LUXURY FOR WHOM?
Reading Daniel Langer’s brilliant paper on the future of luxury published by The Economist, I am reminded several topics that I have encountered while researching luxury brands – from apparel to chocolate – across the world, such as the increasing demand for ethics and environmental impact, rarity and craftsmanship as pivotal values (as opposed to dominant codes of the fashion industry), and of course customer experience as the most important dimension driving those choices. However, I think that some crucial issues that my research has revealed are missing in the article, and that contribute to highlight the growing complexity of the luxury world.
I will call the first “lost in translation”. To begin with the basics: the brand name. Is it easy to read, to pronounce and to memorize? Does it arouse any evocation in a foreign language? In some cases, even the font (e.g. cursive writing) could be a barrier. In a few cases things can be “gained in translation”, but this is more likely an exception than a rule. The fact that Hermès is transliterated in Chinese as “Hai-ma-shi” is telling: “Ma” means horse in Chinese, and the horse is a symbol of the logo and represents the brand heritage (Hermès was born as horse harness producer). Therefore, Hermès is more revealing in Chinese than in French as a brand name, but clearly not every luxury brand can expect to be as lucky.
The second issue is the lack of consistent data. To measure the KPI’s of a luxury brand is often a tricky exercise: awareness and consideration are the keys, as always, but to define (and to reach) the proper target can be misleading. The super-rich, the decently well-off, and those who merely aspire to be can give you contradictory data, assuming the upscale customers agree to be interviewed (a difficult proposition at best). A further complication is that sales are not a reliable indicator, because often luxury goods are bought by tourists and business travelers, who are not representative of the country where they are sold. Also, the role of influencers has deeply affected the rules of luxury by creating a digital catwalk that often molds people’s taste and preferences more than any other channel.
The third issue is that a luxury brand can boast about its unique assets or marvelous storytelling and yet still have a dramatically different relevance or understanding from one geography to another. Therefore, the cultural framework defines the meaning and the usage of luxury goods more than any other factor.
Finally, and probably the most importantly, one must consider the “who factor”. Luxury goods can be used to impress others as a status symbol or social discriminator. In this case they are easily recognizable. But the flood of fakes and flamboyant logos, so popular some decades ago, are no longer appreciated by the élites at the top of the social pyramid, who can reject brands that become too commercial and mass-market. An intermediate step is “luxury for us”, defined by more discrete brand signals recognizable by peers, but unnoticed by the masses. A symbol that one is among the happy few, a secluded club protected from the emulation of the merely aspirational.
The height of luxury is, however, “luxury for me”: of course, this dimension evokes unique pieces and custom-made goods, the origin of luxury itself. But it includes a more contemporary meaning: if ”luxury for others” means above all prestige, and ”luxury for us” symbolizes privilege, then “luxury for me” stands for an emotional resonance, a unique treat, a self-reward that places personal experience before any other rationale or involvement. “Luxury for me” mirrors and pampers oneself, not simply a matter of standing or membership (as with the previous meanings of luxury). It is more a self-accomplishment, very close to the aesthetic pleasure that Maslow pyramid envisaged at the top of human needs.
To sum up, let’s take a moment to talk about the future of luxury, as an additional comment on Daniel Langer’s paper (https://goo.gl/8m8tG4). Each of the mentioned articulations of luxury is a profitable market.
Up till now “luxury for others” was the main source of sales, because of the larger audience of aspirers and proliferation of licenses (e.g. fragrances, make up, sunglasses), that are not real luxury goods but give you the faint aroma of a luxury brand. This trend is still working especially in the emerging geographies of luxury. However, the customers that can afford real luxury seem troubled by too-big brands accessible by everybody. Luxury means rarity, after all, and luxury democratization goes toward the opposite direction. Overexposure can dilute brand exclusivity and desirability. Hence, this consumer group tends to adhere to “luxury for us”, more discreet, more selective, more refined, so as not to be confused with the masses. This cluster is prevalent among the “in-the-know” crowd: Western citizens, cosmopolitan and educated people, established professionals.
As far as the “luxury for me”, it prevails only among super-rich and old money: they represent the core target for hyper-luxury goods (such as works of art, exclusive real estate, vintage classic cars), but includes an intangible dimension that doesn’t rely on a property. It deals more with memorable and unique experiences, where comfort and beauty are the key words: exclusive leisure, green luxury, upscale house rental, and personal chefs are just some of the examples.