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Insights from the open innovation challenge on the future of luxury
Foreword by Gaëlle RODRIGUES, Client Account Leader – Luxe
Until now, the world has undergone and still encounters series of deep transformations at accelerated pace. Few examples to demonstrate the impact through:
– COVID-19 global crisis has redefined our social and economic behavior
– IPCC report urged sustainable development to cope with climatic change and raw material shortages.
Being up to date about constantly evolving technology, sustainability, and consumer habits requires us to be attentive and lead new strategies in order to maintain attractiveness and profitability in the luxury sector.
Coping with those changes, the luxury sector renews itself.
- The personal luxury goods market has grown by 68% between 2010 and 2019, reaching 281 billion euros.
- After COVID global crisis, the sector jumped to 283 billion euros in 2021
- The global luxury market is projected at 1,3 trillion euros in 2025
Digitalization of the luxury sector is not black or white. On one hand, a shift to online presence and sales may undermine scarcity and therefore uniqueness of luxury houses along with their commitment towards sustainability. On the other hand, online channels grew by 50% between 2019 and 2020 and +27% the following year (estimated value of 62 billion €) have attracted more diverse panel of luxury customers which led to more inclusive Luxury.
Customer loyalty is a key success factor for fashion houses. Understanding the client and his/her expectations locally and globally may create more balanced and less volatile markets.
As an example, Gen Z and Millennials root for brands that stand for their ideas and opinions. Their shopping habits value Luxury Houses that authentically engage in environmental and social issues.
There are more challenges and changes that the Luxury sector will need to turn into opportunities by appropriating codes they do not master yet.
In light of these evolutions, onepoint and Manadvise organised the Future of Luxury challenge for ESCP master students around four strategic areas:
- Digital for sustainability
- Regeneration of the environment and biodiversity
- The future luxury product
- Luxury know-how of tomorrow
The Future of Luxury challenge with ESCP Business School students
By choosing one of the topics above, students needed to answer to the following problematic: How can luxury players use their ability to innovate and reinvent in order to work for their customers & societal issues whilst keeping their identity?
Each team’s outcome is summarized below.
Theme 1: Is digital the key for a sustainable fashion? What are the opportunities and threats of digital technologies from a sustainability perspectives? These questions entail subquestions such like: What are the use cases along the value chain from sourcing to consumers? Who are the key players? The most promising technologies? Is there an enviromental paradox of the digital transition ?
Members of the team :
Hanwen Zhang, Margaux Pintard, Mohamed Ali Thiyfa, Mehdi Rakkaby, Lorenzo Huerta Baribay, Imane Bendamou
Theme 2: Actor or spectator: regeneration of the environment and biodiversity.
Key questions in this topic are: How can the operational models of luxury players participate in regenerating the environment and biodiversity? How can we move from an extractive logic to a logic that adds value for both customers and the environment?
Members of the team :
Francesco Cundari, Gabriela Del Nero, Niccolò de Leva, Arnaud Esteva, Yash Mundada
Theme 3: What next? The future luxury product. What kind of experience? Value proposition taking in consideration new business landscape (digital/physical)? Which kind of new business case / model related to the next product / experience? What’s ahead for the business ? Who are the new players? The most promising technologies?
Members of the team :
Margaux Lautier, Marco Menga, Berengère de Roquefeuil, Gianpiero Picco, Anne Guillot
Theme 4: The Luxury know-how for tomorrow. What new skills and know-how to meet the challenges of the luxury transformation? Who are the next luxury craftsmen? What are the future cross-partnerships, from sourcing, design, craftmanship to product experience?
Members of the team :
Sanjar Khankeldiev, Saad Ait Mansour, Hanru Yang, Alessandro Ronchi, Nicolò Origliasso
Final words by Martin Lauquin, Creative Strategist at onepoint
What if you could arm yourself with a periscope and observe the luxury industry in 10 or 20 years. What would you see there? What would be the opportunities to be seized or the obstacles to be overcome? And what path should we take to ensure a chosen future, not suffered?
Because understanding future developments is more necessary than ever, this challenge at the crossroads of foresight and innovation has worked to provide a reading grid of future developments to help us take a step back and help the pioneers of tomorrow’s luxury to prepare for the future.
What if the craftsman of tomorrow was a bio-hacker capable of detecting and diverting alternative and biodegradable materials to make exceptional objects?
What if luxury houses operated mycelium farms – mushroom roots – to grow watch straps and shoe laces?
What if consumers were mainly second-hand and bought luxury goods through subscriptions?
What if, from one generation to the next, we no longer only transmit a product but a digital token telling the story of the product?
Far from futurology, the value of these projects is not to « predict » the future! They have both a pedagogical and strategic aim to bring out fields of possibilities, in which we must position ourselves today, according to what we consider to be a desirable future. By debating these projects, we can collectively explore hypotheses for the future, sometimes reassuring, sometimes disconcerting, always useful.
Because, in the face of uncertainty, there is not a single future to predict but several futures to prepare.
About Manadvise
Manadvise is an open innovation agency that bridges academia and businesses through sustainable innovation challenges.
Our conviction: Sustainable innovation requires a systemic approach and builds on collective intelligence. Our « magic sauce » gathers academic experts, students, researchers, and consultants within a unique innovation ecosystem.
About onepoint
Onepoint luxury is a community of experts and professionals who accompany main luxury industry players in their innovative and strategic challenges of today while also projecting the future transformations.
« Beyond the obvious » is the motto of onepoint that characterizes approach we take to tackle variety of questions Maisons and brands ask themselves regarding sustainability, operating and technical innovations, preservation of know-how and traditions while digitalizing presence and enhancing customer journeys.
https://journalduluxe.fr/fr/business/montgolfier-bain-tendances-luxe-2021-2022
https://www.bain.com/fr/a-propos-de-bain/media-center/communiques-de-presse/france/2021/Le-secteur-du-luxe-rebondit-des-2021-pret-a-renouer-avec-ses-niveaux-de-croissance-historique/