Speaking at the 2015 edition of the FT Business of Luxury Summit in Monte Carlo, Johann Rupert, Executive Chairman of Richemont Group shared his views on the real dangers facing the luxury industry in the future. One of Mr Ruper’s key insights was that e-commerce is going to be overshadowed by artificial intelligence which would likely create an abundance, leading to a bigger wave of unemployment.
‘Our threat is not this immediate technology but how we are going to organize this abundance. It will be crucial how society is going to cope with the future structural unemployment, because they people will be unemployable’ said Rupert. ‘ There will be a lack of jobs in the future… A hairdresser, a florist will keep they jobs, but a doctor? – I am not so sure, especially considering the artificial intelligence. It is not obvious which type of jobs will survive.
Rupert insisted that, in this future context, rich people will not want to show their wealth so they might refrain from purchasing luxury goods. ‘We are in for a a huge change in society. We are aware of it and we are preparing for it’ added Rupert. Maintaining desirability and brand equity will likely ensure pricing power.
Talking about Apple, Rupert expressed confidence in its future success. By comparison, he stressed the key differentiating factors for luxury would be maintaining the DNA of the brand and ensuring timelessness. To illustrate his vision, Rupert compared an Iphone which people will enventually throw away once a new model is launched while a Cartier product will never be thrown away. ‘On a special anniversary, I am not sure whether which will be more appreciate – a Cartier or a Bvlgari watch versus an Apple watch.’ Rupert said, adding ‘It is also a matter of an long term investment…just look at the luxury products sold at the auction houses’
On the fluctuations of the Chinese market, Mr Rupert appeared reassured, expressing his confidence in its future potential. He reckoned that the crack down laws on gifting will not stop the wealthy Chinese to buy luxury. Mr Ruper characterized the Chinese as smart shoppers whether they may be shopping in Paris, London or in Japan, seizing on the best offerings. ‘Chinese consumers are smart, they save, they work like hell and there are more men than women in China, which means they have to remain very generous to women’ said Mr Rupert.
‘Luxury must be individual! It is about style, design and creativity.’ This led Mr Ruper to speak about the crucial need to identify and train artisans. ‘At Richemont, we want to create a platform for artisans. We are already talking to several governments’ said Mr Rupert, mentioning the increased role which will be given to the “Fondazione Cologni per i Mestieri d’Arte”.
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