the new luxury October 2013 Regina M. Connell
Executive summary • Luxury is evolving: • The taste of the traditional luxury buyer is changing • Mass luxury has lost its power • An independent luxury segment, characterized by a particularly hard-toreach demographic, is growing in influence and number • This impacts companies’ brands, and all aspects of the customer relationship: product, communication, and sales
Executive summary • What is the nature of your risk? What is your opportunity? • Is this a fad or a longer-term trend? • What is your response to the evolution in tastes and market segments? • Build? • Buy? • Partner?
luxury
The evolution of luxury
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Luxury through the ages luxury (n.)
Origins: Latin luxus: dislocated. Also luxuria: excess, extravagance, magnificence. Old French luxurie: debauchery, dissoluteness, lust.
1700s 1800s 1916 Today
The New Luxury
20th century luxury
The new luxury
The new luxury consumer
The old (20th C) luxury consumer • Passionate about quality • Concerned with uniqueness • Clearly recognizable as a luxury consumer • Label-focused • Fashion-focused • Acquisition-focused • Gathers information from traditional media, influenced by celebrity
The mass luxury consumer • Concerned with trends • Label and fashion focused • Driven by “tribal” affiliations • Gathers information from social and traditional media • Highly influenced by social mores (social shopping) • Highly influential among peers
The indie luxury consumer • More likely to express “stealth”, unbranded luxury • Driven by self-expression, creativity and independence • Focused on experience, process and story • Gathers information from nontraditional and oft-changing sources • Influences and inspires new wealth sectors (e.g. tech, creative economy participants)
Who are they? • Creatives: media, architecture and design, advertising, PR, real estate, entertainment • Entrepreneurs • Financial Services • Technology • ...and all those who aspire to be them
The roots of change
A long-term trend, not a fad • Driven by long-term shifts in economy and new types of wealth • Shaped by cultural changes • Accelerated by technology and globalization • Rooted in psychological needs
Why the change? Economy
2008 and its aftermath
Social Mores
Income inequality and the 1% problem The rise of conscious consumption
Brands
Macro
Massification of luxury and the death of exclusivity
Technology
Micro
Digital and social media
The human mind
Broader understanding of the “hedonic treadmill�
The human factor: the search for happiness • The acquisitive “hit” on which shopping, but luxury shopping in particular depends, dissipates over time: people are left wanting something else • It’s that something else that the new luxury seeks to satisfy through a more holistic experience that endures
the new luxury = the quest for (a new kind of) happiness
A more complete happiness Self actualization, achieving individual potential
“Old” Luxury
“New” Luxury
Self-esteem, confidence, achievement, respect Social needs: sense of affiliation, acceptance, affection
Safety: physical and psychological safety
Physiological needs: food, water, warmth, rest
Improving on Maslow Self actualization, achieving individual potential
Creating deeper happiness
Self-esteem, confidence, achievement, respect
The foundation: Maslow’s Hierarchy of Needs
Awareness Memory Linkage
Social needs: sense of affiliation, acceptance, affection
Safety: physical and psychological safety
Physiological needs: food, water, warmth, rest
What is the new luxury?
The new luxury construct
the enduring standard
the new standard
refinement rareness aesthetics quality
value
meaning story values
connection
The new luxury is still luxury
Rare Refined Quality
It has to give pleasure: but pleasure that’s sensual & intellectual & emotional
The new luxury: imperfect perfection
The new luxury: imperfect perfection
The new luxury: individual vs. exclusive
The new luxury: awareness of connectedness less massmanufacture
less waste less (no) harm
The new luxury: a new sense of value experience vs. products time meaning happiness
The new luxury: meaning & the new social values
The new luxury: meaning and story
The new luxury: meaning and story
The new luxury: meaning and connection
The new luxury: experience Experiences linger longer than the pleasure of acquisition Experience is connection to others, or to a higher, truer self
Improving on Maslow Exclusivity Story Experience Values
Self actualization, achieving individual potential
Creating deeper happiness
Self-esteem, confidence, achievement, respect
Awareness Memory Linkage
Social needs: sense of affiliation, acceptance, affection
Safety: physical and psychological safety
Physiological needs: food, water, warmth, rest
What this means
Where does this leave brands?
Brand matters more Branding matters less
How does the New Luxury affect you?
Tastes are already changing: how will they continue to evolve?
Core luxury
Will the mass luxury market still exist? What will their tastes be? What happens if those they emulate change their tastes and habits?
Indie Luxury
How do you reach people who pride themselves on not following the herd? How influential will these people be? I make products. They want experiences. What do I do?
Mass Luxury
Is this an opportunity for core luxury brands? Is this an opportunity for mass luxury brands and companies?
What are your options
build Partner
Product Extensions
Reframe your brand Storytelling Experience Service Events
buy Create your own brand
Integrate
Collaborate
Leave Independent
To take advantage of the New Luxury: think different(ly) • Rethink production • Understand your story • Under the radar promotion • Authenticity and transparency
THANK YOU Regina M. Connell 415.322.9462 reginaconnell@mac.com