The future of luxury … How can luxury brands capture the new luxuries of time, individuality, authenticity, belonging and experiences?
May 18, 2017
Luxury, as defined by the Oxford dictionary, used to be “a state of great comfort or elegance, especially when involving great expense.”
Today’s luxuries are no less scarce, but more emotional than physical, and they don’t necessarily come at great expense.
A more recent definition from Webster’s says “Luxury is the unusual intellectual or emotional pleasure or comfort derived from some specific thing, something producing such pleasure or comfort, and of course, the use and enjoyment of the best and the most costly things that offer the most physical comfort and satisfaction.”
In a world of abundance, where material possessions are no longer a measure of success, and the tech-fuelled pressures of work and life, give us few moments to be ourselves, the concept of luxury has changed. Luxury is more a state of mind, more an emotional than physical concept, more an experience than an object, and capturing the most valuable aspirations of people today.
Luxury brands – from Cartier to Louis Vuitton, Gucci to Moet & Chandon – are struggling to come to terms with this changing mindset. So what are the drivers of change?
- New consumers… China will be the world’s largest luxury goods market by 2020, with different aspirations and values. India and Indonesia follow rapidly. Like in the new western markets, people with self-made wealth have different values to those with an inherited starting point. Luxury is still an important psychological marker of social progress, moving from extrovert to introvert adoption.
- New aspirations … Consumers have dreams conditioned by every walk of life, conditioned across many different sectors – their favourite restaurant, vacation, celebrity – and as a result, their choices are more diverse. They don’t trust institutions or worship heroes, rather they are influenced by their peers, and their value equation is much more than product and price.
- New technologies … Digital platforms have transformed the accessibility of luxury brands, both in exposure and ability to purchase. Gone are the days when a luxury boutique was the embodiment of the dream, the living brand, and unique purchase experience. Luxury brand experiences are most likely to start with a mobile phone … content-rich, co-creating, community-building, and more.
Indeed the luxury brands of today could vary greatly from those classic names. Apple fulfils the criteria for many, particularly in the democratising world of “massclusivity”. Airbnb offers amazing places to stay, often preferable to the predictable chintz of chain hotels. Nespresso creates the best coffee, embodied by George Clooney’s style, and captured in a capsule of great taste in your home. Tesla offers speed with a conscience, more progressive, less polluting and faster than a Ferrari.
So what is the new luxury … and how can luxury brands, classic and new, embrace the new traits of luxury as perceived by today’s consumers? How are they valued, and what do they look like?
- The luxury of time … How can you create precious time for people, time when you are alone, or with the people who matter most, the special moments, captured in time? Surfair’s new executive jet service launched across Europe ($2500 per month unlimited travel) saves you time, but also creates special time to enjoy, or precious time to do more.
- The luxury of individuality … Exclusivity is not just a brand, but the ability to personalise it, to make it more distinctive and relevant. Coach’s new leather workshops within flagship stores go beyond adding your name to a handbag, but co-designing the bag with craftsmen – size and shape, colour and stitching. The achievement is not just in ownership, but in your own creativity too.
- The luxury of authenticity … Authentic is not just a heritage, selling the story of your past and your craft, or avoiding counterfeits on eBay or imitations by H&M. It is also about being real. Luxury Brands were one of the slowest to embrace sustainability – from ethical materials to labour practices. Authentic is also about being human, local, genuine, trustworthy and responsible.
- The luxury of belonging … In a world without border, where people move across geographies, and have little connection to their locality, we need new ways to belong. Belonging is about shared values and aspirations, and brands beyond their products can capture these. Bringing people together, with same camaraderie of VW Beetle drivers, but in a relevant luxury branded context.
- The luxury of experiences … Whilst experiences might be extreme, like parachute jumps and spiritual retreats, they can equally be educational or about wellbeing. Starbucks will take you trekking across Peruvian jungles in search of the best coffee, Donna Karan’s Urban Zen retreats in NYC are an antidote to the fast lifestyles which most fashion brands induce.
Burberry is a great example of a luxury brand responding to this new world. CEO Angela Ahrendts and her team tripled the business performance, in revenue and profit, over a 5 year period, making millennials and China became their new passion. The brand had lost its way, outdated and increasingly ubiquitous. Burberry embraced digital technologies in every aspect of their transformation. Their innovations were less about products, and far more about how people engaged with the brand, the sales experience and beyond it. They uses icons and symbols to redefine the meaning of Burberry, and how it is luxurious.
Ahrendts, now at Apple, made the trench coat her brand’s icon. Focusing on “the art of the trench”, how it can be worn in infinite ways, occasions and for different audiences. Product customisation, digital applications, and social media were all key components. Flagship stores were transformed with LCD screens, with movies and fashion show livestreaming, engaging communities in realtime dreams and purchase. Magic mirrors that change your clothes as you stand and watch, or curate selections for you, share with friends for approval, or save for later on your phone. And much more. And then campaigns like Burberry Kisses, harnessing the power of occasions to engage people more deeply, so that the brand does more beyond the product, relevant and enabling.
Read my blog post: Luxury brands must innovate to engage new consumers
Other brands who are seeking to capture this new luxury, in distinctive ways, include Shang Xia, the Hermes-owned Chinese brand. It has even been called the first superbrand from the East. It captures the authenticity of traditional Chinese art and culture, manifest in fashion and lifestyle accessories. This brand is less about digital, and more about culture. Stepping into Shang Xia’s Paris boutique, is like entering a different world.
Jean-Claude Biver is a timeless piece of the Swiss watchmaking industry. But he advocates revolution in his watches, personified by the yin-yang designs of Hublot watches. He combines modern art with classic craftsmanship, new synthetic materials with precious metals, and irreverent advertising with a classic brand heritage. Not everybody loves Hublot, but then that’s the point of a brand – to have an attitude, to have an opinion, and sometimes to polarise people.
Read my blog post: The man who saved the luxury Swiss watch industry
1Atelier is reinventing bespoke luxury accessories for the 21st century, helping consumers to create exquisitely handcrafted handbags, and more. The NYC startup is redefining bespoke fashion for the digital age, combining old-fashioned craftsmanship and modern technology in ways that could signal the future of customisation. 1Atelier enables consumers to design and receive their perfect bag within 21 days.
Read my case study: 1Atelier, where personalisation becomes the new luxury
Start-ups are embracing digital technologies in luxury ways too. LVMH for example successfully run an innovation competition each year, the winning businesses being embraced by LVMH Labs, an incubator, with the ability to leverage the start-up IP into the core business, and for the start-up to leverage the expertise and scale of LVMH. Other fast-growing digital luxury brands like Vinaya, led by the fabulous Kate Unsworth, are creating their own space in the market. For Vitaya, this is about focusing trends like wellbeing, and creating a luxury version of the fitness trackers and other devices.
Read my case study: The millennial entrepreneur who thinks human first, tech second
“The Future of Luxury” is the theme of my new keynote, one-day workshop and fast and practical consulting process. In it, we explore the changing world of luxury, combining the best insights and ideas from the outside world, with the heritage and vision of your own business. Future vision, design thinking, horizon planning, brand reframing, lean innovation, concept generation, platform marketing, social influence, and much more. It is about thinking in a creative way about how to embrace the power of luxury brands in this new context, to win with the new audiences, new aspirations and new technological possibilities.
- Example of a client workshop: Innovation of the Cartier brand
- Download a summary: Innovation. Creating the future of luxury
- Find out more by emailing me at firstname.lastname@example.org
Other relevant links
- Article: The New Luxury: How can luxury brands win in the new world?
- Blog post: The Leica story, from humble heritage to luxury brand
- Blog post: Design thinking with Fortnum and Mason, the beautiful reinvention of a British retail icon
- Case study: 77 Diamonds, diamonds are the the real thing, even for online retailers
- Case study: Positive Luxury, the butterfly mark of brands you can trust