Everyone’s (us included) favourite buzzword: innovation. Even the most iconic luxury brands can get it wrong. Whether it’s too safe or trend-chasing, thoughtless innovation can devalue a brand to the point of no return. Ensure that doesn’t happen with our 4 principles for meaningful innovation.
Being timeless used to be the exact opposite of rocket science. If you had heritage, quality and craftsmanship, you were largely considered a luxury brand. Sadly or fortunately depending on your work ethic, that’s all changed.
Luxury customers are becoming younger and younger, the lines delineating what ‘counts’ as luxury are becoming increasingly blurred, preferences are shifting, competition for attention is rocketing and the widespread reliance on technology is deepening in anticipation for the web3 era.
In luxury fashion specifically, houses like Gucci, Louis Vuitton, Dolce & Gabbana, etc continue to be the obvious choices for commentators and consumers alike, but streetwear and athletic apparel brands like Off-White, Nike and Adidas are making solid cases to be considered amongst the former.
The category has proliferated. No longer gatekept by a handful of brands but rather open to anyone with the credentials to enter. Those being whatever the luxury customer dictates, but spans values like sustainability, ethical practices, a certain voice or message.
Achieving timelessness now requires constant innovation and forward-thinking. Luxury brands in particular should be designing the trends of tomorrow. And to do that effectively, they need to cover five imperatives:
- Appeal to new customer bases.
- Tap into changing attitudes.
- Experiment. Do the unexpected.
- Harness the power of technology.
- Do all of the above in a way that pushes society forward.
Innovation in the luxury sector has become a bit of a buzzword. It can come with negative connotations, purely due to overuse or misuse in context. But ultimately it’s what the high net worth are seeking out during their buying decision.
Defining Innovation’s Two Extremes
If you think of innovation as a wide spectrum, on one side we have small, low or no risk, incremental innovation, on the other we have big, flashy, arguably thoughtless forms of innovation. Unsurprisingly, truly innovative and lasting brands are somewhere in the middle, balancing the two extremes.
Let’s start with the former. An aversion to taking (calculated) risks causes incremental innovation with questionable benefits. This type conforms to overdone category codes, becoming a carbon copy of competitors and doing nothing to push the brand, the category or society forward. It’s safe (read: boring).
There’s an inherent tension between tradition and innovation, and often with long-standing luxury brands the values that once made them timeless (heritage, craftsmanship, quality, etc) are now the same ones obstructing them from pursuing bold and experimental ideas.
It’s an understandable challenge — how do you push a 300 year-old brand forward innovatively without fracturing the foundations you’ve built on or seemingly abandoning your core values?
The answer many brands choose to believe orbits around the other end of the spectrum — using innovation as an umbrella term and marketing tool, capturing anything that can be spun into a headline.
While the ambition is something ‘big’ and bold, the problem is often ill-defined and the solution involves throwing money at the latest trends and tech.
Put simply, it's a gimmick.
And when the headlines go away, brands are often left wondering what the real value was for business or consumer (or if there was ever any to begin with). The current rise of luxury brands fancying a frolic in the metaverse, simply to join the hype, is a prime example — high investment in so-called innovation with questionable value across the board.
Neither of these are optimal. And it’s not necessarily about having a balance between these two forms, it’s about adopting the right mentality. Moving from safe, category-conforming, boring and gimmicky, trend-chasing, damaging to meaningful innovation that’s exciting and distinctive, possessing crystal clear customer and business value and delivering progress in both the short- and long-term.
That’s not to make it sound easy. But here’s what not to do.
Debunking The Myths
Myth #1: Innovation ≠ Decoding the U/HNWI
The ultra high net worth individual/customer is not one person. The industry as a whole is very guilty of conflating the U/HNWI into a two-dimensional segment with a homogenous set of needs, wants, behaviours and aspirations.
Sharing a wealth bracket does not reconcile every other facet of personality into a singular persona and brands need to move away from this mindset and cease catering to generic trends.
Instead, find empathy with your specific audience.
Too much of current innovation is simply in response to current trends and what people say they want, meaningful innovation requires true empathy. Going beyond mere speculation, placing yourself in the context of your customer to really grasp how they act in situ.
‘If I would have asked people what they wanted, they would have said faster horses.’ – Henry Ford
We must understand the real customer journey — and our audience’s objectives, actions and emotions along it — and apply our imaginations to the points of friction and opportunity along it, envisioning how things could be in the future.
Myth #2: Innovation ≠ Venturing Deep into Your Vertical
Don’t narrow your thinking to become the best in your vertical, especially if you’re thinking in terms of product or service. Being the best (a wildly subjective superlative) is great, but not worth it when the cost is pigeonholing your brand.
Think in terms of brand and competencies.
What is your founding spirit? Your purpose? Your brand positioning? How might you innovate around these core brand elements? Your brand should inspire hundreds of new ideas and act as a guardrail to ensure all innovation ladders up to one cohesive core.
For competencies, ask yourself: What are your USPs? What new categories fit these competencies? Which of these do you have the credibility to play in?
If Dyson thought of themselves exclusively as a vacuum company, sure they’d be one of, if not the, most sought-after brand in that specific vertical. Ironically, they’d exist in a vacuum. But they don't.
Dyson champions themselves as a brand solely focused on efficient solutions with a core competency in air technology and that allows them to play in a vast variety of spaces, from vacuums to purifiers, hair care to headphones.
Dyson’s sell-out Supersonic™ hairdryer & Airwrap™ multi-styler, the most awarded hair tools of 2021.
In a similar vein, Tesla was exclusively automotive but took their purpose — to accelerate the transition to a sustainable future — and moved into energy and other scalable sustainable systems.
Myth #3: Innovation ≠ New Product/Service
Though it may be a crucial element, creating and incorporating new products and/or services doesn’t suffice as meaningful innovation.
A brand is the sum of all its interactions along the entire CX and meaningful innovation should take place in tandem rather than merely glueing newness on the end.
Often, ‘inventing’ new products goes beyond innovation into ‘invention’ territory. There are plenty of opportunities that don’t require significant R&D investment, many of which can be mined by mapping every interaction between brand and customer.
For brands with stores, there are countless moments in that overarching experience for innovation. From parking to collecting baskets or carts to selecting items to checkout and post-purchase, how can we make these moments swifter, easier and ultimately more valuable to the customer?
Farfetch’s Store of the Future. The rise of augmented retail.
It’s not just about the products on the shelves but how people move around the store, how they are interacted with, how they feel during checkout or when leaving the store, there are so many chances to innovate and imbue meaning and value just within this one touch point that don’t require a minute of new product development.
Because the best luxury brands are not just commodities to be bought and sold, they are exceptional, cohesive, end-to-end experiences that go beyond the core product/service in order to add meaningful value to customers’ lives.
Myth #4: Innovation ≠ Removing All Friction
A myth for most brands but especially those in the luxury sector. Healthy friction is a really crucial part of the luxury brand experience.
‘When you remove every ounce of friction in favour of conversion, you optimise things to death.’ – James Lees, Director of Strategy, Matter Of Form
Stripping CX of any kind of resistance in a race to conversion makes it feel empty, it feels insignificant, the brand story and ethos becomes lost and value dips.
Because luxury is not a commodity or utility space, the intangible — the ‘magic’ — is an inherent part of the value in a luxury brand purchase. And creating healthy friction is important to counteract things like the comedown of buyer’s remorse.
It might be through a lengthy (but not tedious) boxing or wrapping experience in-store. In hospitality, it might be a menu that tells the tale of the brand or the story of a signature wine or dish. Whatever touch point a brand wishes to enhance, meaningful innovation will add that healthy friction in a compelling way.
4 Principles for Meaningful Innovation
1. Go beyond ‘the’ UHNW customer to find true empathy with your audience.
2. Think in brand & competencies, not verticals.
3. Innovate along the entire customer journey.
4. Build healthy friction into the brand experience.
From brand development and experience design to product and service innovation, get in touch via [email protected] to become a brand who fashions the trends of tomorrow, pushes your category forward and delivers value in every interaction.