There are thousands of ways in which tech is having a significant impact on the luxury industry and on its consumers.
As we mine this territory on Dandelion Chandelier, I’m going to organize our conversations around four significant ways in which the tech world has already changed the luxury business, and how it is likely to continue to do so.
First, technology has yielded several new luxury products. They’re not all just gadgets for technophiles. You can categorize them into four primary areas:
(1) “Smart” upgrades to existing product categories, like the self-driving Rolls-Royce, or the Bluesmart smart suitcase that allows you to charge your smartphone and has a GPS
(2) Sharing economy luxury products and services like JetSmarter, the Uber for private jet travel, or Rent-the-Runway, a sharing service for designer apparel and accessories
(3) Sui generis luxury products, like the Oculus RIF virtual reality (VR) headset, or the Martin jet pack (this one’s on my personal wish list – how cool would commuting be with that?)
(4) Products that result from successful partnerships between tech and luxury companies, like Burberry’s Bowers & Wilkens “gold edition” Bluetooth speakers (a mere $995 each)
Second, tech has transformed the way brands promote their goods and services. Social media, ad targeting, and augmented reality are all powerful tools for luxury brands to build awareness, consideration and conversion. Just look at how Kanye West leveraged social media to create a frenzy at the launch of his new album and fashion line during New York Fashion Week this spring.
Third, tech is itself a growing channel of distribution for luxury products. Luxury consumers can browse and buy products and services in exponentially more places than ever before, at home or on their smartphones. Right now less than 10% of luxury goods are bought that way, but it’s projected to be 20% within only a few years. And here’s an interesting conundrum: luxury consumers LOVE Amazon, but Amazon hasn’t yet found a way to successfully sell luxury goods in its marketplace. We here at Dandelion Chandelier have some ideas to suggest.
Finally, tech is an enabler of ultra-personalized service, which is mission-critical for luxury brands. Whether it’s pre- or post-sales service, the ability to surprise and delight consumers is vastly improved by recent tech innovations. Drones delivering apple martinis to your lounge chair at the chic roof-top bar of your favorite luxury hotel? Oh, yes.
It’s a new world for luxury brands, tech firms, marketers and luxury consumers. In your view, what’s the biggest impact that tech has had on luxury in the past couple of years? And what does the luxury world have to teach the tech world?