In the wake of COVID-19 and today’s uncertainty, luxury goods continue to experience some of their starkest challenges to date. BCG helps top luxury brand retailers move quickly to reset their presence and invest in digital solutions that sharpen operations and strengthen customer experiences.
BCG’s luxury goods consultants help clients to rightsize spending and prioritize digital and personalization efforts in both the front and back of the house—while still investing in long-term brand equity. Our work gives design-led luxury brands the ability to create the highest quality product, partner smarter in supply and distribution, digitally transform their businesses, and supercharge a new level of personalization across merchandising, marketing, and clienteling—in-store and beyond.
Decades of experience working with global brands and retailers in the fashion industry gives us a unique understanding of the pandemic-driven challenges facing this sector—and how to respond. In the industry’s key luxury market, for example, our unparalleled China-based team—with years of experience in the field—has remapped the Chinese luxury consumer journey, using its cultural knowledge to identify and quickly act on shifting behavior and trends.
As the light begins to appear at the end of the pandemic tunnel, companies still face an uncertain macroeconomic environment. That's why luxury brands need to continue to rethink what, when, and how they sell, recalibrating operations to meet a changed sales picture. The tradeoffs are not easy: luxury companies must emphasize efficiency and adapt to new sourcing and distribution constraints while making rapid investments in digital capabilities.
Our two-pronged approach—reset and invest—addresses both sides of this new reality.
Personalization and Clienteling 2.0. Working with a multibrand luxury retailer facing fierce competitive pressure, we undertook a personalization transformation that articulated a clear vision, and then we prepared and executed 60 pilots. Across stores and digital channels, we focused on next-level clienteling and customer experience, resulting in a net sales uplift of more than $40 million.
Large-Scale Transformation. We undertook a large-scale operating-model transformation for a global fashion and lifestyle brand that had just seen a three-year decline in revenue. First, we identified key opportunity areas, and then we worked across departments to develop an overall growth strategy. During the pandemic, we revised the strategy yet stayed on track to deliver second-quartile (up from bottom quartile) total shareholder return (TSR), $1.7 billion in prepandemic TSR value, more than $100 million in indirect procurement savings, and $200 million in corporate payroll cost savings over four years.
New Business Models. New business models, such as secondhand commerce and rental, continue to accelerate in luxury. We’re helping a number of brands and retailers think through the right operating model to use these new business models in a way that is economically viable, brand accretive, and drives new customer acquisition.
Sustainability. To overhaul the sustainability strategy for a high-profile luxury brand, we used BCG’s proprietary benchmark methodology to reveal key environmental and social-impact levers and areas for differentiation. Employing those insights, we crafted a strategy and end-to-end roadmap for execution within the organization and supply chain, including target setting, cost estimates, and corporate governance.
Digital Transformation. For a global luxury brand, we developed a holistic strategy across all digital channels—own.com, multibrand pure plays, department store.com, and social e-commerce—accounting for the range of journey touch points. The scope included building out the omnichannel experience and reviewing the client’s marketing technology stack to ensure that it supported newly introduced digitization and personalization.
Commercial Allocation by BCG X offers an integrated transformation experience. Leveraging BCG’s deep expertise and transformation capabilities, Commercial Allocation optimizes marketing and commercial budget allocation across salesforce and direct-to-consumer touchpoints.
After several challenging years, an analysis of the supply and demand fundamentals points to a positive outlook.
Our changing times and changing consumer attitudes are redefining “luxury,” pushing brands to rethink every aspect of their business.
Combined BCG and Vestiaire Collective research sheds light on the trends that matter most to consumers.
F&L companies can ensure access to key materials and components without raising costs or reducing responsiveness.
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Companies operating in today's Luxury industry must optimize performance, tap into new opportunities and transform to meet consumers demands. Follow BCG on Consumer on LinkedIn for the latest industry insights and news.
BCG’s luxury goods consultants and industry experts become your partners in setting new standards for operational excellence and marketing and creating unique experiences in luxury goods. Many of our luxury managing directors and partners have decades of experience working with fashion and luxury brands.
