In Selling to the New Elite, I devoted a chapter to the history of luxury, and argued that luxury is essentially a cultural universal, having existed in every culture and time period, but manifesting itself differently across time and place. Even in cultures not known for materialism, there are special objects and experiences that are highly valued precisely because they are special. In every culture there are objects that are beautiful, artistic, exquisite and sublime; there are experiences which are rare and memorable. In both cases, one who appreciates the luxury is emotionally uplifted by the pride and passion inherent in something transcending mere utilitarian function.
Luxury is impressive for its universality and adaptability, and like life in general, is evolving more quickly than ever. At my company, we’re currently conducting a deep dive survey on the latest evolutions through our barometer, and in early May I’ll share it at Luxury Daily’s State of Luxury 2013 Roundtable, as well as our Point-of-View Forum on Luxe in Flux (and, of course, here on MediaPost).
As we put our latest data in context, it’s hard to believe nearly a decade has passed since the mid-2000s “luxury boom.” At the time, it seemed everyone was getting rich; moreover, the rich were admired, not vilified or resented. And while the late-90s dot-com boom had minted a fresh batch of high-tech millionaires, this wealth boom seemed so much more accessible – it was based on home values, the bedrock of the American Dream itself. Middle class and mass affluent consumers spent based on “feeling” wealthy, and “anticipating” wealth. Lower-priced luxury brand extensions proliferated, causing some to wonder if luxury had “lost its luster.” It was a problem that wouldn’t last long.
Even with the shock of the Great Recession, luxury didn’t disappear – it evolved, in ways obvious and subtle. It became a more occasional experience, and less of a consistent lifestyle, while refining its targets upwards from middle-class and mass affluent consumers. Many brands further refocused on those most passionate about their category, as luxury consumers increasingly concentrated their discretionary spending in categories of greatest enthusiasm.
But luxury evolved in subtle and more qualitative ways as well, and circa 2008-9 was characterized by terms like “stealth wealth” and “logo shame.” The meme that summarized the zeitgeist – stories of women leaving New York’s most famous fashion retailers with their purchases in plain brown bags. Luxury evolved – it became more understated and subtle, while also becoming increasingly intimate, idiosyncratic, and self-defined. It became less about the logo and more about what the logo meant. Simply put, it evolved to be more personallymeaningful.
It is a testament to luxury’s resilience – and the deep needs it fulfills for some consumers – that issues of logo shame quickly faded. By 2010 and 2011, it seemed socially acceptable to buy luxury again, as long as you were smart about it. Luxury, historically about being expensive, evolved to become value-oriented. At our November 2011 Point-of-View Forum on luxury, we presented data showing 89% of Affluents agreed, “When I decide to purchase a luxury item, I go out of my way to find the best price possible.” While the industry pondered whether discounts might tarnish perceptions of luxury, the consumer attitude was clear: only 22% agreed, “If a luxury product goes on sale, it lessens the perception of luxury.”
Brash upstarts adapted to the new value requirements in luxury, finding success with flash sales and other value-oriented merchandising approaches. Some traditional luxury brands found success by holding the line on price, but communicating their value-proposition more directly with messages of longer lasting, heirloom quality, or uncompromising excellence in service, craftsmanship and materials. Perhaps most challenging – the new demand for value was added on top of recent evolutions, and to truly connect luxury had to be value-oriented and understated and personally meaningful.
Today, luxury continues evolving, with additional requirements added on top of the old. Our latest study will examine experiential and “social cred” elements of luxury, as well as the evolving role of technology and social media throughout the luxury funnel. We’ll quantify how mobile devices themselves are a hot new accessible luxury – elegant in design, and strong in value due to low price and utility – with roughly 40% of Affluents typically buying at the high-end when purchasing electronics (outpacing virtually every other category).
In part, many of today’s luxury trends are converging because they reflect a younger generation of Millennial Affluents putting their unique stamp on the meaning of luxury – a generational changing-of-the-guard we’ll explore thoroughly in our data next month.
For now, it’s clear that Affluents expect more from luxury than ever before: uncompromising excellence with strong value, social cred with personal meaning, exceptional design with understated elegance. These benefits are challenging to communicate individually, and daunting to communicate collectively, particularly while staying authentically true to the brand. To succeed, brands and media must collaborate to more effectively tell compelling stories that intertwine a brand’s DNA with this growing collection of evolving consumer needs.