals were ratified and adopted The goals are particularly goals. Localised SDG networks
by all member states of the UN pertinent to the luxury industry. and associations, under the
General Assembly in 2015 and The fashion sector is a major overarching UN Sustainable
backed by global figureheads employer of people in the Development Solutions Network,
such as Pope Francis and Bill and developing world and its supply have been formed to foster
Melinda Gates. chain is deeply impacted by the development of the actual
many of the goals – from the goal metrics and provide education
Spanning 17 measures of a of eradicating poverty through and training.
progressive, healthy society, appropriate pay, to gender
the goals are designed to offer a equality in the workplace, with The goals were rebranded as
broader view of whether a nation women making up 80% of global Global Goals in 2016, and have
is thriving or not. While GDP garment workers. seen strong recognition and
measures the monetary value uptake in the fashion sector and
of goods and services produced With the goals and targets in place, on social media.
by a nation, the SDGs take into policy tools and frameworks are
42 2 0 1 7 Pre d ictions Report6./ A NATION OF ROBOTS
POSITIVE LUXURY
A b ov e : T h e U N Su s t a i n a b l e D e ve l o p m e n t G o a l s , re b ra n d e d O p p o s i te Pa ge Le f t : N E W YO R K , U S A - S e p 2 7 , 2 0 1 5 :
as Global Goals in 2016. Pre s i d e n t o f Uk ra i n e Po ro s h e n ko Pe t ro d e l i v e r s h i s
s p e e c h a t t h e U N Su s t a i n a b l e D e ve l o p m e n t Su m m i t i n
B o t to m Le f t : G i l l i a n A n d e r s o n , a Po s i t i ve Lu x u r y f r i e n d a n d Ne w Yo r k . ( S o u rc e : Dro p o f L i g h t / Sh u t t e r s t o c k I n c . )
a c t re s s i n t h e f i l m S o l d , w a s o n t h e Un i t e d Na t i o n s O f f i c e
o f Dr u g a n d C r i m e ( U N O D C ) p a n e l , “ T h e Ro l e o f t h e A r t s
i n He l p i n g t o En d H u m a n Tra f f i c k i n g ” i n Ma rc h t h i s ye a r.
B o t to m R i g h t : N E W YO R K C I T Y - A P R I L 2 1 2 0 1 6 : Ac t o r
& U N e n v oy Fo r re s t W h i t t a ke r a p p e a re d b e fo re a
s p e c i a l p l e n a r y s e g m e n t o f t h e U N G e n e ra l A s s e m b l y t o
d i s c u s s Su s t a i n a b l e D e ve l o p m e n t G o a l s . ( S o u rc e : A . K a t z /
Sh u t t e r s t o c k I n c . )
2 0 1 7 Predic tio n s Re po r t 436./ A NATION OF ROBOTS
T h i s p a ge : M i l e s a w a y f ro m t h e d i g i t a l
inundation of urban cities lies the
b e a u t i f i l l y t ra n q u i l S o n e v a Ja n i re s o r t ,
p a r t o f t h e S o n e v a d e s t i n a t i o n c o l l e c t i ve .
L a s t ye a r, S o n e v a re l e a s e d a To t a l
I m p a c t A s s e s s m e n t ( T I A ) fo r 2 0 1 5 - 2 0 1 6
t h a t a l l o w s t h e m t o t a ke a “ p l a n e t a r y
boundaries” view of all their social and
POSITIVE LUXURY
e n v i ro n m e n t a l i m p a c t s . To u r i s m i s o n e
o f t h e f a s t e s t g ro w i n g i n d u s t r i e s , a n d
sustainable tourism has been highlighted
i n Su s t a i n a b l e D e ve l o p m e n t G o a l t a rg e t
1 2 . b a n d 1 4 . 7 . Tra c k i n g e n v i ro n m e n t a l
fo o t p r i n t d a t a w i t h n e w t e c h n o l o g i e s w i l l
b e a n i n c re a s i n g l y p o p u l a r m e t h o d fo r
t r a n s p a re n c y, a n d t o m a ke fo r “c o n v i n c i n g
c o n ve r s a t i o n” w i t h c o n s c i o u s c o n s u m e r s .
44 2 0 1 7 Pre d ictions Report“People are starting to realise that every dollar
6./ A NATION OF ROBOTS
they spend is a vote: a public demonstration of
their values.”
Paul Dillinger
Head of Global Innovation, Levi Strauss & Co.
O P I N I O N : S U S TA I N A B I L I T Y
“
PREDICTIONS
POSITIVE LUXURY
Angela Ahrendts, senior vice terminology, ignoring the words People are starting to realise
president of retail at Apple and that have meaning. that every dollar they spend is a
former CEO of Burberry, said, vote: a public demonstration of
“I grew up in a physical world, Prepare yourself to know all their values.
and I speak English. The next about collective bargaining,
generation is growing up in a unauthorized subcontracting, Each purchase we make can
digital world, and they speak non-compliance and industrial be a small vote for sustainable
social. relations. industry, or for irresponsible
excess. It can be a vote for
“Today, when you ask CEOs and This is no time for a glosswash — renewable energy policy, or
CMOs what is their long-term transparency demands that we for sustained reliance on fossil
planning horizon, they will tell get to know the problem before fuels.
you that it is between 18 and we can resolve it. The language
24 months.” [33] of sustainability may be grittier Products,likepoliticians,represent
than what is normally used in a set [of] values. I predict
Campaigner and co-founder fashion talk, but it makes for a that conscious consumers will
of Fashion Revolution Orsola more convincing conversation.” become more mindful of these
de Castro predicts the considerations and will expect
conversation around fashion Paul Dillinger, head of global more transparency from the
and sustainability will become innovation at Levi Strauss & companies who are “asking for
more concrete in 2017. “For Co, predicts 2017 will usher their vote.” [33]
”
years we’ve been skirting the in more politically-motivated
true issues trying to make consumption. “Voting doesn’t
sustainability sound sexy, just happen every two years in
forgetting to explore the real November.
2 0 1 7 Predic tio n s Re po r t 457./ CONCLUSIONS
7/
POSITIVE LUXURY
CONCLUSIONS
46 2 0 1 7 Pre d ictions ReportIn a difficult economic climate, The business winners of the future The changes they conceived
7./ CONCLUSIONS
luxury retailers must ensure will be the ones who actively try and made changed the fabric
they invest wisely in their people to earn and retain their staff and of society. Such efforts were
and practices in 2017 – keeping customers’ trust and respect, not driven by a desire to change and
business stable after a turbulent those chasing profit at any cost. improve, often in times of great
2016 and setting the course for political and social turbulence.
a strong performance in 2018. There is nothing new in successful Far from being a marketing
Transparency was the watchword businesses taking the lead in device, behaving with purpose
of 2016: purpose is what will solving a pressing societal need. was an active choice made by
drive growth in 2017. founders and board members to
Pollsters, global media and Acting with make better workplaces, and by
extension, better societies.
betting markets failed to predict
the outcome of some of 2016’s
purpose has Today purpose remains as
biggest political events – from
Brexit to Trump. It has become
served as the important to businesses as ever.
We have found it profoundly
increasingly clear that we
are living and working in an
engine for the affects company bottom lines:
a strong sense of purpose
environment where it is almost development empowers organisations to
POSITIVE LUXURY
impossible to rely on or anticipate unify their staff and focus on a
global government stability and and growth of common goal.
many of the
clear leadership: individuals,
and the businesses they work The luxury market has a unique
for, can only control their own
actions. As governments are world’s most opportunity. Often working
with rare, natural resources
failing to address citizens’ needs,
companies are filling the role of
recognisable and local communities, this is
a responsibility and a privilege
solving some of the most global
pressing issues.
brands for which if handled with care and
thought, can lead to productive,
There has been talk of the
centuries. profitable, positive outcomes for
companies, staff and customers,
development of a corporatocracy By changing and improving and ultimately society at large.
in recent years. This refers to an the way business was done,
economic and political system such companies revolutionised By taking control and
controlled by corporations or the fortunes not only of their responsibility for making a
corporate interests, with negative company but of the lives of their corporate policy, a product or a
connotations of chasing wealth staff and customers too. This service better suited to today’s
at any cost. But business can be was done through philanthropy, needs, this can start to trickle
– should be – a positive, active through creating a product down and have a positive impact
agent of change in the world. that was indispensable, or across a business’ entire supply
democratising a service. Today, chain and beyond.
Positive Luxury found 83% of names historically associated
millennials it surveyed agreed with these actions – such as Forevermark, as part of The De
with the statement “there is too Cadbury, Burberry, Boots – Beers Group, run hospitals in
much power concentrated in the represent powerful, profitable, partnership with the Botswana
hands of a few big companies”. influential multinational brands. Ministry of Health, which are
2 0 1 7 Predic tio n s Re po r t 47You can also read
