What are luxury brands?

The luxury space is becoming overcrowded and brands incapable of adapting to emergent market forces will falter, according to a new report by the Luxury Institute.

The report outlines seven key trends that will dominant the luxury industry in the year ahead. For instance, the report argues that all the copycats striving to gain luxury credibility will succumb to slowing demand.

“There’s also a lot of ‘me-tooism, ’” he said. “When you have so many brands and so many copy cats, so much less originality, you’re going to get a race to the bottom and heavy discounting.

“The market is slowing down and there’s too much of a lot out there. A reality check is coming to the luxury industry: What are we expanding for?”

Less room
Luxury consumers are exasperated by all the “me-too” brands that have emerged in the past several years, according to the report, and many of these brands teetering on the edge of luxury will be washed away by dwindling demand.

To contend with shrinking growth, many brands will stop opening up stores. Instead, brands will focus on getting the most out of existing channels, which means placing a greater emphasize on CRM programs and cross-channel metric systems.