Emerging Trends In The Luxury Space: Luxury Daily’s Luxury First Look
Today's luxury market is full of contradictions. Retail as we know it is dead, but luxury pop-ups and specialty stores are wildly popular. People prefer authenticity except when they are falling for new logo-centric brands. The truth is that in today's world there is no one luxury, there are a variety of market segments making different purchasing choices. At Luxury Daily's Luxury First Look, a day-long overview of luxury trends, what emerged was the knowledge that there is no one luxury consumer but there are certain over-arching trends.
Trading Up and Trading Down
According to research presented by Christine Barton, senior partner, and managing director, Boston Consulting Group one factor with millennials is that they don't have to have universal luxury in all ways. In fact, they are very comfortable trading up and trading down depending on their passions. They may cut back on designer clothing so they can fund a large trip.
Make it Perfect, Please
Experience is still critical, and this applies to real estate. As Luxury Portfolio President Paul Boomsma pointed out in a session on craft in the modern world, today's client is buying more than a home, they are buying a lifestyle, and they expect all the details to be perfect. Boomsma attributed part of the rise in real estate teams to this need to be all things to the modern affluent consumer. The same is true in retail. Matthew Bauer, President of the Madison Avenue Business District, noted that shoppers who visit the exclusive boutiques on Madison Avenue don't want to be sold to by sales clerks; they are looking for experts on what is being sold, and they want something special. Tammy Smulders, President of the fashion and luxury group at Vice Media, gave the example of Sézane, an emerging French retail brand that has opted to sell out of apartments rather than traditional boutique locations. These apartments showcase the goods as well as offering classes and providing a moment that goes deeper than purchasing.
The Amazon Factor
With approximately 64 percent of all American households using Amazon Prime, it's impossible to underestimate its role in our culture. The adoption of Alexa and Echo has only increased our connection to the shopping giant. However, when you look at the luxury market, Amazon is simply not as big of a factor. Amazon has always had an issue with gray market sales of luxury, and most luxury goods are not sold on Amazon. For the true luxury consumer, Barton stated, Amazon is less important overall.
Word Of Mouth
According to research from Boston Consulting Group, word of mouth now outpaces magazines. The role of the paid social media influencer in society overall is huge, but here too there are contradictions. In an afternoon panel on curated media, Nancy Berger, vice president and publisher of Marie Claire, pointed out that authenticators, people with real brand experience who aren't being paid to endorse a product, are far more important than influencers to luxury consumers, a position that David Arnold, executive vice president and managing director, Robb Report also affirmed. For these affluent spenders, their peer group has far more influence. In fact, Cara David of You Gov dubbed this trend as The Rise of the Referral. It’s values play a role as well, as Cara David shared, consumers expect that brands will give back and will be ethical. Part of brand discovery today is about sharing more than just the brand’s history but also where products are made and by whom. All of these details turn word-of-mouth referrers into smart brand advocates.
What About China?
The Chinese market, along with the United States, continues to drive luxury spending. The Chinese consumer is still more interested in shopping as a competitive sport and in acquiring luxury labels, but as their experience of luxury continues to evolve, they are more interested in exploring the world. Tammy Smulders of Vice Media shared a survey that showed that when a luxury consumer was asked if they were given $10,000 what they would spend it on. The U.S. consumer overwhelmingly chose travel while the Chinese consumer opted for designer goods.
Our Wired World
Michael J. Becker, managing partner, Identity Praxis pointed out that we now have the most people have between three and six connected devices including phones, computers, and wearables such as Fitbit and the Apple Watch. By 2020 that number is expected to climb to 10, Our households are increasingly interconnected. Becker stated that by 2022 a household could have as many as 50 interconnected devices. Becker stated that he currently has 75. For the luxury real estate agent, being able to speak to a home's technology features is an important part of how they present the home. As Paul Boomsma pointed out, it's vital that an agent be able to demonstrate the tech features and not press the wrong button. These helpful gadgets are also collecting information on data points on everyone who uses them. This data can make our lives better and our experiences richer, but it’s also crucial to know who has control of the data.
Luxury is an evolution. Right now, there is more flexibility in luxury brands than ever before just as there is more flexibility in all of our lives. The old milestones of career, marriage, and family are shifting into a panoply of options and decisions. This demand is pushing innovation. New brands are emerging quickly and established status brands need to offer more than a logo and a legacy.