Executive summary PPage 3age 3 e summary utiv ec Ex The competitive landscape is changing. To keep pace, luxury brands must: In retail stores, which offer the opportunity to physically interact with consumers, • Increase the digital effort — Luxury companies are behind in an increasingly digital companies must aim to offer dedicated services by employing knowledgeable and world. New technology has changed the way companies do business, providing new highlq imalified shop assistants oho can pronide an exceptional consmmer experience. communication channels, with buying behaviors evolving and the emergence of a new Lhis goes beqond neo openings3 companies shomld focms on improning the imalitq segment, the “millennials.” Immediacy is key, so there is a constant need to innovate offered in their existing network across every single customer touch point. within the digital world, which seems to contrast with the exclusivity known for its The 2016 factbook, based on industry leaders’ feedback, offers both operational and poleposition at the core of the luxury market. Luxury brands have to manage dual financial aggregates on the lmxmrq and cosmetics indmstries as oell as ceq nalmation aspects; namely to (i) maintain their heritage and create long-term value while (ii) parameters and multiples. It looks at the industries’ future trends and includes input from responding to consmmers’ expectations and trqing to offer mniime prodmcts that offer omr sector leaders. Oe hope qom find this report to be insightfml and thomght%pronocing instant gratification. At is the latter ohere lmxmrq companies are riscing losing gromnd to for wider discussion within your organization. more dynamic, digitally savvy players. Do not hesitate to contact us with any comments or suggestions. • Hold the positioning — Another category of players is threatening the balance of luxury Thank you, fashion houses: the affordable luxury segment is gaining market share, continuously offering new products that are both fashionable and competitively priced. Price positioning is crucial, never more so than today when consumers appreciate and respond well to transparency given that digital channels provide them with a constant Öoo of information regarding prodmcts’ characteristics oorldoide. Lop%end lmxmrq companies shomld therefore emphasire the imalitq and raritq of their offerings to encourage their clients to spend more and reduce the risk of cannibalization by more Roberto Bonacina Marco Pier Mazzucchelli nimble competitors. [email protected] [email protected] • Defend the luxury experience — During the luxury journey, a consumer is surrounded by opportunities that may not always be characterized by material, long-term pmrchases3 instead, theq maq hane intangible or more ephemeral benefits, smch as travel, art, epicurean gastronomy. In such an environment, personal luxury goods companies must demonstrate that they can offer the same level of experience and customer satisfaction. The luxury and cosmetics financial factbook 2016