Luxury, more customers worldwide. And the richest 0.1% generate 37% of expenditure

The most important luxury customers, in fact, are asking for new and more careful ways of communication and involvement: less invasiveness and communication chaos, first of all, and more personalisation. 60%, for example, feel overwhelmed by excessive and impersonal marketing: on average, they actively interact with 57 brands and receive 40-50 communications per month. 80% want exclusive and intimate spaces, not standardised and crowded retail experiences. Ninety per cent consider product quality a must, a consideration that fuels strategies to strengthen craftsmanship and transparency along the supply chain. "Strengthening the luxury sector means returning to what made it extraordinary in the first place, especially for top-tier customers: deep connections, intimacy, quality and trust," noted Guia Ricci, managing director and partner at BCG. In this sense, a renewed centrality of the human relationship can be implemented and supported by artificial intelligence technologies.

Retail spaces also need to be rethought in the light of these considerations, as Bernstein's 'Reinventing Multi-Brand Retail' study underlined, focusing on the formula of multi-brand shops, which are at the centre of a challenging evolutionary phase, as opposed to single-brand shops. If the latter, as Luca Solca, Head of Global Luxury Goods at Bernstein, pointed out, have experienced an impetuous development over the last 15 years, multi-brand stores, both physical and digital, have often entered a crisis.

'The result is that consumer choice has been greatly reduced, as have the distribution channels available for smaller brands that do not have the strength to sustain a single-brand retail presence,' Solca emphasised. The Internet does not solve the problem, because while it is easy to find well-known brands, it is very difficult to discover something you do not know. The game to reinvent multi-brand clothing retail is open. There are the traditional players trying to improve the traditional 'department stores'' format: the new Seibu Ikebukuro shop is very interesting here, as is Maxwell's in the US. There are the mass fashion players - such as Inditex - that are successfully expanding into the premium segment. Finally, there are new players - internet giants like Google or Amazon - who are each in their own way looking for a way. The Amazon + Saks hybrid is very interesting. Without forgetting the big Chinese online mass marketers, such as Shein or Temu'.

The study also highlighted how the traditional formulas of department stores and multi-brand boutiques, both in the West and in Japan, are in structural difficulty, despite their presence in high-traffic locations. On the digital side, multi-brand online platforms have failed to build sustainable models: an example is Farfetch, which with its generalist marketplace has not built sustainable models for either retailers or brands.

However, even in this universe there are exceptions, with the successful cases of Sephora in cosmetics, EssilorLuxottica in eyewear and Level Shoes in footwear, hyper-specialised multi-brand models that have prospered thanks to strong economies of scale, consolidation and category expertise.

In the future, the study continues, the players that could shape the future of multi-brand retailing are established players with a specialisation in menswear; Japanese department stores with a new display approach; fast fashion retailers with potential to move up the bracket, such as Zara, Shein and Temu; web giants such as Google and ChatGPT; and hybrid physical-digital retailers (e.g. Saks, Rebag, Amazon).