The success of the luxury sector is very much determined by the economic climate, political stability and competition within the market. Unlike other countries across the globe facing issues in some of these areas, the UK appears to be fairly stable and as such, could expect steady growth in the luxury sector in 2016. However it’s important to note that those within the luxury sector have experienced some harder times than normal in the past few years and growth is going to be determined by those brands that are willing to adapt and change to ensure success.
The core challenge for luxury brands is the threat of increased competition, particularly in the form of new entrants to the market who have a narrow focus and a niche product or service offering. This threat means that existing luxury brands will need to reassess their brand identities and further focus their offering if they want to compete.
Trends expected in the Luxury Sector in 2016
- Individualism, exclusivity and localisation – as the luxury market faces increased competition particularly from niche brands, it is likely that organisations will need to focus on what makes their brand unique, how they make their product or service appear exclusive to their target audience and to consider ways of localising it to appeal specifically to the market they are targeting. Cultural diversity is going to be a key focus for the luxury sector in years to come.
- A changing customer base – Although customers in the luxury sector are often not price conscious, they do demand quality for their money, want products or services that have maximum impact and have become increasingly savvy consumers. Operating in a globally integrated luxury market has meant that brands need to pay more attention to their price points as travelling luxury consumers are happy to conduct their transactions abroad to exploit preferable rates.
- A digital presence is key – digital technology has enabled customers to access more information about luxury products, services and lifestyles. This needs to be a core focus for all luxury brands particularly in terms of ensuring their ecommerce strategy is a robust one and the digital experience they are offering their target audience mimics the luxury feel of their brand. The biggest challenge is trying to define what a luxury digital experience actually looks like.Social media will also play an important role in any luxury brand’s digital strategy as this helps to build the lifestyle image of the brand. Successful luxury brands will consider engaging social media influencers to drive their presence, engagement and reward programmes with their audience.
- Experience is everything – customers within the luxury sector are looking for diverse yet individual experiences. Brands that are able to achieve this will solidify themselves within the market although it does require constant review as the market is always evolving.
- Increase in start-ups – with consumers focusing more on authenticity and artisan products we expect to see a number of new luxury brands popping up, many of which will pose serious competition to more establish brands as their niche offering rivals the more traditional luxury experience.
- Increase headcount, increase new ideas – We expect luxury organisations to look to hire outside of their normal talent pools as they acknowledge the need to bring in fresh ideas and accelerate development. Luxury recruitment will very much mirror the changes and expansions happening within the rest of the business. For example there will be a focus on hiring those with digital skills and technology backgrounds as well as incorporating a diverse workforce that is reflective of the market.
Within London specifically, we expect a positive year for the luxury sector, particularly within the hotel and property industry. According to research from Property Week, enquiries for flexible office space rose by 21% and by 15% for non-flexible. Additional research from BCA suggests that the serviced office space contributes £2bn to the UK economy and this figure is only set to rise in 2016.
Additionally, the serviced office industry looks set to explore the business hotel industry as merging the two could offer luxury business clients a holistic offering to business travel.
If you are currently looking for a career move, we have some fantastic service office jobs and business centre jobs available. Contact The Change Group, Hospitality and Luxury Recruitment Agency, for more information about current luxury sector jobs.