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Luxury retail industry trends in 2024

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While the technology around us continues to reshape consumer behavior and expectations, luxury fashion is on the rise. It’s expected to reach a market volume of USD 84.04 billion by 2025. To make the most of it, luxury and fashion brands have to adapt to new trends that redefine the essence of exclusivity and opulence.  

Innovation, sustainability, and personalized experiences will be the key luxury retail trends in 2024. Let's explore how you can use them to your benefit.  

Sustainability driving luxury retail 

“83% of millennials in the U.S. value environmentally-friendly companies, and 75% are happy to change their shopping habits to be more sustainable.” 

Source: Fashion tech companies catapult the industry into rapid growth

Sustainability isn't just a buzzword anymore. It became a fundamental commitment for luxury brands. Customers tend to get more conscientious about their ecological footprint, and they expect the same commitment from their fashion brands. From eco-friendly packaging to responsibly sourced materials, luxury retailers are aligning their values with those of the socially and environmentally conscious consumer. 

One of the easiest ways to tap into sustainability is to adopt the concept of circular fashion. This promotes the resale and recycling of luxury items.  

Luxury brands are acknowledging the importance of extending the lifecycle of their products and reducing waste. The shift towards sustainability is not only environmentally responsible but also aligns with the growing desire for timeless, high-quality pieces that can be enjoyed for generations. If your product is able to withstand the destructive effect of time, finding a correlation with timeless watches and jewelry makes it a perfect fit. It turns the purchase into an investment and gives secondhand a more attractive sound. 

The Farfetch Second Life program is a great example of adapting circular fashion. It allows you to donate old designer bags. In exchange, you get virtual points that you can spend on your next purchase on their website. 

But there’s more ways to leverage sustainability for your brand that range from the way you create your products to adopting ethical hardware and technologies. If you want to learn more about that, check out how LUSH promotes sustainable and ethical eCommerce

Personalization redefined 

Customization has always been a hallmark of luxury. Nothing feels like a brand speaking directly to a customer than tailoring their offer to customers’ personal desires and tastes.  

In 2024, personalization will reach new heights. Artificial intelligence (AI) and machine learning (ML) are being employed to analyze consumer data to enable brands to curate personalized shopping experiences. From tailor-made product recommendations to bespoke in-store services, luxury retailers are ensuring that every interaction feels uniquely crafted for the individual. 

“Personalization and eCommerce are two sides of the same coin. If you're not personalizing, you're likely not maximizing your potential in the eCommerce sphere.” Source: 7 easy steps to unleash the power of personalization in your eCommerce busines

The key to unlocking personalization is customer and product data combined with proper information management. You have to build a process that collects information on users that analyzes them, segments them, and presents them personalized content, recommendations, and offers. 

The most reliable way to do that is by implementing a PIM system that can handle those features. 

Experiential retail 

Experiential retail is the trending new term for a holistic approach to customer experience. In luxury, it has been present for a long time. We all know that what we sell isn’t just about the product itself. It's about how the customer feels when buying and using it.  

Despite not being new to luxury retail, the way the trend spreads creates new tools that can be used in your business. You have to invest in creating immersive, memorable experiences that go beyond the transaction. Whether it's hosting exclusive events, providing VIP access to limited collections, or integrating entertainment elements within the retail space, you need to aim at making every interaction into an experience to remember. 

When it comes to leveraging this trend, you need to invest in flexibility. You have to be able to follow the luxury retail trends and embrace new ways to engage customers. For sure, the first step to achieve that is building expandable software architecture that leaves open ways for future integrations.  

Right now, artificial intelligence, augmented reality (AR), and virtual reality (VR) seem to be at the forefront of creating new and unique shopping experiences. It’s explored by companies like Apple, Nike, and previously mentioned LUSH.  

When it comes to eCommerce, it’s all about the user experience and making online shopping as seamless, pleasurable, and unique as possible. But in the age of omnichannel, you can adapt experiential retail for both online commerce and brick-and-mortar stores. The latter gives you more options to engage all the senses and turn the shopping experience into an engaging journey. 

“Adapting experiential retail strategies for online shopping involves: 
- Creating virtual showrooms and 3D environments. 
- Personalizing customer experiences through artificial AI-powered recommendations. 
- Offering interactive content and live shopping events.”   Source: What experiential retail means for the future of shopping

Final thoughts 

Luxury retail is experiencing a paradigm shift where technology, sustainability, and inclusivity are becoming crucial puzzles in retailers’ strategies. To keep up with the changes, the luxury shopping experience has to become more immersive, personalized, and socially responsible in order to reflect the changing values and preferences of discerning consumers. As these trends continue to evolve, the luxury retail sector is poised to redefine the very essence of opulence and exclusivity in the years to come. 

Published November 14, 2023