Advertisement

  • News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
BW Businessworld

The New Frontiers Of Luxury

The one fundamental truth that remains unchanged however is that ‘luxury at its heart has always been and continues to remain all about status'

Photo Credit : Ritesh Sharma

1537876483_JkVq8a_column_ABHAY_GUPTA_RS_470.jpg

Luxury, a hitherto ‘reserved for the elite’ phenomenon, has been undergoing a titanic shift in its core perception, mainly due to market-driven forces causing a deviation from ‘reserved for the classes’ to ‘appeal for the masses’. The democratisation process initiated sometime in the 1970s saw a major change when luxury brands started to spiral downwards with brand / product extensions allowing them to cater to what is now called the ‘accessible luxury’ space. The ideology was to target the fast-growing new money economy in emerging markets where aspirations of announcing ‘one’s arrival’ was the key driver for luxury purchase.

However, with the advent of the millennial consumer (or Gen Y) in the early eighties, the consumer behaviour has steadily and drastically deviated from the previously defined norms of luxury. The centennial Gen Z (or digital natives) are further seeking change necessitating luxury brands to take notice, innovate and offer products and services to suit their preferences.

“Millennial (Gen Y) and Gen Z consumers are proving to be the main growth engine in the luxury market, accounting for 30 per cent of luxury sales, yet fuelling a massive 85 per cent of all growth in 2017. But the younger generations are also reshaping what “luxury” is, thereby what luxury brands need to do to appeal to them,” according to Bain & Co.

A few of the trends shaping the new luxury are as follows:

Being over Having: The new luxury consumer favours an ‘experience over ownership’. They truly believe in the YOLO (you only live once) theory and focus more on experiences rather than big-ticket product purchases.

Personalisation & Customisation: Major expenditure shift is being diverted towards customisation. Be it products, services, holidays, homes, experiences, content and or travel. Rising popularity of reality shows, Netflix-like web series, speciality restaurants, designer residences, bespoke clothing, footwear, cars and even weddings is growing evidence of such a phenomenon.

Sharing over Owning: The sharing economy has never had it better. Luxury brands and products have had to struggle to keep pace with this growing phenomenon to avoid being sidelined. Why buy anything when you could share or rent an Uber, a wedding dress, a fully furnished apartment, a luxury sofa, and movies to even companions that would suit your mood / need / temperaments.

Refurbished Luxury: For those who wish to have the feeling of their own ownership, reusable luxury has become an acceptable norm of the day. From just cars, this trend has now graduated to dresses, bags, accessories, home products and appliances, etc. Special websites have sprung up as aggregators, curators, re-furbishers who on one side assist a bored owner to help liquidate and make space for a new purchase, while at the same time help another aspirant indulge in affordable high-end luxury.

Green is the New Black: Sustainability, environmental friendly, compassion for other living beings is forcing luxury brands to go back to their innovation boards. Lab-grown diamonds, artificial furs, scientifically curated leather, sustainable building materials, energy efficient homes, solar powered lights, etc are slowly but surely replacing animal skins, fox furs, mined diamonds, traditional building materials and energy guzzler appliances.

Craft over Brand: No longer can a luxury brand sell itself by pure brand appeal. While branding plays its own role and is crucially important, the young ones question the necessity of paying extra just for the brand value. The craftsman, detailed crafting, rare techniques, handmade, uniquely rare creations that emit emotions, story and feelings is the order of the day.

The Future of Luxury Fashion: While leather goods have always been a benchmark of the beta luxury consumer, the availability of top quality leather being scarce, luxury brands are finding ‘fishy alternatives’. For their collections and fashion shows, John Galliano, Prada, Christian Dior, Louis Vuitton and Salvatore Ferragamo are all sourcing fish skin at premium prices from Atlantic Leather, a UK-based fish skin specialist company.

Street Fashion is Now Luxury: For luxury fashion houses, there’s a new ultimatum as they look to win over a younger set of customers — find a way or risk irrelevancy. The relaxed, casual stance of the millennial is now invading the boardrooms. Hoody style shirts, baggy pants and oversize clothing is being offered by all luxury brands. A trend initiated by Louis Vuitton and Virgil Abloh via Supreme is being taken on by the new-look Burberry, thanks to Riccardo Tisci. “Gucci did it. Yves Saint Laurent did it. Givenchy did it. These designers — Alessandro Michele, Hedi Slimane, Riccardo Tisci, Demna, Virgil — they’re all turning the definition of luxury on its head,” said Yu-Ming Wu, Co-founder of Sneaker Con and Founder of Sneaker News, a street wear specialist reporting portal. “These designers are turning the definition of luxury on its head.”

Sneakerisation of Luxury: Leading and supporting the forefront of this ‘streetwearification’ of luxury is also the trend aptly named as ‘sneakerisation of luxury’. Global sales of sneakers — or trainers — rose 10 per cent to 3.5 billion euros last year, outperforming a 7 per cent rise in handbags, according to consultancy Bain & Co. From red carpet to Oscars, from Louis Vuitton to Gucci, all luxury brands have now invaded the ‘sneaker culture’. Sneakers with suits, sneakers with dresses, even sneaker stilettos heels!

Online Luxury Continues to Grow: More and more luxury sales are taking place online and could make a significant impact on physical store sales in the longer term. Luxury online sales jumped 24 per cent in 2017, reaching an overall market share of 9 per cent. Bain & Co estimates that by 2025, online sales of personal luxury goods will make up 25 per cent of the total market. In India, still at a nascent stage, online luxury sales is being fuelled by reusable luxury, rent-a-luxury product and luxury service providers.

‘See Now-Buy Now’ to Capsule Collections: In order to try restricting the influx and invasion of fast fashion brands into the luxury domain, traditional luxury brands introduced concepts like ‘See now–Buy now’ a few years ago. However, the latest experiment by Burberry is around the concept of ‘capsule collections’ where smaller doses of fresh collections will be added to the stores regularly.

Experiential Luxury: With experience being supreme, the physical retail has tried to keep pace with the digital onrush by bringing in aspects of virtual reality, augmented reality to on-demand luxury. Men’s wear retailers offer more than just clothes — from coffee to a soothing drink to a salon to a meal, the men are pampered with their favourite relaxant while sales may or may not occur. On the other hand, hotels, travel locations are offering virtual reality enabled appeal of five senses where one’s hotel room could convert from a beach to a mountain top environment at the push of a few buttons.

Rise of the Selfie Culture: The rise of this self-obsessive, look-good-all-the-time culture so driven by the self-obsessed selfie generation has turbocharged the sales of beauty, perfumes, cosmetics and skin care products.

‘Phygital’ is the New Retail: From omnichannel retail to now ‘phygital’ retail, the humble shop has taken a quantum jump in evolution. Shoppers being offered a seamless experience with no human interaction is the order of the day. No long queues, no sales pitch, no cashiers — ‘just pick and go’ is now a reality. From Amazon go in Seattle in the US to a Decathlon store on Brigade Road in Bangalore or a WatAsale store in Kochi, India, the surreal, cashier-less, checkout-free store is now a reality. Luxury brands have so far adopted features like ‘a magic mirror to entire product history’ to i-Pad-based checkout to 3D size scanning, etc. The days of the seamless luxury store are not far away either.

Affluence and connectivity has changed everything: Last but not the least, rising affluence and supersonic connectivity has changed everything. Luxury is no longer about the super car, or the dream holiday or the designer handbag as is still desired by but remains elusive to many. After all, supersonic connectivity ensures all these or more on hassle-free on-demand service. Rising affluence and the amazing lifestyles made possible by connectivity have shifted the frontiers of luxury. The one fundamental truth that remains unchanged however is that ‘luxury at its heart has always been and continues to remain all about status’.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Abhay Gupta

The author is founder & CEO, Luxury Connect & Luxury Connect Business School

More From The Author >>
sentifi.com

Top themes and market attention on: