NEW TECHNOLOGY AND LUXURY - DO THEY MAKE A GOOD COUPLE?
IORMA private roundtable held on 1 March 2016
Anti-counterfeit devices in product packaging, digital signage informed by real time data, battles over who owns wearable technology and which characteristics appeal to different kinds of affluent consumer. These were some of the topics raised at Somo’s Innovation Lab in Victoria, London SW1, which focused on the impact of new technology in predicting and meeting the needs of the different types of customer for luxury products and services.
Three facilitators, Carl Uminski, co-founder and COO at Somo, Pandora Mather-Lees, Luxury Director of IORMA and Caroline Ianniello, Project Director at Moët Hennessy led the discussion with the examples from current practice that intrigue them most.
Experts from Barclays, Mastercard, Jaeger, Circus Digital Communications, Pythian Technologies, SAP, Powa Technologies and UKTI debated, under the Chatham House rule, how to maximise value for top spending customers.
Competition to offer ‘money can’t buy’ experiences, personalised platforms and truly special products, when so many businesses are seeking to enter the luxury market, will continue to stimulate new thinking and practice. Guests agreed that as technology is generating better experience for mainstream consumers, it is getting harder to provide the special, exclusive extras that the most discerning demand.
Digital is now seen as a valuable way to promote brands that once preferred glossy magazines as their conduit to the imagination of the affluent. But awareness and interest are not enough. Top spending consumers have always sought excellence in service, and many top brands want to use technology to recreate the degree of personal attention that their customer aim in store. And they want to use it to customise products to the desires of the individual – so there is no place for an impersonal approach. Burberry continues to lead in taking the special experience of visiting a flagship store and making that experience consistently available. Direct touchpoints are important, and must be maintained to prevent the experience being diluted: bloggers and brand ambassadors are helpful only if quality control is strictly applied.
Customer expectations are changing subtly. Traditionally, there has been the view that one should expect to wait for a luxury product to be created or delivered, to reinforce the value of something difficult to attain. But top spending customers increasingly want immediate gratification for their spending, with same day or next day delivery. Again – as everyone now wants this, how can rapid delivery be made special for the individuals you value most?
Guests also raised the need to adjust to unexpected developments in the preferences of the younger generation of customers for luxury products. The need for ownership that motivated their forebears so strongly, seems to be falling away. Rather than owning a car, a yacht, an aircraft they prefer to buy the ability to use it, without the encumbrances of investment, maintenance, erosion of one’s leisure time. This trend is resulting in partition luxury, whereby one owns a share of the product or simply hires it. What it tells us about human motivation is revealing, and stimulates new thinking about people’s underlying needs. In which other product areas would affluent spenders prefer to be seen by their peers to be using and enjoying, rather than tying up money in things of mainly inheritable value?
The human factors continue to be important in all business and, allied with creative technology, are recognised by the best brands as something they have to use to best advantage.
Co-Founder and COO