The opening session of arab luxury world 2015 explored the measures that brands should adopt to prosper in an unstable economic climate, especially with Russian and Chinese tourists pulling back from markets like the Middle East and Europe.
A new segment of consumers needs to be targeted and luxury brands around the world need to shift their strategies to cater to them. As a result, data and technology become more vital than ever for these brands.
David Friedman, president of Wealth-X and one of the panellists of the session, points to an alternative group of wealthy customers – the global citizens. These people are UHNWI investing in real estate around the world, thus “buying” different passports in the process.
“The Chinese do it for status, the Russians for security and in the Middle East, it is more for access issues, they want to travel without any visa restriction,” he said. “Those people live in one place but shop around the world. They spend a lot with certain brands and expect the same treatment in all of the brand’s outlets worldwide.”
Brands have to know their customers to be able to retain them, Friedman stressed, making access to data a top priority. “Knowing about their net worth is a good thing but knowing their liquidity is more important,” he said, cautioning, however, that they must learn these details while maintaining the clients’ privacy.
Isabelle Harvie-Watt, CEO and country manager for Italy at Havas Media Group, was also on the panel. Adding to Friedman’s observations regarding the new target audience, she discussed a new type of brands in the market.
“There is a new breed of young luxury brands and luxury experiences and they are changing the luxury landscape,” she said, going on to emphasise the importance of data and technology for luxury brands.
“Brands are starting to collaborate with their tech teams at the production stage, while working on new products,” she explains. “It used to take 30 years to create a luxury brand; now it only take 18 months.”
Brands should know their domestic clientele better and should focus less on the Russian and Chinese tourists, the session concludes. Technology and data are key to the future of luxury brands, but the storytelling aspect – whether it is in-store or online – is still of utmost importance, as 70 per cent of luxury consumers check the brands’ websites before purchasing in-store.