The global luxury goods market has boomed over the past two decades, reaching €224bn in annual revenue, and the number of luxury consumers has surged from 140m worldwide to more than 350m.
At the same time, there is growing demand for luxury management programs. Many business school students want to work at prestigious luxury brands such as LVHM, Kering, Swatch Group and Richemont, whose products are more tangible than services.
As the luxury business becomes more global, with growth in sales powered increasingly by Chinese consumers, who make up more than 30 percent of luxury spending, Online MBA programs are paying closer attention to the sector.
But shares in luxury goods companies have suffered in recent years following a fall in luxury sales in China, a trend amplified by the Covid shutdown that hit luxury stores in China as well as the supply chains of western luxury brands.
In the UK, Warwick Business School, which is home to a longstanding Online MBA program, offers courses on luxury management to its online students. “We examine the dominance of western luxury brands and whether that will continue with the rise of China,” says Qing Wang, professor of marketing and innovation at WBS.
“The globalization of luxury is also presenting problems for brands and potentially undermining their authenticity, especially as different cultures tend to interpret the value and meaning of brands differently,” she adds. “How are brands changing their business models for emerging markets?” It is a question explored on Warwick’s luxury courses.
Where to study an Online MBA in Luxury?
Many of the top luxury management programs are offered in fashion centers such as London, Paris, Milan or New York. A number of schools run Online MBA tracks in luxury goods. Others offer blended online and offline courses such as the luxury elective in the Executive MBA at HEC Paris. However, a big perk for luxury-focused students will be the residential periods in the heart of the French capital.
Many schools partner with local luxury brands, bringing in executives to teach students or sending students on work placements or consulting projects. MIP Politecnico di Milano School of Management, in the heart of Milan, runs a partnership with a leading Italian fashion house, Prada.
Schools increasingly also sense the need to give students an education on digital sales and marketing channels. The travel restrictions and social-distancing rules forced fashion houses to rethink their traditional models and move into the digital realm.
Millennials and sustainability: Emerging topics for luxury firms
A generational shift has powered the trend. Millennials – those born between 1980 and 2000 – have grown up in the digital world and are now entering their peak spending age, but research and surveys have found they are not as materialistic as their parents, and are not as interested in buying luxury goods.
“The millennials were born and have grown up in the internet age,” says Warwick’s Wang. “They have big spending power, but they are not attracted to the traditional luxury model.”
A huge theme in the fashion world is sustainability, so it’s finding its way increasingly into the Online MBA tracks. The Boston Consulting Group found that the sector’s progress on everything from carbon reduction to ensuring living wages for workers was 30 percent slower in 2019 than the year before. And the sector’s rapid growth has actually worsened its impact on the planet.
“Sustainability is no longer a trend, as luxury customers are demanding transparency, more ethical practices, tangible steps toward carbon-neutrality, and circular economy business models,” says Alessandro Brun, professor of luxury management at Politecnico di Milano.
Brun says the job prospects have improved markedly in the luxury world, even for those who are transitioning from other business sectors. “The luxury sector that I studied was characterized by a number of companies still reluctant to hire people without specific experience in the industry,” he says. “It was a very self-referential industry, a members-only club. This luckily changed rapidly.”
He says that for Online MBA students wanting a challenge, they should consider pursuing a career in luxury management. “To me, it is the most beautiful, engaging and challenging industry in the world,” says Brun. “It’s rapidly growing, hiring the best talents, and is a cultural melting pot where artistic creativity and managerial shrewdness can live together in perfect harmony.”
Luxury managers are also having to serve the most demanding customers in the world, he says. “It’s a career path that would certainly include collaborations between the luxury business and other sectors, one which will have sustainability at the core of managerial practices, and be digital and multichannel, with blockchain, big data analytics, the ‘metaverse’ and non-fungible tokens (NFT)s.”