By Amish Dargan
The definition of luxury has now become less to do with its high prices, the look, or its unlimited amenities. Now, luxury is better defined by how well the product reflects your personality and helps make it easy. It is about exclusivity and rarity, caught up with the current era, delivering experiences that make luxury worth the price. New trends are on a rise, and today, the whole world is about Artificial Intelligence, the next Internet, Block-chain, and the burning topic of discussion for the decade- Bitcoin. Here are effects that each of these trends have on the billion-dollar industry of luxury.
1. Artificial Intelligence
Organisations in other markets around the globe are coming up with automated systems, chat-bots, call-bots, and other such computer programs that allow customers to gain a better experience in customer servicing. When it comes to the luxury products, it is important for the brands to deliver the same experience online, as that of a showroom, for the price that they are charging. The approach for each customer must be tailored to that of a showroom. Simple chat-bots cannot provide that experience, and here is where artificial intelligence comes into play. The pioneers of the luxury industry have already started to invest in the same. The analyst firm, The Forrester, has not only identified an imminent rise of 300% in the investment in AI this year, but have also stated that 57% of the brands believe it to improve the customer experience in coming times.
The advent of Artificial Intelligence in the world has also given Luxury Homes a new meaning. They have evolved from being merely about expensive interiors and high-tech devices. Now, the basic tasks that you conduct in your homes are being handled by artificial intelligence. These tasks may at times be as simple as turning on the light to maintaining the perfect temperature. They even alert you automatically when there are issues with your home amenities. Technologies are being developed where the home automation systems detect your mood and create an environment best suited to improve it.
Artificial intelligence is not only the future in so far as sustaining the present luxury items are concerned- sure, it can heat your house before you step in, and everyone loves a good Ferrari which has doors that open upwards when they sense you. Artificial intelligence is moving and creating domains, including products of their own, that have rightfully taken their place in the luxury market.
Take for instance, the entire industry that revolves around augmented reality. Video games, movies, architecture, and many more such items have taken their place in the luxury industry. Augmented reality is a necessity in many sectors such as high class architectural facilities and universities, but for many, is still a luxury product. Video games is a great example for the same. Amazon, too, is opening up stores nationwide that require just a simple scan of your Amazon app to help you shop at their store, that requires no cashier's, and no payments after you're done shopping-you'll just be auto charged after you leave.
2. Blockchain Technology
Luxury Industry has always lured customers, both who can afford them, and those who cannot afford them. Over 2 trillion dollars worth of goods,with no history of purchases is forged/used to cheat upon customers in the luxury market. Since the potential buyer has no information nor awareness of the history of the product, he is at a stage where he is very likely to be cheated.
It leaves high-end customers with trust issues, even with the products being showcased in their official showrooms. To build a better level of trust in their customers, Luxury Brands have come up with a new solution- Blockchain Technology.
Blockchain Technology can be explained as a simple ledger that states all transactions being made of a product, which are available chronologically and publically. In the real world, with the advent of Blockchain Technology, a customer can check the good’s authenticity, history, source and check its real-time value. This eliminates the need for third party segregation which opens a window to fraud and forgery. It gives customers a new dimension by ensuring authenticity and security in purchases. Basically, anyone who buys something that involves a big amount, and is likely to be purchased in any form of currency apart from normal cash or cards, will go through the blockchain.
The diamond industry has already witnessed the advent of this technology, and results are turning out to be positive for it. Everledger is one of the many companies using Blockchain technology for over 1.5 million diamonds. Any potential buyer can check the history of the product they are interested in.
The Blockchain platform promises a faster and more secure supply chain to maximise customer confidence in the product. Security, transparency and sustainability is guaranteed to the customers using this technology.
3. Crypto currency
Bitcoin is no new topic of discussion for people around the globe. It has been out in the market for a while, and by the looks of it, is there to stay. It emerged as a way to make secure transactions anonymously, and was accepted by people on the deepweb as a payment method. Now, it has evolved from being a payment method, to a brilliant investment.
When it comes to the Luxury Industry, the popularity of Bitcoin being accepted as a payment method is notable. Luxury goods in the industry cost the customers a minimum of thousands of dollars, while they can go to millions. Traditional banking charges its customers a fee that is neither practical, nor is efficient for large sums. For instance, a transaction of $100,000 can cost the customers more than $4,000 in transaction fees. This number goes up if the sender settles large payments on regular basis. Of course, that is not the only thing that concerns the rich- tax officers banging on the door a few days later enquiring about the transaction and the source of income is also a great concern.
Transaction fees in Bitcoin depends on the number of transactions and not the amount. Hence, transactions worth millions cost the people $1 to $2. This opened up the market to the use of bitcoin. Even though prices fluctuate regularly, it does not affect the people as much as the bank transactions did. A lot of well known high end brands too, such as Microsoft, Expedia, and Virgin Galactic (a brand that promises to take normal citizens out into space in a few years), accept bitcoins as a form of currency.
The acceptance of Bitcoin in the market can be witnessed by the fact that a real estate developer sold an apartment complex worth over $220 million, accepting payments in bitcoin. A $2.3 million house in Middletown, New Jersey, is accepting bitcoin as a form of payment.There was a 300% increase in bitcoins in just one year, a majority of it untraceable, transactions for which happened in the dark web, are accountable for transactions worth BILLIONS for luxury items, such as branded watches, apparel, make up, and technology.
What do you think about the advent of these new technologies in the Luxury Industry? Let me know in the comments.