Luxury Brands Need To Implement Change

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    While a few pure-play luxury brands continue to see growth, overall luxury goods and service providers are growing below their long-term economic potential, especially in China, Russia, and Europe, says a white paper by Milton Pedraza, CEO of Luxury Institute, LLC. Pedraza says these downturns are partly the result of cyclical challenges and the increase of online buying which is cannibalizing store sales. “The real danger for luxury brands that we see comes from self-inflicted wounds caused by the inability to accept new realities and failure to execute. Doing either of these far too slowly is also dangerous,” says Pedraza. In 2015, these brands need to realize there are too many luxury brands, but not enough great ones. Luxury brands need to stop benchmarking the mundane players, understand their own brand identity, values, and standards, and get back to delivering differentiated, fully-priced value in 2015. The luxury industry is healthy, but those who anticipate change will have a decided advantage, says Pedraza. Many luxury goods and services brands enter 2015 with false confidence and may only realize too late that the world has changed. Enlightened brands are jumping off of the cresting wave and onto an emerging wave to drive sales and profits in 2015.