Arab Luxury World: Trends to watch

A profound transformation of the luxury industry is underway. This was the overarching theme of this year’s Arab Luxury World conference, as business leaders, industry experts and key media players converged to discuss how companies should prepare for this strategic shift.

Mobile, Omnichannel, and Influencers

OMD participated in three panels and one private speaker session, highlighting the need to embrace mobile in the region, presenting insights and igniting the conversation on how best to utilize this in brand strategy, as well as considering the rise and implementation of omnichannel marketing and the ‘good, the bad and the ugly’ world of influencers.

These themes resonated through other speaker panels and breakouts, as the region continues to adapt to the digital shift and what this means for traditional heritage luxury brands. When it comes to mobile, it’s clear that ‘there’s an app for that’ mentality isn’t working. We need to be much more selective in how we communicate, taking a more holistic approach to CX and be part of the consumer story, not enforcing brand presence where it’s not wanted.

The same is true when we consider our approach to omnichannel. Brands have merely adopted eCommerce to keep up with growing hype and need, yet, their strategy remains disconnected from the store presence. And it’s not just the brand and consumer relationship that needs to evolve, but organizations too. Siloed departments between eCommerce and marketing make no sense in today’s omnichannel world; there should be integration between the teams, all striving for one goal.

Companies have felt the need to accelerate their plans inline with growing regional and international trends, in part to ‘keep up’ with the competition, but also to try and anticipate what comes next. This is certainly the case with omnichannel strategy and the same could be said of influencers. While the regulation enforcement will create an even greater divide between the three tiers (celebrity, macro and micro) of influencers, brands will also need to reassess their metrics for success, focusing on a specific objective from the outset.

Though the topics were fairly well trodden, in the sense that we as marketers have explored and debated them for a while, the perspective gleaned from several speakers, brands and clients, yielded a new view on what will come next for the luxury world. Here, we examine the trends to look out for…

Rethinking retail

If there was one thing which came across in multiple panels, it was that retail ‘as a whole’ isn’t dead, but boring retail… well, that’s another story. Those who aren’t innovating or investing in the right talent and tech will fall behind; it’s all about creating a brand universe for the consumer to immerse themselves in.

The idea of a ‘hybrid retailer’ available at the customer’s fingertips shows how we as brands and marketers need to think today. We need to mirror the online and offline experience, connecting the dots for the consumer to find what they want, on the right channel, as quickly and as seamlessly as possible. In this vein, mass communication and messaging are quickly becoming a thing of the past, as brands set up specific channel strategies to push rich, personalized content, designed to delight, engage and convert.

The E factor

The transactional economy is waning. Brands have realized that to survive, they must shift their strategy to be more consumer centric, focusing on the experience and emotion attached to it, in order to make a lasting connection. Brand storytelling has become an essential component of the marketer’s strategy, providing purpose that goes beyond the transactional value of owning a luxury item. It’s about keeping the perception of a 1-1 relationship between the two entities, brands need to show that they are speaking only to that one consumer at any given time, however global the brand may be.

Look at Net-A-Porter for example. They may have used tech to reduce friction points (robotics used in their distribution plant) to scale up their business, yet they have not lost their sense of identity, or the human element that oversees each and every package to leave the warehouse. The consumer appreciation element that comes with this methodology is very high, as it creates a connection and generates an emotional response of pleasure.

Clearly this is something we need to pay attention to. Experiences inspire an emotive reaction; the perfect combination when you consider the want, the need and the desire traditionally associated with luxury purchases.

Social shopping is on the rise

We’ve seen all the key social channels making their move into this realm, with shoppable posts becoming commonplace on the likes of Instagram and Snapchat. However, there’s a channel which is often overlooked on a global level, yet regionally is very active in this field- WhatsApp.

Net-A-Porter confirmed this is being used as a triangulation for discussion between customers, their friends and an assigned personal shopper, to discuss key trends, share outfit inspiration, pre-order a product or make a request. Given that 71% of the Net-A-Porter business sales comes through mobile, there is an opportunity for luxury brands to utilize the popular messaging app for business, as well as personal needs.

The duality of luxury

Asking people to describe what luxury means to them differs from person to person, and perhaps this is the reason why luxury is shifting from the traditional, physical want, to a more experiential and personalized thing. This does vary by industry of course. In the hospitality segment, there may be no demographic to target, but ‘travel purpose’ instead and so they must work harder to tailor the experience based on client mood and purpose, rather than pigeonholing them into one category. Make no mistake, the definition of luxury in today’s world, is extremely complex.

What is clearer is the part luxury brands will have to play when it comes to demonstrating values that translate into action, particularly from an ethical standpoint. If they are to cater to the Gen Z consumer, and arguably, the employee, paying lip service to a trending topic won’t cut it, they must be respectful of all elements that running a business requires.

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OMD MENA

The OMD team works on delivering insights that unlock demand potential, ideas that ignite consumer desire and results that accelerate business growth for our clients.

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