[HOTR] Luxury Sector: “The greatest disruption digital can bring is to enable the sector to reach a wider public”

By July 18, 2014
Carlos Ferreirinha

Luxury firms in Brazil are rather hesitant in making use of digital technology, but they would be able to raise their profiles if they were to adapt to the way the country’s population is changing.

Interview with Carlos Ferreirinha during the Hackers on the Runway event held on 1-2 July in Paris. A specialist in the luxury sector and premium brands in Latin America, he is the founder of MCF Consultoria, a luxury management consultancy

L’Atelier: You talk about Argentina being the former luxury hotspot in Latin America, but that it has now been deposed by Brazil. How do you explain this changing of the guard?

Carlos Ferreirinha: Argentina used to be the most sophisticated country in South America, partly due to the influence of the British and due to the fact that Argentine society had a very glamorous side to it. In the last decade however the Argentine economy has gone downhill fast, while the Brazil’s economy has made a lot of progress. Brazil is a much larger country than Argentina, but it remained a poor country for a long time. From the moment the economy started to turn around, the situation changed and the luxury business crossed the border and attacked the Brazilian market.

At your consultancy MCF Consultoria, you use luxury concepts as a management tool. How exactly do you do that?

Well of course we don’t work exclusively with companies in the luxury sector but we use the tools of luxury management to help other companies that have nothing to do with the luxury business. I’m talking about using the smart approach of luxury brands to obtain a better grasp of your market. This means taking the specific features of the luxury industry – such as exclusivity, excellence, personalisation, etc. – and injecting them into brands in other sectors.

What sort of relationship does luxury have with digital in Brazil? Do luxury brands make much use of digital technology and tools?

No, that’s not really the case in Brazil. The traditional luxury brands have been rather hesitant when it comes to digital. In general the major luxury brands have begun to incorporate digital into their strategies but mainly as an information tool. They produce beautiful websites but very few brands really interact with their customers, with the notable exception of Burberry, which is a very active brand and encourages dialogue with its customers.

Can digital help drive value creation in the luxury sector?

Nowadays digital is essential in all industries and even more so in the luxury business. It’s no longer a promise, it’s now a fact. In a country like Brazil where half the population is under 35, companies need to be aware that their customers and the future generations are steeped in the digital culture. So they need to be prepared and adapt to their customers.

What aspect of digital innovation could disrupt the luxury industry?

The great strength of luxury is being able to build a strong brand image, but the sector is not yet capable of selling to a wide market. So I think that the greatest disruption digital can bring is to enable the sector to reach a wider public.

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