Contact: Keeping a Low Profile
When i sat in on a research panel last year, someone said, "The fact that anyone can lead a luxurious life shows that the meaning of luxury has changed." Even though the research was only from several months ago, there's something about that sentiment that seems incredibly dated and irrelevant now, which made me wonder why. And if indeed it is dated, and things have changed so much, so fast, what does it mean for the luxury business?
The luxury category has always been an interesting one, but perhaps never more so than right now, as consumers are crashing around them - to the extent that one wealthy man was reported in The New York Times to have cashed in his portfolio, bought gold, silver and a safe to store them in and was considering the purchase of an assault rifle with which to guard it. (Perhaps the assault rifle is bucking the trend, and moving from luxury to necessity in certain zip codes, now.)
Over the last 10 to 15 years the shift toward a democratization of luxury has been driven by three things: lower-cost line extensions from traditional luxury brands (the Prada toiletry bag, for example, or the Gucci key chain); the ubiquitous and embracing credit culture that we're all suffering from now, but which, for a short time, allowed us to believe that things that had been out of our grasp were firmly within reach; and sophisticated marketing that created the sense of rarity and exclusivity where none, in truth, existed.
But what a difference a few months can make. Even without the current meltdown, there had already been a shift away from showy luxury toward a more understated appreciation of good things. That move was driven by the combined factors of bric and bling: The aggressive increase in personal wealth in Brazil, Russia, India and China created a conspicuous consumption of a particularly flashy kind; and closer to home, the bling culture of big diamonds and fast cars became a manifestation of personal success.
Inevitably, more traditional luxury buyers wanted to distance themselves from the associations that come along with diamond-encrusted cell phones (no one wants to look like a Russian oligarch, after all).
And so, watches have become more classically proportioned. Traditional standbys are back in vogue (the Omega Speedmaster, the Rolex Submariner). Suits have become better tailored - and new boutiques like Lord Willy's and Duncan Quinn in New York have opened to furnish them. Speakeasies have blossomed along with cocktail culture, super-premium spirits and the concept of the liquid chef.
But the shift away from conspicuous consumption has accelerated dramatically over the last few months. The threat of joblessness, salary caps and investment fraud has left people paralyzed by fear and holding onto their cash. So what becomes of the luxury industry? Is it doomed?
Not really. But luxury marketers need to change. De Beers released a prescient study in December called "Luxury Considered" that highlighted a shift from fast luxury to the idea of fewer, better things. It reminded me of the old adage "I can't afford to buy cheap shoes" (and perhaps explains the resurgence in Northampton bench-made shoes over the last few months). It may also explain why Bottega Veneta (the fastest-growing luxury brand in the world last year) is doing so well. Their vision is summarized in the line: "When your own initials are enough" (their bags are badged on the inside).
That degree of understatement and reserve is going to be crucial for luxury marketers over the next months - maybe years. And it's something that will have to permeate every aspect of their marketing - positioning, creative, media strategy, placement. All of it needs to conform to a new requirement for flashlessness and inconspicuous consumption.
Traditional luxury cues and values (like provenance and craftsmanship) will become ever more important, as will traditional luxury venues. (Perhaps there's a silver lining to this cloud for style magazines, for example.)
The luxury industry isn't going away because the luxury consumer isn't going away. But like the guy with a safe and an assault rifle, luxury purchases are likely to be better hidden, and well guarded, for a time. M
Paul Parton is the brand-planning partner at The Brooklyn Brothers, a creative collective.