In our final Retail Insight of the year, Charlotte Harrington, the Co-CEO of Belu has kindly taken some time out from her day job to pen an article that takes a forward-thinking look at the luxury sector and how its current position is the beginning of a new marketplace in the future.
What does the future of luxury look like? As costs mount and sustainability tops the global agenda, mindsets and markets are constantly shifting – so as with many other retail markets, the blueprint for tomorrow’s luxury landscape is still a work in progress.
But what can help brands define the path ahead, is to use the growing consumer conscience as a compass to navigate it. By doing so, businesses can future proof themselves, fuel the industry’s evolution and play an active part in shaping a brighter future – rather than simply sitting back and watching it unravel through clenched teeth.
So – where to from here? As we interrogate this transition, the same questions understandably emerge: How can tomorrow’s luxury market reduce its impact? Can caring about the planet ever be commercially viable? How can brands stay relevant, resilient and ahead of the curve?
The answer to all these questions is the same: It’s about purpose, having passion, taking action, caring about people and using business as a force for good.
It’s about joining a movement of like-minded businesses that belong to something bigger than just buying and selling – setting yourself apart by integrating progressive thinking and purpose into core business strategies, operations, mission and vision.
But wait – aren’t purpose and luxury mutually exclusive?
Purpose is the new black
What springs to mind when you think of luxury? Perhaps it’s provenance, authenticity, integrity, bespoke or attention to detail. Now think about what defines purpose – any overlap?
We often think about luxury and purpose as parallel lines, experiencing the familiar cognitive dissonance of indulging despite its impact. But what if we reframe this dynamic as an intersection – what does this space look like and can businesses ever be commercially successful there?
The answer is yes. But before we delve into how, let’s take a look at the current global luxury landscape.
The global luxury market is in transition – Although global luxury spending broke records in 2023, there has been year-on-year growth in luxury goods and the interest in luxury experiences is escalating – there are also early signs that the market’s growth may be slowing down.
Luxury has a sizable impact – With the world’s hospitality industry, fashion industry and retail supply chains contributing up to one per cent, eight per cent and 25 per cent of greenhouse gas emissions respectively – it’s fair to say the luxury market continues to have a sizeable environmental impact.
Brands need to evolve – With 77 per cent of luxury consumers in Europe saying sustainability is an important purchasing factor and 52 per cent willing to pay up to 10 per cent more for green luxury goods, staying relevant, resilient and ahead of the curve requires brands to lean further into innovation and sustainability.
Purpose-driven is the future – Arguably the more conscious consumers – Gen Z and Millennials – are estimated to make up 25 per cent – 30 per cent and 50 per cent – 55 per cent of luxury purchases by 2030, respectively, so the demand for sustainable luxury is likely only going to grow.
What this all points to, is that a new marketplace is emerging: Purposeful Luxury. This is what that intersection looks like. This is the future of the luxury industry. This is the space where Belu exists – where business is done differently and where consumers feel they can make their own tangible difference by choosing it.
Doing business differently
It’s clear that the current business model needs to evolve. But in today’s challenging and unpredictable economic climate, change isn’t always easy to navigate – especially when the success of your company is on the line.
How can brands adapt, build consumer trust and demonstrate a clear purpose without sacrificing quality or profit? Crucial to this journey is prioritising transparency, accountability, commitment and collaboration.
According to a 2023 survey, 74 per cent of consumers prefer buying from brands that are transparent about sustainability practices and progress towards targets. A great way to achieve this is through regular reporting; providing clear, verifiable information about sustainability efforts and their impact. But simply expressing commitment isn’t enough – your business needs to embody it.
Brands can and should be at the forefront of efforts fuelling positive change – but this doesn’t have to mean compromising on quality or profit.
Locally-sourced, purpose-led and sustainable can be the pinnacles of tomorrow’s luxury landscape. We can build a bridge between elegance and environmental impact, premium experiences and ethical practices. And, like Belu, businesses can thrive at the intersection of purpose and luxury – future proofing themselves and fuelling commercial success while delivering positive impact for economies, society and the environment alike.
