It may not be widely recognized as such just yet, but digital technology is probably one of the best things to happen to luxury brands in a long time.
Digital is happening fast and forcefully, whether brands are ready for it or not. It enables new products and services. It opens up opportunities to create personalized offers and provide bespoke services to many more customers. Its distribution channels widen the playing field for luxury brands, allowing them to reach consumers not reached before and to engage with customers online in markets where a brand has no stores. In the US alone, consumers anticipate spending 20% to 35% of their total outlays online in the next few years, according to research by The Boston Consulting Group. (See The Reciprocity Principle: How Millennials Are Changing the Face of Marketing Forever, BCG Focus, January 2014.)
But not all brands are there yet. In fact, luxury lags other consumer sectors when it comes to understanding and applying digital technologies. Disney, Nike, Nordstrom—these are just a handful of the household names that have mastered digital. For more than a few luxury brands, then, the issue really is do or die: the speed of technology development is endangering their current business models faster than you can say “celebrity-chef-catered safari.”