Presentation on the generation change in the luxury change

1. Generation Change in the Luxury Industry
Gen Y and Gen Z
Presented by:
Ipsa Bansal
Umang Chaudhary
1MBA Project

2. Second best:
Beauty and handbagsTop personal luxury
growth categories:
Shoes & Jewellery (7%)
Luxury
Consumption in :
• Europe: €84 bn
• Americas: €80 bn
(rose 5%)
• Japan: €22 bn
• Rest of Asia: €39 bn
• Others: €12 bn
(stagnant)
Stagnant segment:
Watches
About the Industry
33% of total luxury
spend is from Chinese
consumers
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€1.2 trillion
2018
5%
Personal Luxury
goods
€260 billion
2
9 Luxury Segments
• Luxury Cars
• Personal luxury goods
• Luxury Hospitality
• Wine & Spirits
• Furniture &
Housewares
• Fine Art
• Gourmet Food and
Fine Dining
• Private Jets & Yachts
• Luxury cruises
6%
Factors affecting luxury
industry the most:
• Economic
• Social
• Technological
• Environmental
Porter’s 5 forces:
• Threats of New Entrants: LOW
• Bargaining Power of Buyers: LOW
• Threats of Substitutes: LOW
• Bargaining power of suppliers: MODERATE
• Competitive rivalry: MODERATE

3. Generation Y
Born after 1995
In-store Purchase
Digitalization affects buying decision
88%
Sustainability affects buying decision
41%
6%
3
Generation Z
Changing Consumer base
47% - Luxury Consumers (2018)
33% - Luxury Purchases (2018)
Born between 1981-1995
In-Store Purchase
Digitalization affects buying decision
75%
Sustainability affects buying decision
80%
52%
21%
55%
Future Luxury Purchases
(by 2025)?
Sample Size Sample Size
20%
SURVEY RESULTS
• Discovered Digital
• Less inclined to
discuss social issues
• Less optimistic
about future
• Grew up with
economic freedom
• Born with Digital
• More inclined to
discuss social issues
• More optimistic
about future
• Grew up knowing
economic turmoil

4. 1. Emerging designer
collaborations
4
Emergence of new Cultures and Sub-cultures
Will shape fashion and luxury by 2025
• Consumers demanding culture and size preferences
• Modest Fashion accounted for 40% of luxury women’s ready-to-wear
• Inclusive Fashion represents about 20% of luxury women’s ready-to-
wear
Bought a designer collaboration piece or special edition:
KEY TRENDS
Gen Y
60%
Gen Z
67%
LVMH’s collaboration with Supreme
The most appreciated, in China as in the USA and
Europe.

5. 1. Emerging designer
collaborations
2. Streetwear fashion
5
Emergence of new Cultures and Sub-cultures
Will shape fashion and luxury by 2025
• Consumers demanding culture and size preferences
• Modest Fashion accounted for 40% of luxury women’s ready-to-wear
• Inclusive Fashion represents about 20% of luxury women’s ready-to-
wear
KEY TRENDS
• Brands partnering with cutting-edge streetwear designers
• These high-end collections are irresistible for the new
consumer base
Off-White x Rimowa

6. 1. Emerging designer
collaborations
2. Streetwear fashion
3. Resale Market
6
Emergence of new Cultures and Sub-cultures
Will shape fashion and luxury by 2025
• Consumers demanding culture and size preferences
• Modest Fashion accounted for 40% of luxury women’s ready-to-wear
• Inclusive Fashion represents about 20% of luxury women’s ready-to-
wear
KEY TRENDS • Luxury second-hand market represents a $24 billion
• Growing at an annual rate of 12%
Bash and SMCP
partnerships with
Vestiaire Collective.

7. LVMH’s partnership with UNESCO:
Promises sourcing transparency while refining their
supply chain.
Sustainability and Responsibility
60% of the Gen Z and Gen Y: influenced by the topic of
Sustainability
7
Willing to pay more for products that have the
least negative social impact
Main issues this generation care
about:
• Climate Issues
• Animal Cruelty
• Use of non-biodegradable products
• Lack of transparency
• Social Responsibility
Í
LVMH’s partnership with UNESCO
Promises sourcing transparency
while refining their supply chain.

8. Evolution of Technology &
Digitalization
• 40% of luxury consumers will be shopping digital by 2025
• Want seamlessly integrated experience both online & offline
• Internet – an integral part of purchasing habits
• Deeper insights into consumer habits, increases brand engagement
Personalization AI
Merchandising
Virtual and
Augmented
Reality
Visual Search
8
‘Gucci Hallucination’ campaign
• a successful digital implementation of AR
& VR
• includes in-store AR and VR installation
• allow the consumer to become part of
the campaign as well as scannable ads

9. RECOMMENDATIONS
Embrace inclusive sizing and modest fashion
Be accessible to a diverse Group
9
Collaborate with niche streetwear brands
Personalize as well as customize

10. RECOMMENDATIONS
8 seconds
Gen Z attention Span Gen Y attention Span
The art of story telling
Be accessible to a diverse Group
Keep the audience engaged
10
Use key Gen Z influencers
Video content is the key
12 seconds

11. RECOMMENDATIONS • Commit to environment and social causes.
Be accessible to a diverse Group
Keep the audience engaged
Show that they care
11
• Organize campaigns and sustainable fashion walks.
• Go fur-free and use alternatives for leather etc.
12 seconds
• Introduce recyclable packaging and keep the supply chain
process transparent.

12. RECOMMENDATIONS • Fast and free
shipping, easy
store returns
Be accessible to a diverse Group
Keep the audience engaged
Show that they care
Boost digital and technological investment
12
• Provide virtual trial
room experience
using AI
• Chatbots using AI can
enhance customer
experience
12 seconds
• Implement Visual and
voice search

13. RECOMMENDATIONS
• Help consume sustainably
Be accessible to a diverse Group
Keep the audience engaged
Show that they care
Boost digital and technological investment
13
• Can reinforce the fight against counterfeiting
12 seconds
Resale service to reduce consumption
Counterfeiting is a big risk when it comes to luxury products

14. 14
Thank you for your time!