Future Forecast _
What’s next for luxury?
“The global luxury market is expected to grow by between 5% and 12% by 2024 as demand gathers momentum.”
– Bain & Co. Altagamma
Article contents:
- The luxury culture
- Four strategic actions to help navigate the future of the luxury market
- Thought starters for brands to consider
[Image Credit: Hublot]
Cater for luxury connoisseurs.
Cater for luxury connoisseurs in this future forecast. As we look ahead, affluents will move to consuming luxury culture and collecting curated products, seeking awe in elevated branded experiences and circularity in the timepieces they acquire. Against the backdrop of a recession and economy that is leaning towards experience over goods, companies can take steps not only to stay top-of-mind but also to build brand values.
Collector Mindset
Collector Mindset in this future forecast: The need for constant consumption has officially been curbed in place for lore and loyalty, a new flex for the luxury consumer. Affluents invest in higher-quality items to stay loyal to those aspirational brands, with 91% of consumers saying they keep purchases for five years and 31% for at least 20. This drives the demand for rare and curated collectable items such as leather goods, jewellery, and apparel, which younger generations are yearning for. Collector items are already a hot commodity with trade on resale platforms, such as Historia, soaring by 439% since 2022 and piqued interest in auctions and archive sales. With this in mind, new brands are adopting a ‘made to last’ philosophy to complement their exquisite design to create items that are intended to be collected. London fashion brand AOI has done just that by designing ‘collectables, not collections,’ with the founder only intending to launch two product drops yearly. Due to the exclusive nature of the brand, customers are even more compelled to own the wearable art, making AOI a highly sought-after brand.
[Image Credit: AOI]
Circular Craftsmanship
Sustainability and circularity are buzzwords within the industry, but brands are looking beyond simply greenwashing and providing services that allow items to stand the test of time. For example, in 2022, Bottega Venetta started offering a lifetime warranty on their handbags, proving that their products are made to last. American fashion brand, Coach, also dipped their top into sustainability with the launch of their recycled sister brand, Coachtopia, which debuted during a London pop-up earlier this year. The Gen-Z-approved line uses textile scraps to create unique recrafted pieces which glamorise deadstock and last season’s looks. The new collector’s appreciation for craft and longevity means that visibly worn reworked items are reframed as a status symbol. This paves the way for other luxury brands to follow suit and acknowledge the fashion industry’s impact on our planet by providing more sustainable approaches to luxury.
[Image Credit: Coachtopia]
Cross-skill Contamination
Brand, and even industry, collaborations have become the norm in the luxury market. Think Louis Vuitton and Sport with their iconic marketing campaign featuring Ronaldo and Messi, but the novelty and excitement are wearing off. We expect not to decline such collaborations but instead to focus on quiet luxury campaigns and products. This will mean less namedropping and more emphasis on transferring skills from these polarising industries, working in tandem to create something unexpected. Take the Phantom Syntopia, for example. This ultra-luxe car is the brainchild of Rolls Royce and Iris Van Herpen, merging automotive with haute couture. The designers explained this bespoke partnership provides a new era for more meaningful luxury collaborations. Alternatively, watchmakers, Hublot have teamed up with Nespresso to curate a sustainable timepiece that embodies the Swiss brands’ know-how and Nespresso recycled coffee grounds.
[Image Credit: Rolls Royce]
Haute-spitality
Social media has had a significant impact in making the luxury market feel more accessible. However, pre-loved aside, this is a deceptive perception with brands like Chanel doubling the price of their items to ensure the elite luxury isn’t for the mainstream. We believe maybe only a few are purchasing luxury but with the luxury landscape changing, everybody can enjoy the finer things in life in different ways. The haute-spitality trend allows brands to give customers a taste of this life through experience-led touchpoints instead of diffusion ranges or ‘luxury’ perfume. Brands will get the opportunity to create moments beyond the expected that will present as social media spectacles just as Gucci did with their beach club. Lux-tainment, a subsection to haute-spitality, will allow the luxury sector to encompass culture and entertainment through events where fashion will fall second to entertainment.
[Image Credit: LouLou group]
Thought Starters
Re-engineer Rarity
Preloved and virtual collectables are now part of the luxury landscape, creating new accessible touchpoints, so how can your brand deliver exclusivity in these settings?
Embrace Radical Transparency
Besides supply chain transparency, consumers want to know what happens behind closed doors. Can your brand be more vocal about the inner workings of your business or how you maintain your USP?
Conquer New Ground
If aspirational buyers can be outpriced in inflationary times, this important consumer pool can be attracted differently. Can you expand your company’s culture outside the remit of your core activity?
[Image Credit: VAGA]
Takeaway box
- Lore and loyalty take top spot over consumption and ownership
- Consumers are looking to enjoy luxury through experiences rather than products
- Recycled items are now seen as a badge of honour
Looking to join the future of luxury?
For 2023 and beyond, luxury companies must think beyond product development and become community builders and social coordinators to offer their clients the rarest or most immersive moments. We can offer the framework for luxury businesses to establish and cement more meaningful relationships with their consumers through the art of physical retail.