The definition of luxury is evolving, and the change applies to not only what people are spending money on, but how they’re doing it.
“In the last few years, we have seen the crystallization of two luxury worlds: one which focuses on an encyclopedic choice of luxury products available at a click; another which is doubling down on the experience mantra,” the global ultra-high-net-worth intelligence firm Wealth-X said in its 2019 handbook, which examines the spending habits and preferences of people whose net worth is between $1 million and $30 million.
That shift coincides with an era in which people are choosing to display their wealth differently than previous generations did.
This is an era where brands like Goyard— a two-century-old Parisian company that eschews any type of advertising but represents the pinnacle of luxury for the world’s elite — and investments like education, security, and privacy are the chosen trappings of the world’s wealthiest people.
Still, luxury fashion is booming, and it partially has to do with how it is consumed.
Technology has left nearly no industry unchanged, and luxury is no exception.
“Mass-market principles have worked their way into luxury and are disrupting the market,” Mike Phillips, Wealth-X’s vice president of marketing and communications said. “Now you can be selling something — and there might be only one made — but it’s on an app.”
Whereas previously the ultimate luxury shopping experience might have included shutting down an entire store for a top spender, that person now has access to the same goods with the increased convenience of an app.
Phillips said apps and sites like Net-a-Porter, Farfetch, and Moda Operandi that sell designer clothes, shoes, and accessories had capitalized on this trend as a new generation of wealthy shoppers emerges.
“When it comes to wealthy millennials or Gen Xers, there are still instances where they are seeking an immersive brand experience at a brick-and-mortar store,” Phillips said, “but at other times they may want to avoid that more traditional pomp and circumstance and opt for the ‘Seamless’ option.”
“Younger generations are less likely to be staunch loyalists to a single brand when compared to their parents and grandparents,” Phillips said. “They’re more likely to try something new if it speaks to their personal values and passions.”
In this way, experiences may not be outright replacing the role of brands in wealthy people’s lives, but they are augmenting the significance of and consideration that goes into buying a particular brand.
“More and more,” Phillips said, “the wealthy are evaluating a brand in terms of: What mission does this brand represent? How does it contribute to the greater good … If I choose to purchase this product, what does that say about me and my values?”
And entire industries are developing or adjusting services to cater to this customer interest too. Wellness is increasingly regarded as a modern embodiment of luxury, and accordingly, an array of spas and studios offering treatments like cryofacials, weeklong retreats, and vitamin IV drips are delivering those experiences.
Exclusivity and personalization also play important roles in the way luxury experiences are marketed. Customers do not want just any experience — they want a unique one tailored to them.
Both of those preferences can clearly be seen in the hospitality industry, where high-end hotels are remembering their guests and tweaking their experiences with personalized touches. Other hotels, meanwhile, are fulfilling guests’ appetites for exclusivity by making their most luxurious or expensive rooms “invisible” and available only to well-connected clients who heard about the room by word of mouth.
(Source: Business Insider)