The New Luxe – 9 Defining Trends

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Future Luxury – or the question of just what exactly is “luxe” in this day and age – has been a topic of interest to some of my clients in the past year, and so has been a bit of an ongoing research theme for me. I don’t obsess about it (that would be unhealthy), but I seem to need to reform my thoughts on it every couple of months, so it rests in some place in the back of my mind where I file related information as it comes past, ready to synthesise the next time I need to shake off the dust and think about it again.

Which made me interested to read editor of Style magazine (Singapore), Daniel Goh’s snippit “Lazy Is New Luxe” in the weekend Today newspaper (p30) today. His big luxury is time. The time to tend to his plants, take a bubble bath, enjoy a night in with a good book. I hear you Daniel. I also joke with people that I’m cash-rich and time-poor. Actually it’s just a half-truth.

We did some fairly in-depth research into consumer electronics a while ago and what we found was that “premium” or “luxury” brands have now almost ceased to exist in this market. What we found was that the era of the traditional “mass brand” was over:

• The market has polarised into two segments: 1st tier and 2nd/3rd tier (premium and value brands). There is little or no difference between mass brand and premium brand.
• Consumers have little or no preference between brands in the first tier. If they decide to buy in this tier they will then consider the brands fairly objectively for features they are looking for.
• Quality is no longer an exclusive property. Value brands have made a big step forward and the “superior quality” perception has closed. Risk perception with regard to value brands has strongly reduced, even in categories with a higher perceived risk.
• The “expressiveness” of brands is diminishing. User groups of competitive brands hardly differ from each other. The consumption of a specific brand says less about us then marketers would like us to believe.
• The premium segment has become accessible for the mass consumer. The increased wealth of society has led to a situation in which more and more consumers can afford prestigious brands. Consequently these luxury brands are no longer exclusive. In some consumer electronics segments there may still be some residual “expressiveness”in premium brands, in others there is almost none.

You can probably water these findings down somewhat in industries like fashion and premium alcohols, but the trend towards flattening of the tiers will undoubtably still exist.

So, where traditionally markets have consisted of three segments: low (the “value segment” where price is the reason for buying), middle (the “mass brands”) and high (the premium or luxury brands characterized by high price, high ego and high design), shifts have occurred. Consumers have moved “up”, while premium brands, previously a limited, private sort of luxury maintained by the “average consumption of above average people” has shifted “down”, to become a more open and widely accessible luxury fuelled by “the above average consumption of average people”.

We can all afford a Zegna suit, a Guerlain perfume or a B&O soundsystem now, so what happens to the concept of “luxury” when everyone can take part in it? “Expensive” and “Luxury” are not synonyms, so what trends will define luxury in the future? I’ve got 9 that I’ve been playing with:

1. Time
Daniel put his finger on it in the paper today and I have to agree. Time has become extremely valuable. The Italians call it dolce far niente – the beauty of doing nothing at all except relaxing.

2. Quality
We’re buying more and more at lower and lower prices, we’re stripping the world of resources and we’re creating mountains of trash. My computer (a Mac Mini) and my mp3 player (iPod) can’t even be opened by a normal person with a toolbox to fix. We’re taking “disposable” for granted. There is a difference between low price and priceworthiness and I see a strong future trend in demanding excellence in material and design. This will include recyclability and ageless iconic products that will last for generations. In the future we’ll buy less but better products.

3. Responsibility
Call it “conscious consumption” if you want, but where “maximising profits” was an acceptable focus for a company in the past, it won’t be in the future. It will be impossible to sell products tested on animals and we’ll see more and more organic and ecologically sustainable materials being used in product design. Personal and corporate charity will continue to grow and we will demand transparency. Consumers will be increasingly socially conscious, and to succeed companies will need to consider all stakeholders (including society at large) and their focus will need to be larger than just profit taking and include the concept of “doing good”.

4. Security
Clean air, a clean environment, safety and good infrastructure are four things which define a “future luxury” environment. We’ll still want the “luxury” conveniences of our cities, like a decent coffee, nice restaurants and access to good entertainment, but as connectivity increasingly makes our comfortable homes our hub to the world, we’re going to see more and more people seeking the “good life” outside of major cities that can’t provide it.

5. Brands Resonate With Us Emotionally
Everyone’s antennae is tuned into their own little niche part of the internet and if you happen to tune into the marketing niche you’ll know that the conversation is raucous on this topic now. We’re so bombarded with messages from brands now that not only do we not believe most of them, we hardly notice them. The great challenge for companies is in finding new ways to converse, involve and interact with people, finding a way for them to experience the brand on their own terms. This relevant brand experience is paramount to the future of relationships between brands and consumers. Brands that understand that they are just a tool for people to improve their lives will flourish, but sticking with traditional “sales” techniques will be a sure death. All the basic principles of marketing still apply, but they need to be re-examined in light of a changing world.

6. Regionalism
The same super-brand shops, shopping malls and look-alike hotels are popping up all over the world. Authenticity is disappearing (is it still a British product if it’s put together in Vietnam using Chinese parts by a British brand?). The current inquiry into Fairtrade coffee (alleged price-fixing and paying sub-minimum wages to farm workers) shows that ethics and credibility are hard to judge. Globalisation has been valuable to our lives in many ways, but we will increasingly see a “new luxury” of locally produced products and produce, with their inherent local textures and flavours. Luxury will come from artists, craftsmen, growers and manufacturers that we know and support.

7. Health
Jamie Oliver’s school lunch revelations and the move Super Size Me only told us something we all know. Crap food creates havoc with your health, and it’s a huge problem. Decades ago it was a luxury to eat something flown in from across the world. Now it’s a luxury to eat organic produce grown locally, but its a luxury we’ll increasing demand.

8. Artisan Products
If you popped in to read this from the US, Australia or China (yay, someone would actually be reading it), there’s some chance we’d use the same shampoo, drink the same wine or eat the same jam. We probably have the same brands in our supermarket and mall. “Future luxury” will be about limited editions, one-offs, hand-crafteds and artist-produced works. We’ll probably still use the same shampoo (or perhaps not), but in some areas of our lives we’ll become anti-mass-market, boutique consumers.

9. Knowledge
If you travelled to Singapore I could show you where to get a great cup of coffee for no more than you’d pay at Starbucks. But if you didn’t know anyone here, money can’t buy that information. Information is currency and our world is increasingly saturated with noise, making concise on-point information even more valuable. Luxury is no longer a monetary matter, it’s about knowing things, and knowing the right things for you. There’s no longer an “it” bag or the “right” shoes, it’s all about context. So high value and low value has become a very personal thing and “future luxury” will be all about navigating information to find the valuable knowledge you need.

Pic by CreativeSpark

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Tags: artisan products, brand expressiveness, brands emotional resonance, conscious consumption, consumer segmentation, exclusivity, fairtrade, globalisation, globalization, luxury, luxury consumer research, luxury marketing, market segmentation, marketing research, mass marketing, niche marketing, premium tier marketing, prestige marketing, regionalism, responsible consumption, sustainable consumption, urban security