Luxury, the very word, invokes a sense of extravagance, prosperity, and elegance. Luxury is an experience; it is a feeling that defines people’s intent to splurge and their thirst for more. Luxury evokes different emotions in different individuals; for some, it’s the comfort of sitting in a Mercedes. To others, it’s the power that comes with wearing a Rolex timepiece. For some, it has a hand-embroidered bag from Louis Vuitton; to others, it’s the fragrance that comes from a Chanel perfume. It is a feeling that separates and defines people’s thirst for more, for better.
But how did it all start? Why do we seek luxury?
Join us for the journey of how Luxury started to where it is today and how it’s changing:-
Luxury itself has its roots in human culture since the dawn of civilization. For thousands of years, “Luxury” was all a show of power, of obscene wealth and it took place in trends we see to date, from diamond-studded rings and crowns, best quality shoes to incredible palaces made of the finest materials and bespoke craftsmanship.
Throughout history, luxury was always concentrated in the hands of a few, the kings and queens of society, the Elite.
This continued for many years, until the industrial era.
The industrial era was a defining time in human history that changed human behavior towards products and impacted the distribution of wealth.
Suddenly, the means and creation of wealth spread out, people had access to more money, and with that, the thirst for luxury only increased.
As the market for mass products increased, luxury brands started coming up to satisfy the age-old behaviors of showcasing power and providing high quality.
Throughout the 19th and 20th centuries, luxury brands started opening each with their unique distinction:
And with that came the advent of Luxury Marketing.
So how do luxury brands market their products?
For years these brands enjoyed prestige and elitism, only the rich could afford them and they continued to grow.
Marketing for luxury brands was always along the lines of exemplary quality and separation from the masses.
Marketing communication along the line handmade made took place when the whole world slowly moved into machine manufacturing.
Koenigsegg, a Swedish luxury sports car manufacturer which started in 1994 is the embodiment of this philosophy. Everything from the careful layup of pre-preg carbon fibre to the interior of a Koenigsegg is meticulously handcrafted. The customer has the ability to influence the creative process during the specification of their car, every car eventually becomes a unique work of art built to the highest standards and to the customers’ wishes.
Luxury was always obviously better, by a considerable margin.
The 1900s saw a huge jump in luxury brands across the world from fashion brands such as Balenciaga, Prada and Gucci to watches such as the Rolex.
The amazing part was luxury was something that had very strong geographic ties.
The French and Italians with their monopoly on fashion, the Swiss had their monopoly on watches, the Germans with automobiles are just a few examples.
In the late 1900s, globalization allowed these brands to stretch across the world entering economies and showing people the prestige that came with owning a product. Luxury was highly aspirational in nature, something that you want and could have rather than something completely unattainable anymore.
Then came the internet, and the world was never the same. The internet made the world a smaller place. Now you could communicate with people halfway across the world with a few clicks, knowledge became freely available and companies capitalized on this new industry.
Yet, despite that, luxury brands enjoyed their sovereignty, their distinction of being an experience rather than just a product. Typically, luxury brands invest heavily in traditional channels: Out of home marketing, above the line and high-end in-store experiences to complete the consumer journey and the impact of the internet was minimal
While new luxury brands come out in the marketing, most of the major players are those entrenched in people’s minds, the ones with rich history and brand value
After all, Even a normal watch can tell the time, but a Rolex doesn’t just tell the time, it tells history.
With the advent of the smartphone and social media is the time where everything really started to change.
The social age has done more to change the views about luxury than any other time throughout history. Millennials and Gen Z, the rapid propagators of this age expanded this era at a speed which baffles everyone. Facebook with over billions of users every day, YouTube with millions of viewers every day, Instagram with hundreds of millions of users, paved the way for rapid shifting of thought processes and how consumers interact with brands and cultures.
Covid -19 accelerated these trends rapidly, and led to not only a drop across most industries but the luxury industry especially saw huge downfall in sales across the world as people focussed on essentials.
What are the repercussions?
The Luxury industry has to change.
By 2025, 55% of luxury consumers would be Millenials and Gen Z.
This is especially significant as while the fundamental meaning of the word ‘Luxury’: Quality, heritage and a desire for something beautiful hasn’t changed in the consumer’s mind but amidst the pandemic and cultural views, what constitutes luxury has changed.
Now Millenials and Gen Z consumers seek brands that resonate with their values rather than just the products.
Luxury now has to become more inclusive, something it has never had to do since its inception.
So where is the future for luxury headed?
Well, all is not bad, during the year of the pandemic, the number of High Net Worth Individuals grew by 2.5% globally and 12% in Asia, which majorly consists of developing markets.
a) Move towards Hybrid Retail Spaces:-
Typically Luxury invested in: Out of Home advertising with high end store experiences. The pandemic has changed that with people comfortable at home, and becoming more comfortable about ordering online.
Luxury brands will also have to take things online using hybrid approaches to curate the experience for its consumers.
A very new example of this would be the Gucci store that has opened in the metaverse, an amazing example of how a luxury brand is finding a new way to interact with its consumers online and provide experiences and then order products.
b) Demand for sustainability:-
With changing trends, luxury brands have to be more conscious about their environmental impact, which involves reducing carbon footprint supporting local communities and animal rights.
Luxury brands have to focus on making their brands more sustainable and providing the same level of experience to the consumers.
c) Move towards turning values into emotions:-
In an increasingly digital world, it’s not about reach but relevance. Today’s consumers want authenticity and judge a brand by its actions and not words.
Luxury marketing must also pivot to enable more inclusivity with consumer values. The future of the luxury industry is one of cultural and creative excellence.
For now, that’s all we have; I hope you had a fun time reading the article. We would love your comments on what you think and leave you with this one thought on luxury: What new magical, symbolic objects can luxury brands offer us that would satisfy our deeply rooted aspirational drives?
Interesting read!
I find it interesting and aspirational. One day I might just use one of them.
Thanks for your blog, nice to read. Do not stop.