The new rules of modern luxury
17 May 2017
A decade ago, the term “luxury” might have brought to mind images of celebrities toting the it bag of the season, flashy logos, five-stars hotels and stuffy boutiques. Today, those rules of what we understand as “luxury” have changed, dramatically.
The recession and digital revolution brought with them a new set of values and expectations. Luxury became less about buying branded things, more about the stories and experiences surrounding the brand. Where once the industry thrived on telling people what they needed to have, today it's all about understanding and adapting to what their customer wants.
A new generation of consumers is emerging. They’ve already influenced the rise of digital-first brands, the adoption of new technologies in the luxury space and challenged the traditional players in the industry. Here, we look at what the next generation wants from their luxury brands.
1. Authentic Narratives
Modern brands understand they must strive to relate to their audiences authentically and purposefully– which is especially true for the luxury market. While the luxury brands of yesteryear were built on images of unattainable wealth, today those who succeed invite the consumer to authentically participate with their brand’s values and principles.
In many ways, this makes luxury brands uniquely positioned to take advantage of today’s digital tools and platforms in ways that younger brands can’t. Especially bigger players are in a great position to utilise their budgets in order to tell stories creatively and ride the branded content wave, from the runway to websites, social media and partnerships.
Simply put: a story of heritage is something that cannot be manufactured, but it should be leveraged in the right way. Burberry have been the digital pioneers in the luxury space through merging heritage and innovation. Whether through a killer Instagram feed, an adapted brand voice or a tapping into different communities, even traditional brands will be expected to leverage digital storytelling in ways that authentically and consistently make their audiences care, time and time again.
2. The Beauty in the Craft
Craftsmanship and quality have always set luxury goods apart from the mainstream. In a world where things are no longer made to last– the environmental and social repercussions of which people are more conscious of than ever before – quality craftsmanship takes a special place.
With the internet at our fingertips, people are savvier and more knowledgeable than ever. This means the consumer is expected to get that little bit more information and detail into the know-how. Brands such as Thom Sweeney, the Savile Row tailors, Le Labo fragrances, Atelier Ally furniture and Craftie whiskey are some examples of modern brands built on craftsmanship. Today’s luxury consumer is willing to spend more for those instances where age-old craftsmanship meets new techniques.
3. Tailoring experiences
Personalisation has become a cornerstone of luxury – not necessarily through product, but through experience. While this is true for every brand and business, luxury brands will be expected to go the extra mile.
Rather than purchasing goods to define who they are, luxury has become more about collecting memories like merit badges. The more “bespoke” an experience is, the more likely a brand is to stand out and turn their customers are into their biggest advocates.
In the era of mobile technology and seamless customer service, people already expect to be at the center of each and every transaction with a brand. Whether through a bespoke offline retail concept or a personalised concierge service, modern luxury brands will keep striving to tailor and heighten personalisation in ways which surprise and delight.
Where was it made, by whom and in what conditions? During the decades of rampant globalisation, such questions were rarely asked. Today, ensuring more transparent supply chains and production cycles is becoming increasingly important worldwide.
This shift in responsible consumption goes hand-in-hand with a heightened consciousness toward environmental sustainability, which is no longer an option for luxury brands.
Young fashion luxury labels such as Everlane and Outdoor Voices have built immense appeal with Millennials through a foundation set in sustainability. They have set the tone by which future brands will need to live by if they want to stand the test of time and avoid growing criticism of unethical production within the fashion industry.
The socially-aware luxury consumer is looking to make more conscious purchasing decisions through voting with their wallet. Still, while the future of retail is looking more transparent, there’s a long and bumpy road ahead. As mainstream brands strive to tap into the trends of leveraging sustainability to sell product, consumers will become better at discerning authentic provenance from ‘greenwashing’. This is another instance where modern Modern luxury brands are uniquely positioned to lead the way.
5. Connected Digital
The traditional luxury market is finally overcoming its fear of going digital and embracing social media (CÉLINE only just made an Instagram account this year). Online platforms such as Farfetch, Net-A-Porter and Matchesonline.com have helped prove the case for luxury in the world of e-commerce (in fact, one in three luxury consumers in France, the home of luxury, shops regularly or exclusively online).
Where brands were once reluctant to jump on the ‘digital bandwagon’ for fear of losing integrity, this kind of excuse won’t work anymore– particularly when it comes to the Generation Z demographic, a future purchasing power that the traditional luxury market is struggling to tap into.
Modern luxury brands will need to the pioneers in their use of technology. They will leapfrog to adopt emerging technologies in clever and cunning ways. Rather than implement VR and AR for the sake of it, they will rise beyond the gimmick to use such technologies to immerse audiences with their values and solve new problems– particularly within the offline retail space. While examples of luxury brands who do this well are few and far between, both Tommy Hilfiger and Rebecca Minkoff have showcased innovative ways of connecting their offline and online experiences.
6. The Feel Good Factor
“Luxury” is arguably anything that makes us feel special. In recent years, we’ve seen this definition shift dramatically from “having” to “being”. What constitutes luxury has much more to do with spending money on things that contribute to make us feel great, inside and out.
We’ve seen this with the immense rise of the health and wellness luxury space. Luxury hotels such as The Lanesborough, for example, have started emphasising the quality of their facilities. Whether through a boutique fitness class, a yoga retreat or a juice cleanse, people are looking to spend on self-fulfillment over material possessions. Similarly, the luxury beauty industry has seen massive growth, but in more diverse ways that just traditional cosmetics. The sector has shifted much more toward natural products, skincare, salons and wellness treatments.
7. Experiential Retail
While traditional luxury brands claimed their status through paying extortionate rent on prime real estate strips worldwide, they are now suffering losses toward direct-to-consumer businesses that cut out the middleman and focus on customer experience. These same brands have also understood how to leverage the offline space to their advantage, leveraging pop-ups and multi-brand concept stores that go beyond one-style-fits-all boutiques.
More than ever, the offline space has become a place for modern luxury brands to reach new customer bases, engage them with their brand values and get them talking. Major luxury brands such as Louis Vuitton, Chanel and Hermes have all trialled pop-up stores in the last year, indicating a new direction for their physical retail in the future.
What constitutes “Luxury” is a malleable definition. It takes on new meanings across cohorts and cultures. When it comes the industry however, there seems to be a global shift in a positive direction: less consumerist appeal, more authenticity, more transparency and a better overall experience.
Words by: Lisa Roolant