The global luxury market is changing. Younger consumers are entering the market and information about brands is increasingly acquired via digital channels. China is now the largest luxury market if we aggregate all purchases by Chinese consumers inside and outside China, and the competition there is heating up as new brands continue to emerge in all categories.
One of luxury’s biggest players, the French luxury goods company LVMH, and the seventh-best-selling musician worldwide, Rihanna, just announced an unusual move that underlines the current disruption happening in luxury: the launch of a completely new and thoroughly global Maison called Fenty. The iconic singer heads the brand (Fenty is her family name), which is a prime example of just how much the face of the luxury market is changing today.
The Fenty brand will be digital first, a departure from the established strategy of the LVMH group and most other luxury brands. It reflects how young consumers all across the globe are primarily digital now, and not only for information exchange and social media but even for their luxury purchases. Fenty is also the first luxury brand by LVMH not headed in its creative direction by an actual fashion designer but by a music star and media influencer — one who has an enormous following around the world. In a sense, the brand is replacing traditional artisans with influencers and Key Opinion Leaders (KOL). It will be exciting to see if other brands adopt this model.
While the product portfolio has not yet been revealed, I expect a fusion of high-end tailoring with workout and streetwear that vaults athleisure into the luxury segment. LVMH announced that the brand’s management team would be multicultural as a way to connect with globalized consumers who get inspiration from all areas and cultures. It will also be the first luxury brand created and led by millennials.
A new digital-first luxury fashion brand that’s run by a young, female musician and influencer reflects consumers’ changing expectations for luxury. But it also brings up interesting questions about the Chinese market and how it will affect the future of luxury. China’s luxury consumers are all digital natives, the youngest in the world, the majority of them are female, and KOLs and influencers drive their brand preferences: attributes that are eerily similar to those of the Fenty brand. I believe the model LVMH is creating could be a blueprint for new luxury Maisons in the future.
A theoretical digital luxury brand from China that employs a Chinese millennial influencer to direct it and focuses on Chinese consumer tastes could be the next brand-building venture for LVMH or another luxury company. Since China is now the most significant luxury market and initiates most luxury trends today, I would not be surprised to see this China-focused approach unveiled soon.
But unlike Fenty, I would expect such a brand to be even younger (focused on Generation Z) and centered around wearables and technology with native distribution in all relevant Chinese social media networks and e-commerce platforms. To develop such a brand, fundamentals like rigorous brand positioning, a customer journey strategy, and a luxury strategy must be implemented. With the opportunity to start from scratch, I would expect this brand to use the most advanced artificial intelligence technologies to link consumer consent with digital activation and digital sales strategies. But for now, we’ll just have to wait and see who will be the first to step up to this challenge.
Daniel Langer is CEO of the luxury, lifestyle and consumer brand strategy firm Équité. He consults some of the leading luxury brands in the world, is the author of several luxury management books, a regular keynote speaker, and holds management seminars in Europe, the USA, and Asia. Follow @drlanger