The concept of luxury is undergoing significant changes in the digital age, merging traditional ideas of exclusivity and craftsmanship with innovative digital experiences. Technology increasingly influences our daily lives as luxury brands increasingly apply digital tools to enhance the customer experience, reshaping the luxury markets and fundamentally altering how luxury is perceived, experienced, and consumed. Additionally, changing societal norms and consumer expectations require luxury brands to engage in new ways, such as through brand activism. This transformation impacts how luxury brands connect with consumers and deliver value.
Virtual contact points are increasingly replacing or supplementing human interactions, providing personalized and seamless experiences. Consumers can now display their luxury consumption on social media and explore and interact with luxury products through immersive virtual experiences, such as digital flagship stores, which blur the lines between physical and digital realms. Furthermore, digital technologies enable unprecedented levels of personalization.
As luxury services represent a rapidly growing sector, integrating service robots in luxury retail presents a complex landscape of opportunities and challenges. Robots can enhance efficiency and create novel customer experiences, but their integration into luxury settings may also threaten the human-centric approach despite that some luxury consumers prefer a strong human interaction and/or taking on an active role themselves. This situation presents a dilemma for luxury brands, particularly regarding how much they should substitute or augment human staff to provide the best customer experience.
Moreover, entirely new avenues for luxury consumption are emerging. Virtual real estate, for instance, has become a new opportunity for luxury investment and expression, with the market for virtual luxury goods projected to reach $50 billion by 2030. Digitalization can also empower consumers, for instance, the use of Blockchain can increase traceability, allowing consumers to follow the entire production process and supply chains of their products.
These examples illustrate how luxury consumption is undergoing fundamental changes in the digital era. At the same time, there are also risks involved, and some luxury brands deliberately limit their digital interactions to retain exclusivity. As luxury brands navigate these drastic changes, it is essential to understand consumer reactions toward these newly emerging forms of luxury. As luxury consumption becomes more widespread, understanding the impact this has on consumers becomes crucial, and the role technology plays in this context. A theory-driven approach is needed to thoroughly examine whether luxury consumption should be redefined in the digital age. Moreover, the discourse on the (in)compatibility of sustainability and luxury consumption must be adapted to the digital context, as new ethical and responsibility-related questions may arise.