Digital Technology in Luxury Industry Development

The article deals with the peculiarities of the application of digital technology in the luxury industry, which, faced with the challenges of the COVID-19 pandemic, has entered an active phase of digitalisation. Increased attention of this industry companies to a number of digital technologies (me-tovelenium, NFT, blockchain, AR, VR, smart contracts) is associated with the exclusion and scarcity of the latter, which corresponds to the nature of luxe goods. The luxury industry firms are building sustainable competitive advantages based on the implementation of innovative solutions in production, materials used, digital marketing, online distribution channels. Social networks, personalisation, the need to meet the needs of modern consumers who are increasingly aware of digital innovation, the “green agenda” and the transition to a circular economy are leading the way for digitalisation in the sector. The potential of digital technology for the luxury industry is significant, but it also directly or indirectly determines the range of problems, some of which are discussed in this article. The results of this study show that some of the digital technologies are able to solve the problems outlined. The paper presents the process of digital transformation of the luxury industry based on the development of competitive advantages, determined by the specifics of the industry, external and internal environment factors, strategies and operational models of digitalization of companies, solving key problems associated with digitalization.