PER­SPEC­TIVE SIX DI­MEN­SIONS OF LUX­URY

Con­nect­ing with the next gen­er­a­tion of lux­ury con­sumers.

Neue Luxury - - Front Page - By Brett Phillips

THE CHANG­ING FACE OF LUX­URY

Since the be­gin­ning of this cen­tury lux­ury brands have re-de­fined how they com­mu­ni­cate and en­gage with their au­di­ences. Hav­ing long grap­pled with the chang­ing beliefs of their tra­di­tional cus­tomers, the emer­gence of a new and unique gen­er­a­tion of lux­ury con­sumers has changed the play­ing field en­tirely.

As the Mil­len­ni­als (born be­tween 1980 and 2000) start to make their dig­i­tal pres­ence felt, many lux­ury brands are re­defin­ing their strate­gies in or­der to stay rel­e­vant in the 21st cen­tury. In the late 1990s and early 2000s lux­ury brands grew ex­po­nen­tially, ben­e­fit­ing from an un­prece­dented in­crease in global wealth and the emer­gence of a mass class of wealthy con­sumers in the bur­geon­ing mar­kets of Asia, South Amer­ica, the Mid­dle East and Africa and in the tra­di­tional mar­kets of Europe and Amer­ica.

Dur­ing this pe­riod many lux­ury brands wres­tled with two com­pet­ing agen­das – how to pro­tect their ex­clu­siv­ity while in­creas­ing their ex­po­sure, ac­ces­si­bil­ity and con­sumer de­mand. What oc­curred in the re­sult­ing 10 years not only af­fected the very fab­ric of many lux­ury brands, but changed our un­der­stand­ing and re­la­tion­ship to lux­ury en­tirely. A new mass-wealthy class emerged and started to trade up to ac­quire oc­ca­sional lux­ury prod­ucts and ser­vices. Mean­while the tra­di­tional lux­ury con­sumer started to mix their lux­ury pur­chases with more ac­ces­si­ble arte­facts and ex­pe­ri­ences.

This phe­nom­e­non en­cour­aged many mass-brands to in­tro­duce pre­mium of­fer­ings while tra­di­tional lux­ury brands be­gan to in­tro­duce more af­ford­able and ac­ces­si­ble lines. The re­sult­ing ef­fect? A dif­fused un­der­stand­ing of lux­ury and a lux­ury land­scape that en­cour­aged the rise of masstige prod­ucts and con­sumers. The re­sult­ing para­dox saw many lux­ury brands be­come more im­por­tant than the prod­ucts and ser­vices that they pro­vided.

Prior to 2007 and the GFC, lux­ury brands sought expansion and in­creased mar­ket share through prod­uct di­ver­si­fi­ca­tion, pro­lif­er­a­tion and the nomen­cla­ture of sub-brands. We wit­nessed brands such as Ralph Lau­ren and Ar­mani broaden their con­sumer base via ac­ces­si­ble lux­u­ries such as sun­glasses, beauty and fra­grance of­fer­ings. Rather than fol­low the ex­ist­ing lux­ury pre­cur­sors of scarcity, ex­clu­siv­ity, crafts­man­ship and cost, the propo­si­tion shifted to­ward a focus on the value and virtues of the brands them­selves. The arte­fact it­self was no longer enough.

Since the GFC lux­ury brands have been forced to re­cal­i­brate, with the most suc­cess­ful re­fo­cus­ing prod­uct lines, con­sol­i­dat­ing costly and un­man­age­able li­cens­ing agree­ments, while re­assess­ing their tra­di­tional brand val­ues and beliefs. Burberry and Tom Ford are both no­table ex­am­ples of brands that have en­gi­neered a clear and com­pelling po­si­tion within mar­ket through a tightly con­trolled and cen­tralised ap­proach. While con­spic­u­ous con­sump­tion and ‘logo-buy­ing’ dom­i­nated the early 2000’s, the last few years have been wit­ness to the most tec­tonic shift in our un­der­stand­ing and re­la­tion­ship to lux­ury. En­ter the youngest, most so­cially con­scious, self aware and ad­ven­tur­ous lux­ury con­sumer to ever ex­ist. A con­sumer fo­cused on the fur­thest edges of lux­ury, seek­ing the niche, the icon­o­clas­tic, the new and the next.

THE MIL­LEN­NI­ALS As the en­gage­ment with lux­ury con­sumers evolves over time, so too does the di­ver­sity of the needs, be­hav­iours and char­ac­ter­is­tics that de­fine con­sumers pur­chas­ing rit­u­als and en­gage­ment with lux­ury.

Much has been writ­ten about the rise of the Mil­len­ni­als along with their pend­ing utopian like in­flu­ence on lux­ury mar­kets around the globe. As ap­pro­pri­ately cap­tured within Wealth Wave: The Mil­len­ni­als & Their Lux­ury As­pi­ra­tions, Danzinger metic­u­lously out­lines the pend­ing apoca­lypse when he states that Mil­len­ni­als “are set to be­come the largest con­sumer group in the world by 2020. When this oc­curs, this group will be aged be­tween 20-40 and will be en­ter­ing a new ‘win­dow of af­flu­ence’ that will res­onate for sev­eral decades.” Mil­len­ni­als may still be young but their dis­pos­able in­come

1 now al­lows them to en­gage with the oc­ca­sional lux­ury. They are ac­tively seek­ing to build their own iden­tity through the prod­ucts they pur­chase and the ex­pe­ri­ences they have.

Within their in­flu­en­tial trea­tise, The Lux­ury Strat­egy, Kapferer & Bastien per­haps best de­scribe how the con­flu­ence of beliefs, spend­ing power and lux­ury con­verge to cre­ate a per­fect lux­ury storm when they sug­gest that “The young iconize lux­ury brands for they epit­o­mize con­sump­tion at its best; lux­ury is a con­densed ver­sion of beauty, qual­ity, eter­nity, hu­man­ity, love, self-re­spect, impressing oth­ers, self pam­per­ing, self-re­ward, power, sym­bol­ism.”

2 While the Mil­len­ni­als are not yet con­sum­ing the same vol­ume of lux­ury as older gen­er­a­tions, they are cer­tainly de­vel­op­ing their habits and as­pi­ra­tions early. Many have grown up in an age where mul­ti­ple cars and yearly over­seas va­ca­tions are per­ceived as ev­ery­day ne­ces­si­ties. While much is still to be learnt about the nu­ances and patina of this in­flu­en­tial group, one thing is cer­tain – they are go­ing to be­have dif­fer­ently, per­ceive dif­fer­ently and con­sume dif­fer­ently to their par­ents.

FROM OB­JECTS OF DE­SIRE TO EX­TRA­OR­DI­NARY EX­PE­RI­ENCES. The rules for a lux­ury brand used to be rel­a­tively sim­ple. Be sub­tle, be ex­clu­sive, be sur­pris­ing and cre­ate de­sire. How­ever, with the rise of The Con­spic­u­ous Ac­quirer, the over-ex­po­sure of brands and the democrati­sa­tion of lux­ury, vol­ume con­sump­tion and brand iden­tity ero­sion has been the or­der of the day.

His­tor­i­cally, the lux­ury brand ex­pe­ri­ence only ever ad­dressed the con­sumer touch points lead­ing to pur­chase, with the ul­ti­mate goal be­ing to sell a given prod­uct or ser­vice. Ac­knowl­edg­ing the chang­ing at­ti­tudes of Neue Lux­ury con­sumers and their de­sire for self-ac­tu­al­i­sa­tion and self-ful­fill­ment, the cus­tomer jour­ney has now ex­panded to be far more cu­rated and far more en­dur­ing.

The pur­chase is now only the start­ing point of an ex­tra­or­di­nary life­long en­gage­ment for con­sumers who are seek­ing a greater emo­tional con­nec­tion with brands. The in­di­vid­ual con­sumer is now just as im­por­tant to the brand as the brand is to the con­sumer, with each con­tribut­ing to the canon­i­sa­tion of lux­ury. Within this con­text, the cus­tomer jour­ney has been re-en­gi­neered to cre­ate a stronger re­la­tion­ship be­tween the in­di­vid­ual and the brand.

SIX DI­MEN­SIONS OF LUX­URY In an en­vi­ron­ment of con­stant change, the emer­gence of new mar­kets and the pro­lif­er­a­tion of new so­cial chan­nels for en­gage­ment, it is tempt­ing for many lux­ury brands to al­ter their mar­ket­ing mes­sages or short-term di­rec­tion in or­der to at­tract new au­di­ences. How­ever, it is per­haps now more im­por­tant than ever to re­assess and eval­u­ate a brands vi­sion and clearly de­fine how it can cre­ate a sus­tain­able strate­gic ad­van­tage.

While every brand must de­fine, com­mu­ni­cate and demon­strate their unique val­ues, per­son­al­ity and char­ac­ter­is­tics, we be­lieve there are six vi­tal di­men­sions that all lux­ury brands need to con­sider in or­der to con­nect and en­gage with the next gen­er­a­tion of lux­ury con­sumers. By grad­ing how well the brand per­forms against these di­men­sions and com­par­ing the strate­gic out­comes against com­peti­tors, brand man­agers and own­ers can gain a fuller un­der­stand­ing of the rel­a­tive strengths, weak­nesses and op­por­tu­ni­ties for their brand, while bet­ter di­rect­ing strate­gic and tac­ti­cal ini­tia­tives.

1. AR­TI­SAN­SHIP In this com­modi­tised world, lux­ury con­sumers seek out brands, prod­ucts and ex­pe­ri­ences that are linked to the ar­ti­sans that have de­signed and crafted them. Whether it be the hand-stitched seam on a Bri­oni made-to-mea­sure suit or the beau­ti­ful im­per­fec­tion of a Rick Owens chair, we all re­spond to the hu­man con­nec­tion be­hind the prod­ucts and ser­vices we de­sire.

2. AU­THEN­TIC­ITY Lux­ury brands have roots just like hu­man be­ings have an­ces­tors. All suc­cess­ful lux­ury brands cel­e­brate a unique lin­eage and prove­nance. To be au­then­tic in this con­text, lux­ury has to be true, un­ques­tion­ing and in­nate.

3. TIME Time is the ul­ti­mate lux­ury. It is the only truly lim­ited re­source we have. As the pil­lars of ser­vice, qual­ity and ex­pe­ri­ence con­tinue to have an im­pact on a cus­tomer’s ad­vo­cacy for a brand, so too will a brand’s ac­knowl­edg­ment and man­age­ment of time. By un­der­stand­ing the value of time and its re­la­tion­ship to lux­ury, brands will bet­ter serve the needs of their cus­tomers by suc­cess­fully manag­ing each mo­ment of truth in the cus­tomer-brand re­la­tion­ship. This will ul­ti­mately give them greater con­trol over the real and per­ceived value of the lux­ury goods and ser­vices they pro­vide.

4. IN­DI­VID­U­AL­ISM A vi­tal in­gre­di­ent in the pro­jec­tion of a brand’s beliefs, vi­sion and val­ues are as­so­ci­a­tions with the icon­o­clasts of our age. Cel­e­brated for their com­mit­ment to cre­ation and in­no­va­tion, they also per­form a vi­tal func­tion in cul­ti­vat­ing fer­tile ground for their pa­tron’s de­vel­op­ment of self-im­age and self-ex­pres­sion.

5. CRE­ATIV­ITY In or­der to be cre­ative lead­ers, lux­ury brands must ex­plore and oc­cupy the nexus of de­sign, fash­ion, art and cul­ture. It is the abil­ity to con­stantly in­quire, dif­fer­en­ti­ate, sur­prise, cre­ate and stim­u­late de­sire that dis­tin­guishes a lux­ury brand.

6. THE EX­TRA­OR­DI­NARY Lux­ury brands must con­tin­u­ously strive to cre­ate and de­liver the ex­tra­or­di­nary. This takes courage, at­ten­tion to de­tail and an un­wa­ver­ing com­mit­ment to ex­cel­lence. Within the con­text of lux­ury, be­ing ex­tra­or­di­nary means over­com­ing the con­straints and lim­i­ta­tions of every day life, mov­ing be­yond the prag­mat­ics of func­tion and ra­tio­nal­ity and into the realms of emo­tion, aes­thet­ics, he­do­nism and the sa­cred.

BRANDS AS CUL­TURAL BAROMETERS Tra­di­tional mar­ket­ing strate­gies –– such as ar­ti­fi­cial celebrity or com­mer­cial en­dorse­ments –– are slowly giv­ing way to sub­tler forms of so­cial and cul­tural en­gage­ment. Lux­ury con­sumers are now look­ing at the fur­thest edges of lux­ury – seek­ing the niche, the new and the next. They want to share their knowl­edge with peers and en­gage with brands that re­flect their own deep and gen­uine en­gage­ment with fash­ion, de­sign, cul­ture and the arts.

The great in­flu­encers and icon­o­clasts of our time were born of this DNA, and one only has to look to those cur­rently at the helm of the great fash­ion houses for ev­i­dence of the chang­ing at­ti­tude to­ward lead­er­ship: Alexan­der Wang of Ba­len­ci­aga, Hedi Sli­mane of Saint Lau­rent, Raf Si­mons of Chris­tian Dior and Jeremy Scott of Moschino be­ing a few no­table ex­am­ples.

It is ev­i­dent that those lux­ury brands that have the ca­pac­ity to con­sol­i­date their mar­ket­ing and com­mu­ni­ca­tions strate­gies, mea­sure and grade their brand per­for­mance against the six di­men­sions of lux­ury while ac­com­mo­dat­ing a greater en­gage­ment with cul­ture, de­sign and art will not only ben­e­fit from an in­creased strata of lux­ury con­sumers, but will in­evitably dis­cover new and rel­e­vant ways to in­no­vate, con­nect and in­flu­ence the next gen­er­a­tion of lux­ury con­sumers. They will dis­cover what it means to be au­then­tic, and will, in turn, be viewed by their cus­tomers and pa­trons as cul­tural barometers and cus­to­di­ans of knowl­edge, in­tegrity and qual­ity.

Im­age 03. Ge­orges An­toni with 3 Deep for Har­rolds.

Im­age 06. Lucy Mcrae for Broached Com­mis­sions. Photo: Lucy Mcrae.

Foot­notes 1. Wealth Wave: The Mil­len­ni­als & Their Lux­ury As­pi­ra­tions, Danzinger, 2012. 2. The Lux­ury Strat­egy, Kapferer & Bastien, 2012. Im­ages

Im­age 01. Ma­te­ri­al­byprod­uct is ded­i­cated to in­no­vat­ing a sig­na­ture and sys­tem­atic lan­guage for mark­ing, cut­ting and join­ing cloth. Au­then­tic­ity in this con­text, is at the nexus of tra­di­tion and moder­nity.

Im­age 02. Phillip Adams, the Artis­tic Direc­tor of Phillip Adams Bal­letlab is an Aus­tralian icon­o­clast that cham­pi­ons free­dom of thought and the lux­ury of the imag­i­na­tion.

Im­age 03. Ex­tra­or­di­nary is about be­ing unique, with­out com­par­i­son or equal. Har­rolds Lux­ury Depart­ment Store em­braces the ex­tra­or­di­nary as a di­men­sion to project the brands beliefs, val­ues and vi­sion.

Im­age 04. Rick Owens fur­ni­ture em­braces di­men­sions of the ar­ti­sanal and ex­plores no­tions of the spir­i­tual, the rit­u­al­is­tic and the cer­e­mo­ni­ous.

Im­age 05. Dover Street Mar­ket is more than a mul­ti­level fash­ion re­tailer, it’s a cre­ative play­ground and cul­tural barom­e­ter that am­pli­fies the di­men­sion of cre­ativ­ity to carve out a unique and com­pet­i­tive po­si­tion.

Im­age 06. Broached Com­mis­sions are ex­em­plars of a brand that har­nesses, ma­nip­u­lates and em­bod­ies time. Not only within the his­toric frame­work of their in­ves­ti­ga­tion and the fab­ric of their ideas, but within the cer­e­mony of cus­tomer en­gage­ment, lim­ited edi­tion man­u­fac­tur­ing tech­niques and cu­ra­tion of ar­ti­sans and de­sign­ers.

Im­age 02. Jeff Busby with 3 Deep for Phillip Adams Bal­letlab. Dancer, Brook Stamp.

Im­age 04. Im­age 05.

Im­age 01. 3 Deep for Ma­te­ri­al­byprod­uct.

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