Luxury Redefined: white paper analyses how brands can connect with today's consumers
The luxury industry has been having a hard time keeping up with their consumers - while wooing and educating them in the 2010s_ it did not anticipate that they would outgrow their teachers. Hence_ media brand Highsnobiety together with the Boston Consulting Group surveyed more than 6_6_710 consumers in eleven key markets - China_ South Korea_ Japan_ the US_ the UK_ Spain_ France_ Italy_ Switzerland_ Germany_ the UAE - and published their findings in a white paper.
“Luxury fashion_s efforts to go mainstream worked. But the shoppers and fans who spent that decade consuming_ learning_ and evolving began to feel disenchanted by the luxury promise. It was a classic case of the student becoming the master. Luxury brands couldn_t consistently deliver the ingenuity and craft these savvy new buyers expected_ and when they did_ it came at an exorbitant price_” explains Noah Johnson_ editor-in-chief of Highsnobiety.
What can luxury brands do to understand what makes their customers tick_ what they expect from a brand? What do luxury consumers want their favourite brands to do differently? Are we living in a time of post- or peak-luxury?This is what the white paper “Luxury Redefined: Stop Selling the Dream. Start Fitting Into Reality” set out to explore.
“Luxury shoppers are smarter than ever_ and they expect the brands they buy to be as smart as they are – if not smarter. They see the ways fast fashion is mimicking luxury_ and vice-versa. The crisis the industry is facing isn_t about demand for nice things; it_s about a growing aversion to outmoded ideas of marketing and selling those things_” cautions Johnson.
Today_s luxury consumers want stability and authenticity
Stability and authenticity are the keywords that today_s luxury shoppers are looking for. They want brands and products that are real_ that fit into their world_ that will stand the test of time and not just be part of a trend.
“A higher importance is being placed on brands_ cultural fluency. Fashion fans have grown suspicious of gimmick_ overvaluing and diminishing material quality. They want their clothes to catch up – to be and feel as smart as they_ve become_” is another insight.
Luxury consumers will buy into brands that get them
Unlike in earlier decades_ today_s luxury consumers are done with brand worlds that they are expected to fit into. Instead_ they want brands and products that fit into their lives_ seamlessly. That means if they reject luxury brands or retailers_ they are not rejecting luxury per se but outdated ideas as the survey finds.
“We're at a tipping point. The old fashion model_ the dream world built on exclusivity_ inflated prices and artificial hype_ is crumbling_” confirms Luigi Bernasconi_ merchandising consultant from Lugano_ Switzerland.
The sentiment of buying luxury but not just anything is supported by increased spending on luxury products in the past year_ which has gone up for all age groups and product categories but most for clothing_ footwear and accessories (for 94 percent of Gen Z consumers and 97 percent of baby boomers) while Gen Z and millennials are more likely to buy jewellery and watches.
“It feels sexier to buy hyper-niche local brands or products made by friends of friends and mix with vintage than to shell out on an obvious luxury giant whose quality is likely subpar anyway_” states Lara Casselman_ an art director from Berlin_ Germany.
Newness is no longer enough
While products used to have to be new_ the latest_ trend-driven_ this no longer holds true_ posing a dilemma for an industry that is used to fashion cycles. “Within our lifetimes_ new has become synonymous in many ways with worse: made cheaply_ reactively_ perhaps with AI_ and limited creatively by the demands of a global market. Laments of nothing ever really being new_ anyway (such as in the film industry: it is all remakes_ sequels_ rehashes_ retro)_ and of algorithm fatigue hindering a sense of discovery make that quest for a hot take feel ever more beside the point_” explains the paper.
But this is also an opportunity: Vintage has probably hardly ever been so much en vogue_ and luxury brands do well to dip deep into their archives for hidden treasures. And speaking of treasures_ the hunt is as much part of the purchase as is the product: “Finding something unusual (and how you found it) is becoming just as important as the garment itself_” finds the study.
What can the luxury industry do?
According to the white paper_ a new definition of luxury must surface. And in view of fast fashion and technology_ it also needs to slow down: “The pace has changed_ too - fast fashion accelerated trends to the point where people are now pulling back and craving something with more depth... It's not that they're not spending_ but they're more discerning - they want pieces that will last_ that feel like an investment rather than something disposable.”
In addition_ it is good to know that luxury is not dead_ it is just being redefined. And brands and retailers would do well to note that this is no longer a top-down approach with them dictating what is in but a bottom-up approach to what is desired and fits within a cultural fluency. “As time progresses and access to information becomes more readily available_ audiences are increasingly self-educating_ seeing value in becoming an influencer_s influence rather than the influenced_” is the verdict.
Redefined Luxury
Straightforwardness is a characteristic of redefined luxury_ starting with materials that are superior and cleanly executed. Highsnobiety has identified five areas that have changed or need to change for anyone who wants a piece of this redefined luxury industry: Where there was aspiration_ there is now relevance; where there was fantasy_ there is now reality. A focus on brand aura has changed to product proof and hype drops to lasting quality. Instead of novelty_ there is now legacy and what was future facing now needs to turn into future proofing.
These new paradigms are supported by luxury_s desirability drivers: quality and craftsmanship_ unique designs_ a clear set of values_ independent brands_ a strong social media presence_ a sense of exclusivity and status and timelessness and heritage.
This aligns with what consumers consider most relevant when informing themselves about a brand: innovation and design philosophy_ craftsmanship and the production process_ its core values_ purpose and mission_ and ethical and eco-friendly practices.
The white paper goes on to highlight other important areas_ like consistency and simplicity_ and reveals who inspires respondents_ style choices_ as well as offers a case study.
“Luxury fashion is being reclaimed by consumers who are savvier_ more intentional and less excited by hype. The brands that will define the next era are not necessarily the loudest_ largest or even the most innovative_ but the ones that listen best – those who trade spectacle for substance and status for storytelling. In a market saturated with sameness_ authenticity is key. And rather than price dictating relevance_ brands will be smart to rely instead on craft and cultural fluency_” is the conclusion.
The complete white paper “Luxury Redefined: Stop Selling the Dream. Start Fitting Into Reality” can be downloaded from the Highsnobiety website.