Redefining Luxury _
A new era.
“Watchful young audiences are obsessed with heritage and savoir-faire, shifting the codes of luxury and choosing subtle status signifiers over more obvious, overt displays of wealth.”
-The Future Laboratory
In this article, we’ll be discussing:
- The new luxury consumer
- 4 key drivers that are shaping the future of luxury.
- How luxury retailers can respond to the change.
[Image Credit: Ahluwalia]
Since the pandemic, new consumers have emerged; they are searching for authenticity, curbing excessive consumption, and are turning to the luxury market as a result. Their desire to be noticed and included in a brand’s story has given luxury brands a new perspective on what the definition of luxury is. Luxury has moved towards brands that champion craftsmanship, digital innovations, and consumer brand relationships.
[Image Credit: Yasamine June]
What’s driving new luxury?
#1 Knowledge is power
With extensive knowledge of the industry, young affluents are taking over the luxury clientele, and it is predicted that by 2030, Gen Alpha, Gen Z and Millennials will account for over one-third of the luxury market. With this foresight in mind, brands and retailers are having to rethink their strategies to suit future consumer demographics. Surrounded in an age of streetwear and hype culture, the coming-of-age consumers are trend literate, knowing exactly when something is worth the hype and whether they should invest or steer clear.
Knowing is the new owning, and being in the know has no price tag. 47% of young luxury shoppers say they will pay more to be the first, or only, person to have a product, whereas the other half find that a price tag no longer holds that value of being labelled as luxury. They are invested in the exclusivity of limited-edition ranges and use of digital platforms for drops and releases. This has resulted in the dupe culture and fakes, causing luxury brands to take action to redefine the definition of luxury to become something more aspirational.
[Image Credit: Sneaker Freaker]
#2 Quiet luxury
As the financial climate sees hardship and the wider population is struggling with cost-of-living related issues, the luxury clients are having to whisper, but the market cannot. With the large spending power on the reliable affluent demographic, it gives the luxury market the opportunity to change and shift the dynamic of the sector. From the understanding of wealthier clients, luxury was originally purchased not for practicality but more for the statement and reflection of their status. High net worth clients are now not only trying to enjoy luxury on the down low but are having to respond to the backlash from the wider consumer demographics who are blaming those clients for not rebalancing the societal divide.
Now, there are talks of the introduction of a wealth tax to combat the growing wealth inequality. Coincidentally or not, ‘eat the rich’ is a trending narrative in pop culture, highlighted in prominent TV shows such as The White Lotus and Succession. This has been a catalyst for the ‘Quiet Luxury’ movement, where customers are favouring more understated luxury items. We are already seeing this impact. For example, North America’s retail sales for logo-heavy products have dramatically fallen by 43%.
[Image Credit: White Lotus]
#3 The luxury tech race
Tech is, without a doubt, advancing beyond comprehension. However, as consumers are still seeking and commending the traditional works of luxury craftsmanship, tech will not be used to replace what the luxury market has built. Instead, tech will be used to enhance the luxury experience, creating moments for deeper connection and protecting brand authenticity. Harnessing fast-evolving tech will meet the needs of younger tech-savvy audiences, the future of luxury clients.
In 2022, LVMH invested a whopping £1.4bn in tech development to assist future innovations as well as an answer to the major socio-economic challenge that tech presents for all industries. Incorporating technology within brick and mortar not only enhances the physical retail experience but also caters to the needs of these younger audiences, making them feel considered. Tech. Post-purchase is no exception. Tech allows luxury brands to prove their authenticity by providing intricate details about the product and offering exclusive content through in-garment technology.
[Image Credit: Ahluwalia]
#4 Values are the new prestige
The argument as to whether luxury or high street is worse still stands, with some believing that the high street is fuelling throwaway culture and responding to temporary, fast-fashion brands. However, others feel luxury may be unnecessary and is simply a token of wealth, regardless of the life span that comes with the timeless pieces. Is luxury seen as an investment? This is the question the Gen Z’s and younger millennials are asking themselves, but what isn’t up for debate is the impact of the items.
With 58% of global consumers taking more action to protect the environment due to extreme weather events, they are beginning to weigh up their needs vs wants when it comes to purchasing something new, regardless of whether it’s luxury or high street. Status is now put down to someone’s values rather than the materialistic objects, and when consumers are looking to purchase something, the brand’s values and standpoints are more of a ‘need to have’ rather than a ‘nice to have’. There is now a bigger focus on supply and transparency of that, more than ever, which can highlight the wastefulness of a brand and its future intentions.
[Image Credit: Coachtopia]
- Knowing is the new owning, and knowing has no price tag.
- Luxury clients are having to whisper, but the wider luxury industry cannot.
- Brands values are more of a ‘need to have’ rather than a ‘nice to have’ among the conscious consumers.
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 with 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.