Luxury Brands are known for their impeccable quality and taste. The brand says something about the user and the brand maintains its stature among those who like the finer things in life. Some brands face risks when cheaper alternatives are available and consumer trends change. There are three risks that luxury brands will face in the market this year.
1.) Encroachment of high quality alternatives. There is always a debate between a luxury brand and a cheaper alternative. Quality is improving in many products that are similar to the luxury brands. High quality brands will need to do a better job of formulating a solid image of why their product is best.
2.) Segmentation of the market. It won't be easy to reach and advertise to one type of customer. There are different types and kinds of customers that exist in a segmented market. Each may have their own preferred channel and marketers will need to reach them in new ways.
3.) Changing technology and needs. New technology is supplanting older technology. It offers opportunities for new brands to develop but also runs the risk of killing off older companies that haven't changed. Some brands may fall out of style as companies come up with the latest and greatest.