By Marco Passoni
The new year is here and this is the perfect opportunity to look properly at our business and ask both what we want to achieve for the year ahead, and what we can do better. The years since the pandemic have been ones of impressive growth, but that is from a low base level and is not guaranteed to continue.
To ensure we are building the best possible future for ourselves, and our customers, we must always ask not how we can get back what we had, but how we can create the best possible newness.
So, with that in mind, here are five key questions I am asking as we begin 2024.
Where does luxury’s next growth come from?
Post-pandemic recovery, the return of physical stores and the reopening of China have all been drivers of growth for luxury in recent years. But these are not inexhaustible and new opportunities are always developing. For us to stay ahead of the business, it is key that these opportunities are identified early: Developing markets and the continued growth in the Middle East are great opportunities, while new trends will certainly develop. At the centre of all of this is the importance of luxury retaining its focus on delivering the premium and personal experience which only it can.
How does luxury deliver bespoke experiences in every location?
We have seen reassuring signs in 2023 that luxury is beginning to embrace the great potential in new markets such as India and Vietnam around the world. A truly special experience is at the heart of the luxury offer, but as we all know that means creating something tailored to each customer. This is particularly key in developing markets where local brands also have a strong foothold, and shoppers have their own cultural expectations and demands. We have seen examples of the challenges of this, particularly in China in recent years. Working with local partners has brought some success, but brands must be able to find the spaces and approaches which allow them to keep their brand experience true, but also ensure it speaks to local shoppers in these growth regions.
Will travel retail try something new?
Talk of the need for an overhaul in the travel retail business model is getting repetitive – it has been on ‘New Year’s Resolutions’ lists for ages and there is still more talk than action on a large-scale overhaul, as new contracts are still being written using the old methods. However, for this year, I believe we need to look hard at giving brands greater opportunities to engage their shoppers directly in the market. No one can create an incredible experience for shoppers like brands can and the benefits of allowing them to do so are evident around the world, from Rome to Changi.
Are we willing to make sustainability more than marketing?
I have complained before that too much of the sustainability work done in the industry today is lip service and greenwashing. Brands calling themselves sustainability leaders because they use some recycled plastic in their packaging is laughable, especially when we have leaders such as Patagonia becoming non-profit trusts to help the environment. I sincerely hope this is the year when all stakeholders begin to take real action. The time for talking is past.
What is next from digital?
Stunning online collaborations from brands such as Balenciaga or Ralph Lauren on platforms from Fortnite to Roblox have showcased the potential of the digital market as a hub of innovation and the growing power of AI is making it more potent every day. Now is the time to press on and see real innovation in this sphere. Many brands are still playing it safe and testing the water – and the same is true for retailers. Now is the moment for bold steps, as soon the meek will be left behind.
Those are my thoughts as we look to the year ahead, but I would be interested to hear yours. What is on your mind as you look to 2024?
In the meantime, I want to wish you all a very happy new year.