The perception of luxury is undergoing a profound transformation driven by sustainability and technology

In its inaugural study focusing on the high-end sector, the auditing firm KPMG presents a report entitled “Savoir-faire and innovation: how does luxury continue to inspire?” To fully understand how the sector’s players perceive this profound transformation, KPMG conducted extensive surveys and interviews with experts and practitioners both in France and internationally. These valuable insights were further enriched by a detailed quantitative survey conducted in collaboration with the Institut Potloc, which collected responses from 200 representatives of small, medium and large luxury companies from Europe, the United States and Asia.

The study highlights several important trends that are shaping the future of luxury. Firstly, the digitalisation of the purchasing process has become a critical factor, particularly noted by 40% of respondents, with an even greater emphasis in the APAC region, at 65%. This trend underlines the growing importance of e-commerce and digital interaction in reaching luxury consumers. Secondly, personalisation of products and services is crucial for 22% of respondents, reflecting the growing demand for tailored and personalised luxury experiences. Thirdly, sustainability and ethical criteria are becoming increasingly important, with 21% of respondents considering them as key aspects of luxury purchases.

Furthermore, artificial intelligence (AI) has become indispensable for luxury brands, particularly to improve personalisation, both of products and of customer experiences, whether online or in-store. The report highlights the fundamental importance of generative AI, which is cited as an important factor in customer engagement within the luxury sector. For 41% of professionals surveyed, generative AI has the most significant impact, with the strongest conviction observed in Asian markets.

Sustainability and environmental, social and governance (ESG) principles are now considered top priorities at the highest levels of corporate decision-making. While 74% of respondents believe regulations related to ethical practices will have a moderate impact on their sourcing methods and working conditions, nearly 65% ​​anticipate moderate impacts from restrictions on certain raw materials, extractive practices and types of consumption, including fur, exotic skins and alcohol.

The emphasis on sustainability extends to the entire fashion ecosystem, seen primarily from a product perspective. “Sustainability is among the top three priorities for the sector, just behind product uniqueness and ahead of social responsibility,” the study notes. Notably, 41% of respondents maintain that “the quality and artisanal nature of products remain a priority.”

The luxury industry enters a new era

“This study shows that the luxury industry is entering a new era, marked by greater attention to environmental and biodiversity issues, as well as new perspectives on customer experience and engagement opened up by new technologies, in particular generative AI,” summarises Guillaume des Rotours, Head of Luxury at KPMG in France.

The authors of the study highlight the need to help smaller players finance the transition, particularly with regard to reducing the carbon footprint and preserving biodiversity. Throughout the product life cycle, “the innovations implemented by luxury players to achieve their sustainability objectives affect all stages of the value chain, from the procurement of raw materials to the end of the product's life,” they noted.

To best support this transition, talent management remains crucial. Identifying and attracting the right profiles with experience in technology and sustainability is essential. In addition, luxury houses must support the development of their employees' skills in emerging topics, while preserving and transmitting traditional know-how. For 41% of professionals surveyed, investing in continuing education programmes is a priority.