Luxury beyond 2020- five priorities for decision-makers

 The study was carried out in France and Italy last July, with the CEOs of 300 leading luxury companies, generating a combined revenue of €25 billion. It highlighted the major structural changes that are expected to shape the industry, besides a series of issues already widely acknowledged, such as the acceleration of the sector’s shift to digital, new distribution models and the interaction with consumers. A transformation that is occurring in 2021, and whose results will begin to be seen in 2022, while the market as a whole is not expected to recover before 2023. The study’s main findings concern the relationship between suppliers and labels. A relationship that will change to a notable degree, resulting in greater integration and a genuine interaction between consumer brands and their supply chain, while also affecting the creative and product development process, production planning and merchandise delivery. Suppliers will play an essential role in terms of know-how, service and sustainability. It will be up to them to be proactive and offer new solutions to labels, as the latter often do not have enough know-how, according to the study’s author Luca Bettale, a senior partner at Long Term Partners.

During the study’s video conference presentation on February 4, Bettale said that “the Covid-19 shock meant market players realised the incredible fragility of the fashion industry, and the costs inherent in its rigidity, which turned out to be much greater than the economies obtained by eschewing a more flexible system.” Flexibility is set to become the crucial element in the future business model of the luxury industry, whose seasonal specificity is destined to wane. Economic activity will no longer be dictated by the seasons, and seasonality and the traditional collection rhythm will no longer be the only yardstick.How are collections going to be developed in future? Many labels have already started to reduce the size of their range, introducing up to 30% fewer items. But the study showed there is a willingness to push further, to simplify collections even more, relying increasingly on consumer data analysis. The collections’ seasonal structure will be streamlined and compensated by monthly novelty launches, to freshen up the product range.It is also a matter of marketing communications. New products are essential to stimulate social media engagement, even if they are not necessarily the products labels would want to sell in terms of their main collection. To do so, labels need to reorganise and equip themselves with new tools, besides consumer metrics. “Managers are busy developing solutions to optimise product life-cycle management,” said Bettale.

 As a result, sourcing practices must become more flexible, with solutions developed in partnership with suppliers. The most powerful luxury groups have grasped this, as shown by the spate of suppliers’ acquisitions carried out by leading labels, to ensure greater control of their supply chainคำพูดจาก ทดลองใช้ สูตรสล็อต. When this isn’t possible, luxury companies will need to establish a real dialogue and a close relationship with their sourcing partners. Rethinking the collection structure will also have repercussions on the creative process, which will become an ongoing, year-round activity, as will prototyping. The same goes for manufacturing, which will have to respond with smaller production runs at short notice, the output nevertheless still aligned with seasonal colours and fabrics. Hence a need to improve logistics, in terms of sourcing and physical product flow.“The timing, rhythm and volumes will all change. As will the way [luxury labels] work. They will have to set up a flexible sourcing system. It will be much costlier, but deploying this kind of system is an essential evolutionคำพูดจาก ทดลองใช้ สูตรสล็อต. [Labels] will need to plan and engineer their flexibility, and do so more cheaply, in synergy with their suppliers, structuring themselves to offset inventory risk,” said Bettale. Additionally, there is the issue of sustainable development. “Nowadays, consumers demand concrete action, and companies must engage more seriously with this theme, one that until now has mostly been the preserve of advertising and marketing departments. Again, it is clear that change will only happen in partnership with suppliers. Only by joining forces will both [labels and suppliers] manage to address this issue, and they will need a strong conceptual underpinning to achieve this,” concluded Bettale.

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