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These Trends May Define the Future of Luxury in Retail

Retail is transitioning into a more connected, information-driven industry and luxury retailers are no exception. Although luxury players tend to move at a different pace and cater to a different kind of consumer, larger trends in the retail world can still have an effect.

In its 2018 report titled, “The Future of the Luxury Department Store,” luxury retail architect Sybarite, with the assistance of GlobalData and The Future Laboratory, detailed several key trends retailers will need to continuing working to adapt to in order to have a fighting chance with the next generation of luxury consumers.


One of the most difficult propositions in today’s retail market is how retailers can direct consumer’s attention away from digital channels, which don’t lend themselves well to the traditionally bespoke luxury experience.

“In today’s mobile-first digital age, luxury department stores are fighting back by drawing upon brand authenticity and experiential tactics. VIP services are being optimized in spaces that blend online shopping with gallery-like installations to entertain and serve today’s plugged-in consumer,” researchers said.

Sybarite pointed to examples, like Ssense, a luxury online retailer that has brought the ease of online shopping to physical spaces. Customers can go online and make selections from the 20,000-item catalog on Ssense’s website before a visit to a physical store. Once they arrive, they are presented with those same products, in-store, on a personalized rail.

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The mainstream method has been to track consumer data across platforms and attempt to offer them the right products at the right time through channels that they would naturally reach out to, which it has done with limited success. Luxury, however, must take a different path.

“In the future, dynamic pricing, on-the-spot offers and value-added services could link with personal profiles to create completely tailored shopping experiences,” Lucie Green, worldwide director at the Innovation Group said in the report. 

Cultural alignment

Researchers say a brand can only go so far when it comes to authenticity, but being able to fill a role within a community and collaborate with local culture can help build local credibility in a way a national ad campaign could never approach. For instance, Selfridges, a luxury department store in London, partners with Yorkshire Sculpture Park and local artists to take over a space in the department store once every six months.

Sybarite also points towards the “Gucci Garden,” a retail space that doubles as a museum for the iconic Italian luxury brand.

“Spread over two floors in a 14th-century palazzo, the museum is a powerful combination of an art exhibition with hospitality and retail. To show its respect for Florence’s impressive architecture, Gucci donates 50% of each ticket to support restoration projects in the city,” researchers said.

Embedded health services

Health-focused spending is expected to increase by 17 percent to $833 billion by 2020, the study says. Additionally, researchers cited a Schwab survey that found 65 percent of respondents equate wealth with having good health as opposed to money. Retailers should be able to capitalize on the growing relationship between luxury and health to appeal to this sentiment.

“In the future, luxury department stores will not only supply 360° products and services that support healthy living, but they will actively augment a sense of wellbeing through architecture and design,” the study noted.

Sybarite, a London-based company, again pointed to retailers in its region that have made innovations in this area—especially Stella McCartney. Its new retail location on Bond Street opened in June and boasts an air purification system, designed with the help of tech firm Airlabs, that delivers “the cleanest air possible” and a changing room that offers recorded advice from transcendental meditation guru, Bob Roth.

Experiential physical stores

Primarily, luxury retailers should begin to focus on physical spaces that challenge their consumers, offering an authentic and engaging experience that extends well beyond a purchase. According to a 2017 Mood Media survey, 48 percent of global consumers list “discovery” as one of the top three drivers for their brick-and-mortar purchases.

“While online retail offers hyperconvenience, department stores are responding by offering the exact opposite, slowing down the visitor by encouraging a more creative or contemplative shopping journey that purposefully adds friction to the experience,” researchers said.

For instance, the study referred to a recent decision by Saks Fifth Avenue’s flagship store to house its beauty department on the second floor of the building, instead of the typical first-floor location. Researchers say “slowing down the pace” of a shopping trip can reduce the feeling of being overwhelmed by choices.