IORMA LUXURY CENTRE UPDATE: THE FASHION INDUSTRY IN 2024
Edited by: Pandora Mather-Lees, Luxury Director, IORMA
Research: Aleksandra Basova, IORMA Researcher
September 2024
In this comprehensive exploration of the luxury fashion sector, we delve into the intersection of technology, consumer behaviour, and innovation. Representing IORMA’s Luxury Centre, we take a look at the evolving landscape of luxury fashion, identifying key trends that are shaping the industry’s future. From digital transformations to sustainability initiatives, this article uncovers the strategies and innovations that will define the luxury fashion sector in the coming years.
EXECUTIVE SUMMARY:
Defining Luxury in the Digital Age
Setting the context of luxury fashion today
The luxury fashion industry today is navigating a landscape shaped by several key trends and challenges. Despite economic uncertainties and geopolitical tensions, the luxury sector is showing resilience and a capacity for reinvention. This is reflected in a forecasted growth rate of 2% to 4% for 2024, driven by strong demand in regions like Europe and the United States, and bolstered by the luxury resale market’s expansion (McKinsey & Company) (Cegid Global) .
Digital transformation continues to play a crucial role in the evolution of luxury brands. Many high-end fashion houses are embracing advanced technologies such as virtual reality, AI-driven customer service, and live-stream shopping to enhance customer engagement and create immersive shopping experiences. For example, Louis Vuitton and Chanel have developed sophisticated online services and virtual fitting rooms to meet the evolving expectations of their clientele (McKinsey & Company) (Cegid Global) .
Moreover, luxury brands are increasingly focusing on direct-to-consumer relationships, moving away from traditional wholesale partnerships. This shift is aimed at fostering deeper customer loyalty and providing more personalised shopping experiences. Brands like Stella McCartney and Marc Jacobs are also leveraging their retail spaces as community hubs, hosting local businesses and creative events to build stronger connections with their customers (McKinsey & Company) (Cegid Global) .
Collaborations and strategic partnerships are another significant trend. By working with emerging designers and external creatives, luxury brands can stay culturally relevant and expand their creative horizons. Examples include Gucci’s spotlight on emerging brands at GucciFest and Saint Laurent’s collaborations with various lifestyle brands (McKinsey & Company) (Cegid Global) .
Sustainability and corporate social responsibility are also increasingly important. Many luxury brands are adopting sustainable practices and embracing the second-hand market to appeal to environmentally conscious consumers. Blockchain technology is being used to enhance product traceability and authenticity, which supports more responsible sourcing and production practices. (Cegid Global).
All in all, the luxury fashion industry is adapting to a complex and changing environment by leveraging technology, fostering direct customer relationships, engaging in creative collaborations, and committing to sustainability. These strategies are helping luxury brands maintain their relevance and appeal in today’s market.