*Luxury* – A thesis on New Luxury in 2022

I have worked 23 years in a rather traditional luxury, made of patrimony, History and stories, unique creations, unequalled craftmanship, iconic designs, real boutiques with real sales ambassadors. Brands which name themselves “Maisons”, because they actually are – an address, an architecture, solid foundations, hosts and guests. Luxury was that luxury.

And then, “New Luxury” came up.

New Luxury won’t replace traditional one. And luxury in general will always be luxury, with some intangibles. Whether you sell branded jewelry or hotel experiences, fun electric cars or vegan food, yoga pants or swiss watches, designer’s dresses or cool bikes, education programs or healthcare services, trips to Space or inner trips within your soul: it’s always the same play: the quest for luxury is a quest for balance, walking a fine line. You can fall left, or right, if you don’t pay attention. Between scale and intimacy, global and local, tradition and modernity, creation and client, art and brand, exclusivity – being unique! – and inclusivity – being a part of! -, aspiration and execution, technology and humanity, hard features and emotions, magic and logic, margins and purpose.

But New Luxury is carrying a seismic shift – and disruption in on the way. Better be ready. In a nutshell :
• Luxury was exclusive – even in the way boutiques are located or designed, or collections are priced, or the overall brand being somewhere aspirational and out of reach -, New Luxury has become inclusive. Brands were clubs, they are communities.
• Luxury was about acquiring-owning-collecting, it is shifting to enjoying-experiencing. Before mainly “hard luxury” (watches, jewelry), fashion, cars/jets/yachts, real estate, wines, collectibles, hospitality and restaurants, it now includes a broader scope – well-being, home, travel, sport, technology, space, services, e-sports, … We moved from tangible to the intangible, with the everyday being “luxified”.
• Luxury was consuming rare materials – sometimes at the expense of our planet -, it now recycles and uses carbon-free, sustainable ones. Excess and opulence are getting out of fashion.
• Luxury was one-to-one (the fashion designer creating a dress for one client), it became one-to-few, sometimes one-to-many (how many Louis Vuitton bags are sold every day in China?), it is becoming few-to-few: clients in contact with other clients, with the brand trying to be in the middle, framing the conversations.
• Luxury was about stories. It still is, but the storyboard is shifting too: it is about impact. A brand needs to genuinely carry a positive mission (social and ecological, for the communities around, for the employees and all stakeholders), and say something beyond the products.
• Luxury was about status, you wanted to show what you owed; objects and experiences are now crafted for a better self, with more and more personalization and intimate feeling. From « you know I have » to « I know I am ».

So, where is the catch? How do I look at luxury, and brands at large? It is time for every brand to build, or revisit, their positioning on a grid that I would define around 8 different criteria: unicity, disruption, care, circularity, purpose, local, educational, human.

1/ Unique product, unique experience. I am always looking for “difference and impact”. How unique, not the best, but truly unique, is the product. How simple it is, how surprising and delightful it will be for clients. Luxury has to be a remedy for boredom.

2/ Disrupting the tradition. I wouldn’t disregard the traditional categories, like jewelry, watches, art/collectibles or fashion, but would definitely challenge how they disrupt themselves. How they are changing their business models, communication/distribution channels, branding, even product offer to full personalization, leveraging on what technology can offer: client data, supply, distant selling, or community management. Take jewelry: ancient brands are being revived, and follow up new digital native brands, lab-grown diamonds, etc. Caution! Not all DNVBs will survive, and the winners will be the ones understanding that jewelry must be creative (sustainability and cool branding is not enough), and human (digital must meet physical retail, see below).

3/ Home sweet home: I believe the trend towards care (of myself, of my body, of my soul, of my loved ones, of my home, of my puppy, etc.) is here to stay.

4/ Circularity – experiencing vs. owning. 2nd hand/preowned, rent models, consignment, sharing collections… whatever the category, we are entering an era of “buy less consume better share your luxury”. Together with this, new materials (e.g., … from faux fur to mushroom leather), new usages. The resale market, $36B by 2024 (from $7B in 2019) …

5/ What’s your purpose? What does the brand – and its founder(s), CEO – stand for? Really, genuinely, personally? Socially and environmentally. How they see diversity, how they address generational issues, trans-generational transmission. How does the brand and the product / experience will create a better future? What is the real implication on all stakeholders? To which extent the investors are ready to give up margin/profit vs. give back to a greater good, and build long term for all? WHY will I buy the product or experience the service. I need to see a brand that take a share of my heart and inspires me. “Luxury is what’s getting repaired” said Jean-Louis Dumas-Hermès, the question also being how luxury repairs the world.

6/ Local to action. Source local. Build local (“made in” is back, strongly). Serve local. Small circle. Around the corner, down the street. With a brand that encapsulates local (sub)cultures.

7/ We do need some education. I believe that brands that truly educate their clients will go quicker, because we all starve for education, for knowing more about our favorite category/brand/collection/product. Because those brands will position themselves as a reference for the category, and naturally as a leader.

8/ We are just humans. Digital / ecommerce of course… technology for the back-of-house and for customer data, but humans and humanity – artists, artisans, ambassadors/sales associates, community managers – are at the center of everything. I do not believe in any pure player which dehumanize the brand and the experience. Emotion – which is the engine of luxury branding – comes from human interactions. Even for millennials / genZ. Never underestimate the investments you allocate to people, people, people. I want to know the personal stories of the founders. I want to know to which extent they focus and interact on/with the people who make the brand around them. As a client, I want to interact, at one point, with someone real.

Meaning also that physical Retail is not dead, and I want to see what it will look like. Maybe not the same stores as the ones we have seen so far across the industry. Smaller, more intimate boutiques, providing a special experience, an emotion. Big was beautiful in the luxury world, now small and intimate are beautiful.