OPINION18 July 2018

The L word: brand-building for the new luxury generation

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Luxury is being redefined by a new generation of consumers with differing expectations and brands setting the benchmark without even using the word ‘luxury', writes Liana Gregorians. 

Luxury yacht_crop

Once upon a time, luxury was simple: finely crafted, beautifully packaged, and very expensive. Brands were coveted for their exclusivity and created aspirational images consumers wanted to buy into – although only a small group could.

The desire for luxury is timeless, and that desire can absorb any shock the macro-environment creates. But luxury is changing as consumers look for self-betterment, ‘you had to be there’ moments, and desire to be clients and not consumers.

At Mash, through round-tables with luxury experts including the founder of Mr & Mrs Smith; proprietary research with 3,000 luxury consumers across China, the US and UK; and a series of interviews with leading lights in the worlds of fashion and digital, we’ve learned that luxury is being redefined. It’s becoming more democratic, more digital and more millennial – and in the future, it will have less to do with price than ever.

The most coveted brands of tomorrow aren’t built for ‘luxury’. They are built for curiosity, experiences and deep, discerning knowledge, flitting between the ultra-shareable and the unknowable. In short, they speak the language of the New Connoisseurs: a set of future consumer tribes reshaping the future of luxury.

The New Connoisseurs choose luxury brands not just for what they can buy, but for their values and the enriching experiences they deliver. They are setting the new benchmarks of luxury – often without even saying the word.

So how can brands design for the New Connoisseurs? At the MRS Luxury Research Conference, Mash will share our insight on the key desires of each of these new tribes and how to engage them. But across the spectrum, we see four key themes emerge as the defining features of luxury tomorrow:

Digital is the frenemy of luxury. Although born out of different worlds – one rooted in tightly-guarded exclusivity, the other a fluid space without barriers – 40% of US millennials claim to have made a luxury purchase via an app in the last month. In the best cases, digital not only co-exists with luxury, but enhances it: Rolex’s personalisation platform allows consumers to design their watch online, but only purchase in-store, delivering something that feels exclusive to the individual. With US consumers valuing personalisation over heritage in luxury goods, curation must be at the forefront of digital luxury.

Self-actualisation is the new aspiration. There is a transformational shift taking place in the luxury economy, and brands need to deliver a new currency: meaning. We have already seen the move from goods to experiences, but as more people are travelling to hard-to-reach locations and visiting secret events, experiences in and of themselves are becoming common currency. Today’s luxury consumers seek brands that enable them to learn unique skills or knowledge, express their creativity, do good for others and the planet, or find mindfulness and spirituality.

Local is essential to the luxury experience. Extreme wealth pockets around the world have created a new class of luxury consumers. But while the world may be more global than ever before, the meaning and momentum of luxury differs across markets: from the markers of aspiration to the motivations behind it (in the UK only 9% of consumers buy luxury products to stand out; this figure is 25% in China). As the codes of luxury become increasingly divergent, so are the players: in China our research reveals a new openness to local luxury brands. Will a surge send Western luxury houses crashing, or will a sophisticated cadre of global brands always rule?

From experiences to ecosystems. Experiences will still be the engines of luxury brands – but how they monetise and stretch will evolve. We will increasingly see brands building ecosystems of luxury:

  •  Shifting from consumer to client dynamics: Hermès is investing more than ever before in staff, with the aim of developing lifetime relationships that personally introduce clients to new products, categories and sister brands
  • Partnering for new brand expressions: joint ventures between luxury brands and experiential businesses will see car makers sending clients to tailors and fashion houses developing living spaces
  • Balancing transaction with experience: many of Tesla’s ‘dealerships’ look more like galleries, while Tiffany’s new flagship in London is designed to introduce a more ‘playful and intriguing’ experience to fine jewellery, leaving traditional notions of luxury behind.

Luxury will never die, but some luxury brands will. Now is the time to ensure yours isn’t one of them. Join Mash at the MRS Luxury Research Conference and let us introduce you to the New Connoisseurs, the changing dynamics of desire – and together, build the luxury brands of tomorrow.

Liana Gregorians is associate director at Mash Strategy Studio.