And Luxury Brands Have More Opportunity Than Ever
The human mind prefers simple dichotomies: Good versus evil, friend versus enemy, conservative versus liberal, beer-drinker versus wine-drinker, and so on. And why not? It makes the world easier to deal with and requires less of our precious but rather limited mental processing power. Never mind that the world tends to be a much more complex place with lots more shades of grey than black and white.
While none of that normally is enough to get me to start stabbing the keyboard, reading several recent articles on luxury brands got me sufficiently riled up to start doing so. The crux of these articles, whose authors shall remain anonymous but who should nonetheless know better, proclaimed that the luxury brand market was fundamentally changing from being driven by owning goods and external status signaling (i.e., “conspicuous consumption”) to one driven by more subtle and individualistic experiencing/appreciating (what some are now calling, “authentic consumption”). These authors boldly herald the death of conspicuous consumption while predicting the concomitant death of luxury brands that fail to transform themselves to serve this new, “authentic” consumer of luxury.
Hogwash, I say.
The world is not that simple. People are not that simple. Luxury is not that simple.
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To illustrate, let’s just do some simple gedankenexperiments. If conspicuous consumption were really being replaced by this new-age “authentic consumption”, then why is it that Rolls Royce, one of the most ostentatious expressions of luxury and status, is enjoying record sales…in its 115-year history?!
And why would certain Rolex watches, one of the most traditional, populous barometers of luxury status signaling, have multi-year wait lists at retailers while trading at over 2-3x their retail prices on the secondary market?
And, finally, why are sales at Gucci at a 10-year high and expected to continue rising? Surely wearing Gucci is more about external signaling than internal experiencing/appreciation. It is, after all, not pajama sales driving Gucci’s sales success.
It would be my supposition that the traditional definition of luxury is not so much being supplanted than it is expanding. If anything, luxury brand marketers should be rejoicing, rather than quaking in their Prada boots and Hermès scarves, as it affords them more opportunities to expand their offering and associated business success.
The fact of the matter is that more people than ever are entering the ranks of those who can and will spend money on luxury brands. Some will buy for personal enrichment and experience; others will buy to signal they have joined the class. Some will buy for both reasons. Either way, it’s a good time to be a luxury brand.