Luxury 2025 with Dr. Daniel Langer

2024 has been quite remarkable year it has the been the first time in a non- crisis year that the luxury it's a pleasure and privilege for me to be here today on my flight from the US to Shanghai and this is a great opportunity for me to reflect a bit on where I see the luxury Market heading in 2025 as you all know 2024 has been quite remarkable year it has been the first time in a non-me this year that the luxury industry actually lost Shoppers um the estimates are that the market is going to

be negative by -1 to -2% and while some of the best luxury brands are growing in part double digit there are so many brands that are strongly negative beginning of 2024 I wared exactly about this I was giving indication that Brands need to really step up their game to be successful uccessful and exactly this came true customers in today's world expect just so dramatically more of BRS we have a new generation the Gen Z that is incredibly gaining importance now among Brands and what I observe that still so many brands are underestimating their influence and

you know now for me traveling to shamai it's an incredible opportunity to meet with a lot of luxury gen Z clients some ultra high net worth individuals and what is remarkable about the Chinese market is how young this Market is with an average age that is estimated around 29 for all luxury purchases an average about 10 years younger than in the rest of the world a much more digital Market a much more fast-paced Market a market where customers in the meantime has incredibly high expectations and you know I think it's not just just by chance

that we see brand struggling yes of course there is economic headwinds that are in the market but what we see overall is that customers also are re-evaluating you know which brands to invest in which brands to connect with so for Brands to be successful in 2025 there's a couple of things that I think up your vle to do the very first is you have to to be extremely excellent in brand storytelling this has not changed because the Brand Story is really the foundation of value creation brand storytelling is everything because you know our estimates show

that for some Brands 98% or more of the perceived value is in the story so I repeat 98% or more and how much time do you typically on a day to day spend on reflecting on how to optimize your Brand Story Probably not the 98% if you look at the entire organization and to me the Brand Story and the mistake that is done so often in so many companies is never ever confuse the Brand Story with a marketing campaign a marketing campaign should be a reflection of the Brand Story it should transport the Brand Story

to customers but fundamentally the Brand Story is about your values it's the core promise that you give to your clients and if there's no Clarity on the Brand Story you know how can we expect that clients will understand what the brand is all about so and in times where Bain indicates that many customers are you know losing trust in brands are missing the brand DNA are seeing one brand very similar to the other are missing differentiation and I'm frankly also missing inspiration the importance of brand stor storytelling has never been more important than this year

last year I already urged Brands to focus on this this year you know I cannot overstate how critical it is another learning that we had from the main study was that many customers for the first time actually think that a lot of luxury brands are frankly overpriced and it's indicated actions we see that um you know St traffic is down for many Brands while traffic in outlet malls is increasing or traffic in dutyfree areas of airports is increasing so customers are moving to outlets where they feel they can buy brands at more affordable price points

and when customers challenge the value perception this doesn't mean necessarily that the prices are too high but it means that the value that is delivered is not reflecting the prices that are charged and you know if we go back just a few years from 2021 to now if we basically see how many brands have increased prices not just you know according to inflation but some brand 60% 80% or more in a time span of 3 to 4 years these are such enormous jums that need to be backed up by focus on creating perceived value so

brand storytelling is the ultimate Ena of creating perceived value so focus on brand storytelling the brand storytelling is going to help you to increase value and then make everything about the clients and over the last couple of months I had the absolute pleasure pleasure and privilege to travel literally the world I've been doing presentations you know from Hong Kong to Singapore I did presentations in Paris in New York City um in Malaysia in uh Africa and South Africa um in Middle East practically all around the world about the foure of luxury which are emotion experience

engagement and exclusivity and this concept that I also have written um extensively about over the last couple of months is so critical because this is a framework that enables companies and teams to to switch their way of approaching the market from a product focused way to a client Centric way and yes practically every organization is saying that um they are client Centric but if you really reflect how many experiences you had over the last couple of months where you felt that you were at the absolute center of attention everything was centered about you not sure

if this were so many so I urge you to really take client centricity serious to think what needs to change within the organization to really achieve absolute client centricity and only when customers feel at the center of attention customers feel that they are valued only then will a client experience truly feel luxurious and the for e framework almost forces us to think how can we create enough emotion how can we create client experiences that go beyond transactions how can we really engage with clients and engaging means having a dialogue that is not just about the

purchase but it's continues and even extends before the purchase starts and after the purchase um it's a dialogue that inspires the clients of a brand to to become advocates for the brand um it's a dialogue that inspires community so all of these are so critical elements for brands that the 4E framework with the fourth e is also of exclusivity where it's all about how much is the client really at the center these are these are the critical things that we need to focus on over the next um 12 months so it's all all about regaining

trust it's all about inspiring customers and it's all about creating extreme value so if you follow that Playbook if you work fundamentally on your brand storytelling and build a foundation to break out of the Sea of sess if you use that then with inspiration and with Incredible customer experiences to inspire your clients to create desirability then you have a very fair chance to win in 2025