The New Luxury

How has the Rise of Street Wear Redefined the Way in Which we Percieve Luxury in the Fashion Industry?

The New Luxury,

Contents 1 3 7 9 11 13

What is Luxury?

Old Luxury vs New Luxury The New Luxury Consumer OmniChannel Market ing Burberry and their Onmi Channel Market ing Strategy.

How has the way in which millenials shop changed the luxury industry?

15 17 19 21 23 24

The Future of bricks and mortar stores Sustainability Trends in the Luxury Sector The Future of Retail Figures Appendices References

What is Luxury?

1

The very definition of the word ‘Luxury’, derived from Latin and then French (Lexico Dictionary, 2019), connotes that which has become synonymous with the term. Deemed by the Oxford Dictionary as “An inessential, desirable item which is expensive or difficult to obtain.”, (Oxford, Lexico Dictionary, 2019) this aligns perfectly with that which most of us would deem luxurious. Traditionally, luxury, especially in terms of fashion based items, was seen as something that was reserved exclusively for the wealthier classes and only those who were able to afford the more affluent lifestyle that went hand in hand with such attire.

We are however now seeing development in not only what it means to be a luxury fashion brand, but also the demographics and age range buying into these brands. With an increased focus on streetwear in the fashion industry, its no surprise this was seen as part of the luxury fashion market as well. Since the appointment of Virgil Abloh as artistic director of Louis Vuitton Menswear in March 2018, from his initial position as chief executive officer of his brand Off- White, he

then rose to be elected in his position at Louis Vuitton.

Abloh has been able to breathe new air into a brand who had previously become outdated and stuffy to much of the younger generation they were aiming to target. Streetwear started out as something that no one would have associated with a luxury fashion brand such as Louis Vuitton, however, as he has demonstrated in his time there “what seems preposterous actually becomes the new norm”. (Dazed, 2019) To him, he said, this was “validation that we ultimately changed the atmosphere of design”. (Dazed, 2019) He has, however, in this recent interview with Dazed magazine, when on the subject of streetwear, stated that “I would definitely say it’s gonna die, you know? Like, its time will be up. In my mind, how many more t-shirts can we own, how many more hoodies, how many sneakers?”. (Dazed, 2019) Could this be that perhaps the streetwear trend is not as revolutionary as we all thought and that as Abloh is predicting, it may have had its time already?

“Luxury is anything you covet. To me, if it’s coveted, it’s luxurious to you, and that makes the idea of luxury different to each individual. For a young k id, it could be as simple as their f irst Supreme T-shirt. That k id is going to remember that f irst tee for the rest of their life.”

-Virgil Abloh

Marc Bain, Quartz, 2018

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In the book ‘The New Luxury: Defining the Aspirational in the Age of Hype’, Highsnobiety defines the differences between that which we previously knew, old luxury, and the developing, new luxury. Whereas old luxury focused on creating an aspirational image that was exclusive to those who could afford to purchase the physical items, new luxury has seen a move to buying into a community of inspirational values with a focus on uniqueness and personalization of phygital items and experiences. (Highsnobiety, 2019) This has enabled luxury brands who had previously been seen as stuffy and outdated by younger demographics to open themselves up to a new market, thusincreasing sales. New Luxury

has also seen brands making moves toward an increased focus on the digital areas of their omnichannel strategy, something that is crucial when dealing with the luxury fashion consumer, who according to Forbes ‘aren’t likely to consciously differentiate their experience with a brand’s website from their experience with the same brand in-store. Both experiences are components of overall brand experience and from the consumer’s perspective, they shouldn’t feel disjointed.’

(Forbes, 2017) This clearly states that the higher level, more affluent consumer has expectations of omnichannel marketing that offer consistent shopping experiences across the board.

Old Luxury vs New Luxury

‘The classic symbols—the Hermès Birk in bag, a couture dress by Dior, a watch by Rolex—aren’t in any danger of losing status. But around its edges, the concept of luxury is gett ing blurry, mak ing it less clear where it begins and ends.’

“I think it’s become more acceptable to dress in streetwear on a day-to-day basis and not feel like it’s ghettoised or from a spec if ic community.”

-Alize Demange, Stylist and CEO of ‘The Drop’ Streetwear Rental Store.

Who is

The New Luxury Consumer?

Based on recent studies, by the year 2025, Millenials and Gen Z will make up 50% of all luxury goods spending, (Grubbs, J.B., Exline, J.J., McCain, J., Campbell, W.K. and Twenge, J.M, 2019) thus indicating that they are in fact, at least half what makes up ‘the new luxury consumer’.

In what is often referred to as the digital age, this means that the new demographic luxury brands are aiming to penetrate demands a different type of marketing strategy, one that works across all platforms they interact with and can meet the needs they expect of that particular platform.

The fact that they have grown up, fully immersed in technology, with many of them, especially the Gen Z-ers, only

having lived in the era of mobile phones, online shopping and immersive digital experiences integrated across the board, means that this is what they would expect as the baseline from a luxury brand.

Although the vast majority of these consumers will not yet have built the financial capabilities to buy into luxury for their entire wardrobe, they will choose to buy key items, often shoes, handbags and watches, which allude to the affluence they are aiming to convey in their style, without having to make a full financial commitment. They will then buy their basics from high street brands that are working to emulate the luxury that their consumers aspire to.

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OmniChannel Market ing

Omnichannel marketing is the process by which brands seamlessly use multiple platforms, integrated together, in order to create an immersive experience in which the consumer feels that they not only have their needs met, but they are also far more involved, thus meaning that they are put at the center and able to flexibly involve themselves in whichever channels they choose. This method is frequently used to elevate a brand beyond its competitors by using immersive technology such as virtual dressing rooms, augmented reality and interactive experiences.

In terms of omnichannel marketing, the most effective methods of delivering this to consumers account for the fact that brands are aware different demographics will interact with the strategy in different ways, while still ensuring consistency across all platforms. They will ensure that the

same message, aesthetic and atmosphere are carried across all platforms and devices. In order to most effectively use omnichannel marketing, brands will acknowledge that more often than not, each platform will have features that make it more widely used for specific purposes, this is best illustrated in the way that successful omni platform brands use Twitter in order to handle consumer queries and complaints. In a marketplace that is heavily saturated with so-called luxury brands, and where social media is increasing exposure to new brands, those who wish to be successful are having to develop innovative narratives and delivery methods for their campaigns in order to stand out. In doing this they are then able to create their own communities and develop sales channels which then drive traffic both on and offline.

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Burberry and their Omni Channel Market ing Strategy In a market where there are an ever-increasing amount of channels or touchpoints being used by consumers, many of these digital, and with the average consumer now using at least 11 of these before making any kind of luxury purchase (Barilliance, 2019) it is imperative that brands use this to their advantage in order to sustain such a competitive situation.

Burberry is one such example of this in action. Running more often than not at the forefront of digital innovation within the fashion industry, they have pioneered digital changing rooms, using technology to enhance in-store experience for the consumer through iPad checkout services meaning that the store assistant comes to them rather than the other way around, and are using social media in ways that have not been seen before in order to make it easier than ever for their consumer to purchase through whichever channel they prefer to use. In recent years we have seen them partner with Instagram on Instagram Checkout, the social

media platform’s integrated online retail service which allows in-app purchases without being directed to a brands own website.

The innovation that appeals most to Millenial and Gen Z luxury consumers, however, is the release of their new line, ‘B Series’. A product line created by the brand for solely social media sales, only available to purchase on specific platforms within a 24 hour time period on the 17th of each month. This use of the ‘drop’ strategy sees the brand branching out into marketing ideologies previously only seen used by streetwear brands. Running this for the limited time frame means that it builds a sense of hype around the collection, however, having it as a repeat event encourages a sense of customer loyalty and anticipation. (Barilliance, 2019) Running this strategy on social platforms also means that consumers are able to buy into an exclusive community that they can later document on their own profiles.

At the core of a successful omnichannel strategy is a firm knowledge of the market, the brand and the brand’s positioning within the marketplace. For Burberry this is something they are familiar with, thus meaning that they can pinpoint their demographic exactly. Because of this, as well as the influx of Millenials and Gen Z-ers buying into luxury which is predicted to continue increasing, they have worked on establishing which channels were most widely used by this consumer segment. This resulted in using social platforms to best appeal to their target.

Because the popularity of different platforms can vary depending on geographical location, Burberry conducted research that found that the most effective channels for their brand would be Instagram and WeChat. It is because of this that they now release their ‘drops’ onto Instagram, also enabling their consumers to use their Instagram Checkout function.

As well as numerous technologybased improvements in terms of customer-facing platforms, Burberry has also been working to improve the efficiency of their e-commerce department. Since appointing Mark McClennon, previously of Unilever, to revise the Burberry tech strategy, they have begun streamlining the processes in their e-commerce ordering.

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How has the way in which millenials shop changed the luxury Sector?

“Digit al innovat ion has never been more important in luxury ... award-winning B Series.

Available on soc ial platforms, the monthly drop of limited-edit ion products has proved extremely popular and attracted new and younger customers to the brand.” - Burberry A nnual Report 2018/2019 Due to a culture of entitlement, largely accredited to Gen X parents who told them they could have anything they wanted from life (Forbes, 2017) in one study by the University of Hampshire Millenials scored twenty-five to fifty percent higher than previous generations on entitlement related issues (Grubbs, J.B., Exline, J.J., McCain, J., Campbell, W.K. and Twenge, J.M, 2019). This has impacted their shopping habits, in particular with those related to luxury purchases. Whereas previous generations would have saved in order to buy into higher-priced items, Millenials started a trend of feeling that they were deserving of this level of Harriet Posner’s Fashion Hierarchy (Posner H, 2015) simply because in their opinion it should not be reserved solely for more affluent consumers. It is estimated that by 2025, Millenials and Gen Z will make up fifty percent of all luxury goods spending, (Forbes, 2019) with this predicted level of increase it is clear why more prestigious brands would be aiming to market themselves to these demographics.

An increase of this more affluent appearing lifestyle across social media platforms has meant that as well as choosing

to buy into luxury brands with entry-level items such as fragrances, Millenials and Gen Z are tactically choosing to buy into status items with clear branding that are an obvious signifier of their price point, This is clearly illustrated through the hoards of Chanel classic flap bags and Gucci Marmont ‘GG’ belts in any current Instagram feed. This constant exposure on social media has meant that many brands who have previously been suffering financially have been able to rebuild themselves.

Alongside these two easily accessible points, brands have introduced what is known as ‘Premium Mediocre’. A term coined by blogger Venkatesh Rao, to explain a market segment created to make consumers feel they are buying into luxury, but at a lower price point that would normally include more budget items, however still often emblazoned with branding that suggests the affluence they aim to convey. This can be seen in the lanyards and dog leads sold by Raeburn.

They allow consumers to buy into a brand and feel like part of a community without making a heavy financial commitment.

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bricks and mort ar stores

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In order to ensure the stability of bricks and mortar stores, brands now must strive to work them into part of their omnichannel marketing strategy. This includes considering the fact that the future of bricks and mortar stores could look very different from what we currently know. Some luxury brands are working with concepts in which stores are used for little more than a showroom or immersive experience where consumers can browse products which they are then able to order for home delivery rather than purchasing in store.

Linking this with the way in which bricks and mortar stores are now using immersive digital technology such as augmented reality fitting rooms where the mirror shows a person wearing a projected garment as opposed to a physical one, we are looking at the very real potential that the future of physical stores is that they do not actually stock any tangible products at all.

For many luxury brands, however, the benefit of a bricks and mortar store over operating solely online, allows for them to deliver the human-based, face to face customer service interaction, which in a digital age is now being seen as a

luxury experience. More and more, having a brand that only operates online is seen as mass market, this means that although possible, it is unlikely that we will see true luxury brands moving towards an entirely digital experience. As well as allowing for the personal touch, having a physical store offers the opportunity to deliver seasonal or focused visual merchandising to their consumer base in person. This is best exemplified in Christmas window displays for brands such as Harrods, who in 2013 spent 3 weeks with a team of 50 people putting together their display.

Having a physical space also enables brands to offer experiences alongside their products, often choosing those which will align with brand ethos and contribute to the atmosphere of the store. One particular example where this was effectively put into practice is Sweaty Betty, the yoga and athletic wear brand, who offer 70 free classes a week from running to barre across their stores (Sweaty Betty, 2020).

Not only does this bring an increased footfall to their store, but it also encourages sales as people are likely to buy their products to wear to classes.

Sustainability Trends in the Luxury Sector

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According to Forbes, in the last decade, we have seen massive developments in what exactly is driving the luxury consumer in their choices of where to shop. These are now more often than not driven by concerns about social responsibility and sustainability. In a recent study it was stated that as of 2019, some 62% of true luxury consumers would choose to buy with a brand they knew supported sustainable practices over those who didn’t, compared to only 50% in 2013. This increased to 88% in some parts of Asia compared to much lower percentages in the western market. (Forbes, 2019) They also suggest that brands that offer limited-run lines are increasingly popular amongst those who are interested in sustainability as it shows ‘respect for not flooding the market with too much merchandise’. (Forbes, 2019) This is something that has proven popular in the streetwear sector especially, with many brands such as Supreme and Stussy, offering a

limited availability to collections. Not only does this reduce leftover stock that may have to be disposed of in unethical ways, but it also creates buzz around a release, thus further driving sales.

The luxury sector is often seen to be driving new and innovative technologies or practices in terms of sustainable or ethical fashion. This can be seen in many of the phygital developments we are currently witnessing. From augmented reality experiences that are not only adding an experiential aspect to brands but also enabling them to create environments what would have otherwise been incredibly costly in terms of resources, to the creation of digital garments, which can not only be used by influencers and the like who may only wear a garment once for a sponsorship, but these digital garments can also be used in the designing and manufacturing process in place of toiles. This then reduces

unnecessary usage of materials as well as eradicating the need to ship these garments between a design team and the factory where they are manufactured, which is often outsourced abroad.

As well as increases in digital innovations within the luxury sector, we are seeing developments in terms of how luxury consumers are approaching the concept of renting their clothing. With many companies now operating as almost a library for luxury clothing, stylist and CEO of streetwear rental shop ‘The Drop’, Alize Demange has herself stated that the most challenging aspect of this is changing perceptions.

Many luxury consumers, she says, are put off by the idea that opting to rent your luxury streetwear rather than buying it, explaining that ‘there’s an idea that it’s not as cool to not actually specifically say you owned that item and had the money to buy it in full’ (Baggs. M, 2018) even venturing on

to add that ‘It’s a sad idea. You don’t have to own something in its entirety to prove to everyone else you could have afforded it.’ (Baggs. M, 2018) This term could largely be applied when explaining the logic behind most sustainable ideas put forward here, ‘You don’t have to own something in its entirety to prove that you could afford it’, whether that be in terms of opting to wear a digital garment over a physical one or choosing to rent clothing rather than purchase something which in actual fact is only worn a couple of times.

The Future of Retail The future of retail is currently standing on something of a precipice. In order for it to ensure continuity into the future, we must make drastic changes to its current state in order for it to survive in an increasingly digital marketplace.

With current technological developments underway, including digital garments, augmented reality, digital changing rooms, bricks and mortar retail environments that will serve as a showroom for products rather than an actual store where you can purchase, and countless social media innovations, this proves that the survival of brands is largely based on a foundation of innovating and leading the way with these technological developments. Especially in the luxury sector, this will take focus as consumers expect high-end brands to be at the forefront of new trends. For this reason, I see luxury brands being early adopters for new ideas within digital developments, this will then trickle down to the mass market

in ways that are more affordable and easier to apply to larger consumer demographics. This could work in terms of more consumer-facing technology that increases efficiency of the in-store experience as well as the potential for bricks and mortar stores that operate as a showroom with virtual dressing rooms meaning that even mass-market brands could offer the same experience as more luxury competitors, this also reduces the need for such a large stock base as they can be shipped directly to consumer from a warehouse.

The potential for digital garments to have success overall levels of the market seems unlikely, while there is demand for them within the luxury sector as it enables people to buy into a brand that they might not otherwise be able to, enabling them to then be seen across digital platforms as able to afford this luxury, the cause for it in the mass market is less of a demand.

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Figures Evening Standard (2018).

British Olympic athletes take to catwalk for Virgil Abloh’s Off-White [online image]. Available from: https://www.standard.co.uk/ fashion/off-white-parisfashion-week-ss19-dinaashersmith-katarina-johnsonthompson-a3948231. html [Accessed 10 January 2020].

Mawhood. J. H. (2020). Illustration of Off White Catwalk Dress. Original image from Evening Standard.

Bain, M. (2018). Nobody knows what luxury is anymore [online image].

Available from: https:// qz.com/quartzy/1303457/ nobody-knows-what-luxury-is-anymore/ [Accessed 10 January 2020].

NewLuxury: Available from: https://www. forbes.com/sites/josephdeacetis/2019/10/22/ how-highsnobiety-defines-the-new-luxury/#4131693c4240 (n.d.).

How Highsnobiety Defines The New Luxury [online image]. [Accessed 4 January 2020].

Mawhood. J. H. (2020).

Illustration of Louis Vuitton Jacket. Original image from Highsnobiety.

Available from: https:// www.thefashionspot.com/ runway-news/731253louis-vuitton-x-supreme/#/ slide/1 (n.d.). Here’s the Louis Vuitton x Supreme Collab Everyone’s Freaking Out About - theFashionSpot [online image]. [Accessed 11 January 2020].

Available from: https:// www.thefashionspot.com/ runway-news/731253louis-vuitton-x-supreme/#/ slide/1 (n.d.). Here’s the Louis Vuitton x Supreme Collab Everyone’s Freaking Out About - theFashionSpot [online image]. [Accessed 11 January 2020].

Virgil Abloh, Dazed Magazine: Dazed (2019).

Virgil Abloh: Streetwear?

It’s definitely gonna die [online image]. Available from: https://www. dazeddigital.com/fashion/ article/47195/1/virgil-ablohend-of-2010s-interviewdeath-of-streetwear [Accessed 30 December 2019].

Mawhood. J. H. (2020).

Illustration of Virgil Abloh model. Original image from Dazed.

Barilliance (2019). 2019 Omnichannel Retialing Strategy Case Studies, Strategies, & Tactics [online image]. Available from: https://www.barilliance.com/ omnichannel-retailing-example-guide/ [Accessed 11 January 2020].

Barilliance (2019). 2019 Omnichannel Retialing Strategy Case Studies, Strategies, & Tactics [online image]. Available from: https://www.barilliance.com/ omnichannel-retailing-example-guide/ [Accessed 11 January 2020].

Gucci Marmont Belt, MODESENS: ModeSens (n.d.). Gucci Leather Belt With Double G Buckle In Brown [online image]. Available from: https://modesens.com/ product/gucci-gg-beltcuir-11726557/ [Accessed 4

Mawhood. J. H. (2020). Illustration of Gucci Marmont Belt. Original image from MODESENS.

Available from: https:// www.sweatybetty.com/ discover (n.d.). Discover | Gym Clothes | Sweaty Betty [online image]. [Accessed 11 January 2020].

Luxe Digital (2019). Sustainable Luxury: Millennials Buy Into Socially Conscious Brands [online image].

Available from: https:// luxe.digital/business/digital-luxury-trends/millennials-buy-sustainable-luxury/ [Accessed 11 January 2020].

Luxe Digital (2019). Sustainable Luxury: Millennials Buy Into Socially Conscious Brands [online image].

Available from: https:// luxe.digital/business/digital-luxury-trends/millennials-buy-sustainable-luxury/ [Accessed 11 January 2020].

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Jordan Mawhood 2020