Now in its sixth year, Arab Luxury World landed once more in Dubai last week, featuring keynote addresses by luxury jeweler to the stars Valérie Messika and neuroscientist Professor Moran Cerf. This annual industry-facing conference might appear to be all-business on the surface, but we gained lots of fascinating insights that are important to the way you shop and spend. From the way neuroscience is helping shape luxury marketing to what the future holds for the brands you love and how you’ll access them, these are the five most interesting things we learned at Arab Luxury World 2019.
Make Way for Millennials
There are so many reports on how millennials (those born between 1980 and 2000, making them the largest generation in history) have shaped, altered, or disrupted global industries that we’ve completely lost count. Millennials – a.k.a. Generation Y – are currently the most sought-after demographic in luxury retail, and Generation Z is hot on their heels. According to Head of Luxury at LinkedIn Tatiana Dupond, Generation Y and Z combined will capture 55 percent of the total luxury market by 2025.
Why is this important? Generation Y and Z are hyper-focused on brand values, which means they expect transparency, ethical brand behavior, diversity, inclusivity, and integrity. Dupond offered Gucci’s ‘Equilibrium’ platform – which narrates the brand’s commitment to a Code of Ethics driven by its Culture of Purpose – as an example of the behavior that many luxury brands will soon adopt in order to court this vital demographic. Expect to see many more brands dropping furs and exotic skins from their product offerings in the near future, working with a more inclusive array of models, and championing the Modern Slavery Act.
Analog Beats Digital
During the Cracking the Luxury Digital Code session, guest speakers delved into the way the digital realm has changed and enhanced our shopping behavior. 80 percent of luxury product searches are now performed on mobile – most of them in-app – while brands like Dior have launched AI-driven chatbots to help users navigate the digital retail space.
While there’s no doubt that digital access has changed our relationship with products, what is surprising to learn is that 100 percent of the professionals who spoke at Arab Luxury World 2019 believe that in-store experiences are here to stay and, furthermore, that digital will never fully replace analog when it comes to buying luxury products. When considering a luxury purchase, most consumers will browse on their phones – especially on the brand’s website and Instagram account – but the majority refuse to make a purchase until they proceed to the boutique and experience the products in person. Think of your phone as the first access point and the store counter as the last, and you’ll get a better idea of how the traditional retail model has changed.
“Experience” was a big buzzword at the conference, but we think Charles Haddad of L’Oreal Middle East summed it up best when he said, “Stores are the new media, and phones are the new stores. The store will have a much more important role in the future in terms of creating great experiences.” We look forward to seeing how that plays out.
The Influencer Bubble Is Bursting
If you’ve experienced influencer fatigue lately, you’re not alone. It turns out a lot of brands are moving away from influencer-driven strategy because of its failure to resonate with their audiences and convert to sales. Because influencers are paid to endorse certain products or travel-related benefits, people have trouble trusting the endorsement because they feel they lack transparency.
One of the speakers gave an example of making a shoe purchase because an influencer he followed assured that they were the “most comfortable shoes” he had ever worn. The shoes shredded his feet during his first day of wear, and he swore off following influencer endorsements after that. One presentation, which followed the super-affluent female Saudi shopper, showed that they tend to trust regular people on social media rather than influencers. “They influence her purchasing decision far more than influencers,” the presentation said, “because regular people are transparent and have nothing to gain from endorsing a product”.
That isn’t to say that all influencer campaigns don’t convert to sales. There are plenty that do, as in the case of Dior’s critically panned but commercially successful ‘Saddle’ campaign, which seeded the bag to hundreds of global influencers and had them post about it at the same time on the same day. The bag sold out and was waitlisted worldwide because of that campaign. Numbers don’t lie. Regardless, it seemed to be the consensus that influencer-based strategy is tricky to navigate, and that most people are tired of seeing influencer marketing saturate their social media feeds.
Welcome to the New Internet
There is no doubt that technology has rapidly changed our lives, but as it continues to dominate how we relate to the world around us, one thing is clear: luxury brands benefit the most when technology helps simplify the lives of consumers. While it wasn’t the main focus of the talks, our ears perked up when one speaker declared, “5G is going to change everything.” As the new form of mobile-internet connectivity approaches, 5G promises to make speed 20 times faster, which means we’ll soon be downloading entire films and streaming 4K videos quickly, easily, and without interruption.
5G also brings with it the promise of a new “tactile internet” experience. If your mind is already racing over how that will change the digital-shopping experience, you’re in good company. We also started to speculate on how tactile internet might allow us to touch and feel items before buying them. Tactile internet is brought to you by a sensational new technology called haptic feedback that uses focused sound waves to create sensations on the skin. Sound like an episode of Black Mirror? It does to us, too.
Your Neurons Are Telling on You
Hands down, the most fascinating presentation at Arab Luxury World 2019 came by way of neuroscientist Professor Moran Cerf. What does neuroscience have to do with luxury retail? More than you’d think.
During his fascinating one-hour lecture, Cerf outlined the gap between how people present themselves and how they behave. It turns out, we are unreliable narrators when it comes to stating what we do and do not like. That makes things like focus groups and polls tricky sources for luxury brands when they try to create their marketing strategies. Because of this, there has been a recent shift in who gets to make marketing decisions. It used to be computer scientists, data analysts, and financial engineers, but it’s increasingly shifting towards neuroscientists and psychologists – a.k.a. experts who can tap into core desire better than anyone.
According to Cerf, “Aligning interests with outcomes is the ultimate way to make people happy.” Neuroscience has been the key to unlocking these innate desires, by mapping neurological responses in subjects when they are confronted with images. They have been able to isolate the sound and look of a neuron firing in positive response to an image, thereby removing all of the guesswork from what you actually like versus what you say you like. This information can then be used by brands to understand their customers better, align their brand messaging, target individuals, and measure engagement.