Lux­ury Is In Tran­si­tion

Forbes Middle East - - CONTENTS - BY Jas­min We­ber

The word lux­ury has changed im­mensely over the last few decades. We have ob­served the di­ver­si­fi­ca­tion of the con­cept of lux­ury for a long time—whether that means the per­sonal ex­pe­ri­ence, the own­er­ship, the pur­chase or the in­vest­ment in a lux­ury prod­uct. The idea of valu­ing and en­joy­ing the present mo­ment is ex­pe­ri­enc­ing a re­vival. This is ush­er­ing in a rev­o­lu­tion­ary par­a­digm shift, not only in the tra­di­tional branch of lux­ury, but also in other market seg­ments, lead­ing to a new un­der­stand­ing of the con­cept of lux­ury some­where be­tween ex­clu­siv­ity and mass ac­ces­si­bil­ity.

To­day, we have the phe­nom­e­non of stealth lux­ury: a lux­ury be­hav­ior de­fined more by ex­cel­lent work­man­ship and qual­i­ties only vis­i­ble to con­nois­seurs, rather than ob­vi­ous char­ac­ter­is­tics like de­signer lo­gos. Prod­ucts with sto­ries and prag­matic value add to their mean­ing as lux­ury goods, while shine and glam­our have qui­etly moved into the back­ground. Peace, mind­ful­ness and free­dom are the new touch­stones of es­tab­lished lux­ury con­sumers.

Pos­i­tive market de­vel­op­ment has been in­spired by, among other things, a grow­ing world­wide pop­u­la­tion of ultra-high net worth in­di­vid­u­als (UHNWIs). With mil­len­ni­als and gen­er­a­tion z, we are see­ing gen­er­a­tions that not only have high stan­dards, but also have high in­comes and are ea­ger to con­sume. That dif­fer­en­ti­ated at­ti­tude to­ward lux­ury con­sump­tion is caus­ing a lot of move­ment in the in­dus­try, and the dif­fer­ent market seg­ments are prof­it­ing to vary­ing de­grees.

In the com­ing years, they will break through the pre­vi­ous buy­ing pat­terns and market strate­gies that have de­fined the in­ter­ac­tion be­tween cus­tomers, pro­duc­ers and ser­vice providers. As a re­sult, lux­ury will be­come the self­ap­pointed “anti-value” against the ac­cel­er­a­tion of ev­ery­day life, ra­tio­nal­ity, mul­ti­ple op­tions, ef­fi­cient think­ing and fu­ture plan­ning. Four driv­ers are point­ing the way to­ward this de­vel­op­ment: the de­moc­ra­ti­za­tion of lux­ury mar­kets; the in­di­vid­u­al­iza­tion of prod­ucts and ser­vices; global, rapidly grow­ing and spread­ing dig­i­tal­iza­tion; and gen­er­a­tion al­pha—the next gen­er­a­tion.

In­tel­li­gent lux­ury think­ing has also reached the fash­ion in­dus­try. The trend is mov­ing to­ward a de­cel­er­at­ing slow fash­ion in which just a few, but very valu­able ar­ti­cles of cloth­ing are pro­duced. The em­pha­sis on cre­ative de­signs com­bined with the most mod­ern and ve­gan ma­te­ri­als, as well as a trace­able pro­duc­tion chain, reached its de­mand­ing tar­get group a long time ago.

New “phy­gi­tal” sales mod­els will be de­ci­sive and pur­chases will con­tinue to take place in phys­i­cal stores: Cus­tomers ap­pre­ci­ate the con­fi­dence they get from the phys­i­cal ex­pe­ri­ence of a lux­ury prod­uct. Lux­ury brands have to guar­an­tee, how­ever, suf­fi­cient dig­i­tal avail­abil­ity and not sim­ply dig­i­tally an­i­mate the in-store ex­pe­ri­ence. In the past, cau­tious de­mand reg­u­lated the of­fer­ings. Gen­er­a­tion z and now gen­er­a­tion al­pha will give these trends the quick boost they need. In par­tic­u­lar, so­cial me­dia chan­nels and con­stant ac­cess to in­ter­na­tional in­flu­encers and blog­gers are de­ci­sive for the cur­rent lux­ury con­sumerism and ac­cess to the world of the UHNWI.

Mean­while, young and in­ter­na­tional in­flu­encers are be­ing flown in for world­wide events. It's pure lux­ury— whether it's a prod­uct, a ser­vice, a flight on a pri­vate jet, cham­pagne and caviar all around—and stim­u­lates so­cial me­dia chan­nels through emo­tion and sug­ges­tion. They are the defin­ing in­flu­encers for a whole gen­er­a­tion and make the con­sump­tion of lux­ury goods more ef­fec­tive on a broad scale. Younger so­cial classes can af­ford cer­tain lux­u­ries and are re­defin­ing this ex­clu­sive world. The in­creas­ing need for con­nec­tiv­ity from lux­ury goods is chang­ing the en­tire of­fer­ing of prod­ucts and ser­vices.

Dig­i­tal­iza­tion has ir­re­vo­ca­bly changed the global econ­omy. A new par­a­digm of lux­ury con­sump­tion has arisen along with the way busi­ness is done. Gen­er­a­tion al­pha will be the first gen­er­a­tion to com­pletely grow up in the 21st cen­tury, and as a re­sult, be the best ed­u­cated and wealth­i­est gen­er­a­tion.

They will move seam­lessly be­tween prod­ucts, styles and in­ter­ests, and en­ter into ca­sual con­nec­tions with dif­fer­ent so­cial and cul­tural groups. Al­ready in the early years, the ap­pro­pri­a­tion of clus­ter­ing be­hav­ior pat­terns and ac­cess to the mul­ti­di­men­sion­al­ity of tech­nol­ogy, ser­vice and (lux­ury) prod­ucts will be pos­si­ble ev­ery­where.

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