I have personally watched the progress of the luxury goods industry for the past 15 years, and this burgeoning market is finally getting the recognition that it deserves.
The European Commission has heralded it the driver of the ‘European industrial renaissance’ and a model for many other industries – hardly surprising with a predicted valuation of £12.2bn by 2017 in the UK alone, and worth some £107bn globally next year.
The British luxury industry has flourished where others have floundered during tough economic times, with volumes growing and prices outpacing inflation, as demand rises within new and emerging markets.
Now, more than ever, brands need to invest in seamless, global marcoms strategies to continue to succeed – both in the UK and abroad. It’s one reason that Bell Pottinger recently launched a bespoke luxury division – to meet those communication needs and build on the rich heritage of work we have undertaken for luxury brands.
As brands enter emerging markets, their communications approaches must be spot on. They need to work with agencies that understand the nuances of new markets and their consumers.
With expansion into Asia and the Middle East, luxury companies need to hit the right note so that they can tap into new wealth, as we have seen with Mulberry, which has opened several new stores in prime locations using marketing and PR initiatives that highlight the brand’s heritage and craftsmanship.
Unsurprisingly, with the allure of these untapped markets, merger and acquisition activity is strong. Therefore brands also need agile PR to navigate through the change and potential conflicts that acquisitions can unearth.
The industry faces other unique communication challenges, such as counterfeiting and cheap labour. China is the leading luxury spender worldwide. But it is also reportedly the leading producer and supplier of fake goods.
With expansion into Asia and the Middle East, luxury companies need to hit the right note so that they can tap into new wealth
When a knock-off handbag can be sold at a snip of the price of the luxury version, then the threat to intellectual property is clear. It is up to comms experts to help protect a brand when its integrity and exclusivity are at stake.
At home, the Made in Britain stamp is gathering pace. However, in a competitive industry and global marketplace, it is hard for some brands to manufacture cheaply at home using British materials, while keeping their prices realistic.
But if they can, promoting our heritage represents a golden PR opportunity and one that should be relished. Above all, one of the most complicated hurdles for the industry is how to deal with the digital age. Mobile and online shopping have changed the entire landscape.
Brands have historically been good at their own PR but now that online words and content can drive commercial success, this requires a holistic strategy that embraces every channel of communication.
Brands must also be bold and dare to be different with their digital comms, embracing high-end content to emotionally connect with direct customers who have so much choice at their fingertips.
With 330 million consumers worldwide already in its grasp and ten million new shoppers entering this lucrative market every year, there are exciting times ahead for the luxury goods industry.
It is a sector that will continue as an economic frontrunner, as long as brands have the right expertise to help them survive, thrive and stand out from the crowd in a global marketplace.
James Henderson is chief executive of Bell Pottinger