Businesses that are digitally native flourish by using big data and analytics. However, conventional organisations are just now beginning to pay attention to big data and how it might be transformed into knowledge that improves company operations.

This article would explore the growing relevance of digital in the world of luxury and makes specific recommendations to help high-end firms manage the precious consumer data at their disposal more effectively.

Luxury businesses have a lot of data about their customers’ purchasing patterns accessible to them through purchase records, customer profiles, and exclusive memberships – all of which can be gathered and analysed to acquire and up/cross-sell to their consumers. However, luxury companies often underutilize this data. Additionally, the majority of luxury firms are ignorant of the significant influence that big data analytics may have on their company operations. Additionally, it has been argued that privileged buyers would be unwilling to pay a premium price for high-end items they cannot feel or touch before purchasing.


Millennials are reversing this trend. According to mOONshot digital and McKinsey & Company study, online luxury sales will more than quadruple to $86 billion by 2025, accounting for approximately one-fifth of all luxury transactions. Additionally, it was shown that at least 80% of all luxury purchases done today are impacted in some manner by the consumer’s online experience.

As such, it’s unsurprising that luxury digital pure-play firms are prospering and defining trends that are altering the luxury sector. Online sales of luxury products in high-end categories such as cosmetics, perfume, footwear, jewellery, watches, and leather goods currently account for 8% of the worldwide luxury market, which is worth $295 billion.

Net-A-Porter, for example, has shown that digital retail works and those luxury buyers are prepared to pay an undiscounted online price comparable to physical retail prices. In 2017, the store increased its revenues by 20%, to $2.61 billion.

The increasing relevance of digital in luxury is mostly due to the generational transition occurring in premium sales. Millennial and Generation Z customers now account for more than 30% of all luxury expenditure and accounted for 85% of global luxury growth in 2017. Digital-first stores like as Net-A-Porter, Farfetch, and others are fast displacing more established conventional companies – and big data is at the core of their success.

In the value chain, data is a gold mine.

Huge volumes of consumer data are being collected, analysed, and turned into usable insights using big data technology and methods. This data is divided into two types: structured and unstructured.

Purchase histories, exclusive memberships, and customer profiles including name, age, sex, income, etc. are all accessible to luxury companies and may be gathered and processed to promote sales. While this data is valuable, high-end brands often under-utilize it, ignoring vast amounts of unstructured data – like consumer comments on social media, affluent influencer photo feeds on Instagram and multi-channel customer journey engagements – that can now be mined to gain valuable insight into customer lifestyles.

Data are more numerous than ever, and the COVID-19 situation has heightened the need for data capabilities. The fashion and luxury brands that will emerge stronger from the crisis are using data to stay ahead of the curve.

Data-driven stock and store optimization raised sales by 10%. Increasing supply chain visibility has simplified inventory management, enhanced returns forecasting, and optimised transport networks, saving up to 15% on inventory expenditures. Most importantly, fashion brands that used data to customise e-commerce experiences saw 30- 50% increases in digital sales.

Creation of Customized Experiences

Luxury businesses can enhance and customise the consumer experience both online and offline by analysing data. So, Montblanc, a German luxury watch, leather goods, and writing instrument company, used video analytics to create heat maps that revealed where buyers spent the most time when shopping in-store. Using data to arrange product lines and salespeople effectively increased sales by 20%.

luxury business

Another British fashion business, Burberry, used social media to collect client data alongside conventional brick-and-mortar storefronts. To enhance sales, the firm also allowed consumers to digitally share their shopping preferences, experiences, and purchases so that when they visited an offline store, sales personnel could access this information in real-time through a tablet.

Burberry has redesigned its London flagship shop to be a digitally linked showcase similar to its website. Picking up an RFID-tagged item triggers an interactive film that illustrates how the item was manufactured and what additional things are available in the shop that complements it. Burberry can now construct client profiles based on clothing put on, allowing for more tailored shopping experiences in the future.


Burberry’s revenue grew 11% and retail sales grew 14% thanks to these and other digital efforts. Big data analytics helped the fashion firm map its market and pinpoint young clients’ sales potential. Burberry opted to revamp its marketing department and deploy a creative content media team since millennials are a tech-savvy age that spends a lot of time online. Internally, the corporation calls its website the “million square foot shop.”

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The importance of big data in luxury marketing

Being digitally aware is no longer a choice for luxury firms; it is a commercial must if they are to thrive. Luxury buyers want a premium experience throughout the purchasing process. Leveraging big data to give data-driven personalisation to clients has already been shown to help luxury firms expand their revenue streams.

Thus, the luxury industry’s moment has come to drive change and digitally transform its enterprises by embracing new technologies and developing in response to the wants of its wealthy clients.