Summary
The Project:
The Future Of Luxury Shopping Experience was about planning future scenarios that could be used by luxury companies. The goal was to educate the companies in how they could prepare for future changes that would effect the population on a day-to-day basis.
My Role:
I was responsible for collecting the secondary research and analyzing the 5 key forces and drivers for the future trends. Based on these trends, I designed the three scenarios for the three personas, as well as the personas’ buying behaviors.
What I Learned:
I practiced developing scenarios and creating personas that were focused on ensuring the survival, further business development, and increase in opportunity for the certain entities.
Executive Summary
We are not prophets. We are not mind readers, tarot card magicians or soothsayers. What we are is a talented group of students that are helping to plan for future scenarios in order for luxury companies to make educated decisions in order to prepare for future changes that effect the population on a day to day basis. By looking into the future and developing scenarios, it ensures the survival and the further business development for these entities. The aim of this process is to comprehend the future of the luxury shopping experience through research, insight and trend forecasting. We will attempt to understand future changes of the luxury shopping experience and develop methods to react to these changes. We will look at several driving forces that have potential to augment the way in which luxury shopping is done. Luxury encompasses many aspects of consumer products. From clothing and jewelry to automobiles and real estate.
SECONDARY RESEARCH
- History of Luxury map
Luxury is a hard concept to define. What the Queen of England considers a luxury is very different than what the CEO of Google considers a luxury. Luxury is in place to set social barriers between those that have money and those that don’t. Since the beginning of recorded history it can be seen how luxury goods have been used to show the difference between social classes. The Pharos adorned themselves in gold and rich textiles as a display of their power and influence. In the middle Ages only nobility could wear fine furs, rare jewels and expensive fabrics. With the establishment of a middle class luxury products have become more accessible to more consumers but is still a representation of wealth and power. For the basis of this paper we will establish a parameter of what we will be considering as a luxury item, we will also explore how this will change within the future scenarios.
- Lotus Blossom Mind Mapping
In order to narrow down which forces would have the biggest impact on the luxury shopping experience, the class used a mind mapping exercise in which each student wrote down specific events and occurrences that would have an effect on how luxury goods, products and services are purchased. The events ranged from unemployment to virtual reality to clothing trends. The ideas were then grouped depending on similarities and the key forces and drivers were developed. Based on the repetition and level of impact on the industry five main forces and drivers were decided upon. These include Political, Economy, Social, Cultural and Technology.
SYNTHESIS
- 5 Key Forces and Drivers
In order to plan and create scenarios we brainstormed a list of influences that could possibly have an impact on the future of the luxury shopping experience. Coming together we recognized some major trends that appeared more frequently than others. We established relationships between the influencers and this lead us to the creation of possible trends.Based on our continued research and the more prevalent drivers and forces we have selected five standouts which we believe can have the most significant impact on the luxury shopping experience. We selected these because they have had the largest effect on industries worldwide in the past and we don’t foresee that changing.
- The Persona
Time is the true great equalizer. It is something that no amount of money can purchase. What makes time into a luxury commodity is what different people spend their time doing. Vacations, experiences, knowledge. These will become the luxuries of the future. Vacations to all areas of the Earth, and beyond. Trips to the moon into the depths of the oceans will become the next level of luxury travel. The legalization of drugs that expand thoughts and create unique experiences will allow the rich access to activities other classes of people can only dream of. Education is something everyone has access to, from preschool to high school graduation is provided. Today, with the rising cost of college, graduate school and doctorate programs access to an education is more of a luxury. Student loan debt is crippling recently graduated young adults and has the potential to ruin our economy.
- Scenario 1 Digitize Fashion
Economy : In this scenario the economy does pretty well. There is no huge class disparity. The rich are rich (they always will be) and the middle class is comfortable. Luxury brands do well and are able to expand to offer more products to their consumers
Culture: Culture of luxury shoppers expands. There will always be luxury and luxury products and the offerings remain the same (cars, accessories and clothing). However, by 40 years luxury becomes more focused on the experience of the purchase. Traveling becomes a luxury because of the shortage of natural resources as does attending college. Knowledge and having the access to an education is something that is only open to the rich.
Technology: Technology expands exponentially during this time. Consumers go from using local 3D printing services to having 3D printers in their own homes. Consumers also use and deal with holograms and other virtual services when making their purchase decisions. At the end of the 40 years consumers are sick of the constant use of computers and would rather deal with real-life people. It goes from a dependence and excess of technology to a preference of personal attention. Fabrics, at first, will take a very heavy influence of technology. Fabric makers will at first incorporate as much of the new technology as they can into their creations.
Political: The global political climate will remain quite stable. The government does step in during the crisis of the depletion of natural resources and takes control of what can be produced and at what levels. With the increased use of 3D printers it is difficult to regulate tariffs and because the world becomes even more of a global environment policy makers have a more difficult time controlling aspects of the industry.
Social: Globalization continues to be an important aspect of the business environment. Luxury consumers will travel all over the world to make their purchases. Luxury consumers serve as aspirations to those who would like to reach the same social class. People will interact in similar ways, digital and via social media. Luxury consumers will have access to different membership plans and levels for their favorite brands. These different levels will provide access to a wider variety of products and provide special promotions.
Political: Government has weakened greatly over the first 20 years. Politicians become more of figureheads than actual authority. Power shifts from government to corporate executives. Taxation is low on businesses allowing them to grow. There isn’t government-controlled distribution of wealth.Government turns to an Oligarchy where it is the few governing the many. The CEO of walmart takes over as the president so that way he can gain more control. After this a revolution against companies and government in 2045 leads to restructuring of government. By 2054 the government has taken back much control. The government is a very strong. Government has set up many mandates on corporations limiting their size and power. There are heavier taxes placed on the wealthy and strong focus on wealth distribution.
Economy: There is a huge disparity between very wealth and very poor. Economy has been hurt greatly. A large portion of the population of America has fallen below poverty level. Wealthiest 1 % holds even more wealth. Middle class basically disappeared over the last 20 years. In 2045 the economy totally crashed. The valuation of the dollar has dropped greatly. Economy has begun to recover. Still many issues need to be resolved. Wealth redistribution has begun. Government assistant to the those below poverty has begun to help economy. The unemployment rate is still very high in in 2054 but is slowly decreasing.
Social and Culture: Collaborations of major companies have lead to companies branding themselves as a lifestyle. For example major corporation Unilever, Disney and Nike merged to create one major brand. This gives them the ability to affect consumers on every level such as food, entertainment and clothing. Several large duopolies exist and compete against each other. Consumer relate to one brand for his or her own identity. In a sense the consumer belongs to a brand like a gang or tribe. More than likely it is a brand that they work for some sector of. Society turns against brands and corporations. Two major groups come up those who stand by corporations and those who stand against them. The culture becomes that of revolution. Individuals look for change and individuality. People work hard to become individual and no longer want to be viewed as part of a group.
Technology : Not a major driving force in this scenario. Technological advancements are made by corporations but because they hold the power they limit who has the newest technology and who does not. The revolution and restructuring of the government also slow technological growth.
- Scenario 3 Luxury shopping as an experience
Economy: In this scenario the economy keeps a steady, fast development trend. After 20 years, as the world economy becomes more open to international trade, World Trade Organization members, consisting of economy power countries such as USA and China, release control or reduce taxes to encourage industries to enhance their product quality and services within a market environment of fair competition. Due to the global trade, the luxury industry pays more attention to its customers’ and clients’ shopping experiences, which is the important soft power for luxury brands or companies.
Technology: Technology is in stable development during this time. A service that is part of the shopping experience provides more convenience and faster transportation due to the improved technology. This helps global trade a lot, but during this time there are limited long-term innovations or scientific breakthroughs.
Culture: Customers shift to care more about spirit and emotional satisfaction. Luxury health care, luxury education programs, luxury trips, luxury events and so on become more popular for luxury customers. These experience-type products are a strong driving force for this emerging business opportunity. Luxury buyers will care more about the experiences which they can get from these brands. This will establish some travel agencies that focus professionally on luxury travel planning for their clients; the global cruise, yacht trip, personal island trip and many other top quality experiences will all be included in their services list. Personal service on luxury brands will still be one of the main items to attract their customers, for that, brands will put more attention on protecting customers’ privacy and will care more about their private using experience.
Political: Governments will cut tariffs of luxury brand firms and release the control of various kinds of trades. For instance, they will allow for more open international trading. Consider a gentleman buying an Aston Martin car in the US, where he only needs to pay 1% tax and go through a simple, formal process to get the car. Addition changes will see some illegal businesses, such as certain drug trades, to become legal.
Social: Globalization continues to be an important aspect of the business environment, but luxury consumers don’t need to travel all over the world to make their purchases. The business-to-customer business model evolves to become a one-to-one individual customization or will be based on customer preferences to offer service. The pursuit of a healthy lifestyle, luxury brand body training clubs and top supermarkets that only sell organic vegetables and grass fed meat will appear like mushrooms after rain over the next 20 years. Some current luxury brands, such as Chanel, may open their own luxury shopping center, within which you can buy any luxury products and food.
CONCLUSION
It is important for the luxury industry to pay attention to ever changing trends within each of the forces and drivers that were discussed throughout this project. By being proactive and taking necessary steps in order to prepare for future scenarios, businesses are able to take the necessary steps to make success a more easily achievable option. Following the analyzation of the three conceived scenarios, the class was able to see several overarching trends between the three.
These include:
Separating people in groups
Fluctuating levels of government control
Consumer need for instant gratification
Brands expanding into new product categories