The futureof luxury

“Some people think luxury is the opposite of poverty. It is not. It is the opposite of vulgarity.”Coco Chanel

Luxury isn’twhat it used to beWhy is it that luxury brands continuing to evolve but failing to disrupt?

Mainly because there is a powerful and difficult tension between tradition, heritage and innovation. The outcome of this tricky equation is often the mindset ‘business as usual’. Traditional methods of craftsmanship and heritage are critical for a luxury brand’s DNA. In this situation, it is difficult to imagine a truly disruptive innovation that would not potentially damage brand equity. Luxury brands are understandably having a hard time, in a consumer driven world where the ability to adapt to new patterns and needs

are key. In this issue of Rewir Trend Review, we will divedeep in to the waters of luxury, with the ambition to decode the future of luxury. How companies can keep heritage alive and at the same time embrace a disruptive culture. How companies can figure out whether their products within the category is compatible with the digital space or not. And finally how luxury brands can stay relevant for the consumers of tomorrow.

Welcome to this brand new edition of Rewir Trend Review and warm wishes of Happy Holidays and a Happy New Year!

The worldis my oysterDespite major fluctuations in the global economy, growth in the luxury category is constant. Within the seven major product groups of the category (fashion, auto, property, eyewear, jewelry, beverages, beauty) there are no signs of decrease in sales, or the birth of new sub categories.

Understanding the dynamics of the luxury category is the key in order to figure out where it is heading in the future. The mechanics of the luxury category are easily understood by the four pillars above.

The future of luxuryThe rise of inconspicuous consumption within the luxury category brings out new needs, behavior and possibilities.

Giana Eckhardt, a professor in marketing at Royal Holloway, University of London, have studied this trend in Europe and the United States. But it was during a stay in China – the crown jewel of the emerging markets – that she realized that it is a major shift in consumer mindset: “China was supposed to be the land of conspicuousness, but all of a sudden people were making fun of overt wealth and even taking the labels off their clothes”. So before we

have invented the ability to travel in time – since time is the one single factor being the most sought after luxury “item” nowadays – we have to look elsewhere in order to develop new opportunities and innovations. Luxury consumers are constantly on the move, and they increasingly want brands that can cater to their needs where and whenever they want. It is not enough for a luxury brand to be selling in its own market – brands must think further and know where to target their customer globally.

Heritage (still) mattersCelebrating and promoting heritage still plays an important role in the future survival of luxury brands. Creating memorable ways for consumers to be immersed in a brand’s heritage can strengthen brand equity.

For the first time, Land Rover enthusiasts can experience the brand’s rich heritage by getting behind the wheels of some of its most historic

vehicles at a new customer facility in the UK. A variety of packages are available allowing customers to focus on a particular decade, or to journey through Land Rover’s heritage, right up to the present day line-up. The experience is different to what Land Rover has offered before, and is a great way to engage customers in the brand’s history and be a part of telling the story onwards.

Still man’sbest friendWonderboo launched mobile food trucks for dogs in June 2015. The Swedish luxury dog food manufacturer's trucks stood at popular locations around Stockholm, and offered all-natural, additive-free Swedish ingredients in regular or light versions, served in plastic boxes that functioned as both food and water bowls. The trucks, which could be located on Instagram or Facebook, also offered water bottles and poop bags. Do dogs care? Probably not, but their super posh owners do.

Exploringnew groundsChristian Dior is blending technology and couture with the introduction of virtual reality headsets in a number of their boutiques, creating an immersive 3D experience with the collection and runway atmosphere. By rolling out

‘Dior Eyes’ in a number of stores, Dior maintains its relevance and provides an elevated in-store experience. Haute couture goes digital!

Luxuryin a boxHow about subscribing to luxury items, getting an unknown surprise box each month?

Well now you can. In May 2015 luxury brand Hermès launched its new subscription service from the Petit H line, including products made from waste materials left over after the creation of other items. Aiming for conscious luxury consumers that value the brand in a new modern context. Prices ranging between $240–$580 for surprises deluxe!

Time will tellItalian jeweler Bulgari unveiled their timepiece the Diagono in July 2015. The luxury watch comes equipped with NFC technology that functions as a key to unlock a secure Bulgari Vault mobile app. The vault stores data including banking information, and allows consumers to

make secure payments, activate alarm systems, unlock car doors, access health services and check-in to Bulgari hotels. All data entered is encrypted and stored in military bunkers to safeguard against hackers. Almost like an Apple watch on steroids.

Show me yoursand I’ll show you mineA website launched in August 2015 allows US based consumers to swap unwanted fashion items using a cashless currency system. Free to join, Re/Labld is an invite-only marketplace, where customers can submit photographs and details of luxury items for collection and appraisal by Re/Labld. In exchange, customers receive instant credits which can be used to ‘buy’ other goods. Luxury re-cycled, anyone?

And who are the new luxury consumers?

01 The OmnigifterAll they want is to take care of their relatives. For them luxury is about making their loved ones happy and gifting is their natural approach to the luxury world. They are mainly men aged between 45 and 55 years old with a strong presence in mature markets. They buy jewelry, vacations and food. When buying gifts, superior quality and customer experiences are essential to them.

02 The Absolute LuxurerLuxury is their commodity. They grew up in luxury. For them, compromising is not an option and exclusivity is fundamental. This is the European elite and a happy few in emerging markets aged between 35 and 45. They buy both Personal and Experiential luxury mainly leather goods, clothing, jewelry and watches and exclusive vacations with a special emphasis on everything that is unique and customized.

03 The Mega CitierWorld is their city and the city is their world. Whether they live in New York, London, Paris, Rio, Moscow or Shanghai, they only enjoy the same tastes and holiday destinations. They transform local trends in global phenomena. They are concentrated in Brazil and China, New York or in the European capitals, aged between 30 and 35 years old. They concentrate their luxury spend on leather goods, fashion, hotels and exclusive vacations.

04 The ExperiencerLuxury is real only when shared. They share luxury moments with others. This consumer has risen from the ashes of luxury in Japan, Europe and the US, is aged between 45 and 50. They invest more on holidays, food and hotels and spending abroad.

05 The FashionistaIn fashion, they trust. She always knows what's going on. She loves design and shopping is her passport to the magical kingdom of luxury. They are mostly women aged between 35 and 40 well-represented in China, Russia and the US. She knows everything from the most famous brands to the latest star discovery. She buys mainly personal luxury items: leather goods, fashion, perfumes and cosmetics.

06 The Little PrinceLuxury is their fun. This is a generation whose parents were wealthy. They are connected and hungry for the new and colorful. They are aged between 18 and 25 and come mostly from emerging markets. They mainly buy leather goods, clothes, perfumes and cosmetics for which brand and design are essential elements.

08 The Status SeekerShowing off is their main driver. They live under the spotlight with logos in full view. They always wear known watches or accessories. They don't like experimenting and follow trends but they crave well-known global brands. They are aged between 35 and 40, mainly Asian but also American. They love to shop for leather goods, clothing usually in large flagship stores with an immersive digital experience. Celebrities and ads on TV strongly influence them.

07 The Social WearerThey believe that luxury is the green carpet to a better world. They are aged between 35 and 40 mainly from France, Germany and Brazil. Highly educated, they mainly shop for leather goods, travels and furniture. For them quality and sustainability are essential factors.

09 The ClasspirationalThey saw it on their boss and want the same thing. Their greatest fear is looking bad in front of their colleagues and friends. For them affordable luxury is the best way to be accepted by their community. They are men and women aged between 30 and 35 years old with a strong presence in South Korea, Germany, France and Russia. They prefer classic clothes, perfumes, cosmetics and bags that offer and good value for money. They compare prices online. This group is the least wealthy of all nine.

The ultimate luxury:Forever youngWhile our capacity to analyze information about health and our bodies has raced ahead, the process of testing and bringing drugs to market remains agonizingly slow. But a new category of device called “organs-on-chips” could speed up the process significantly. The development of these chips is one of many different innovations aiming to help people track their health and wellbeing. 23andme, Thync and Scio – a pocket sensor that helps identifying the chemical makeup of foods, plants or pharmaceutical drugs, helping people to avoid allergens and pollutants. Future luxury for the masses?

VirginterritoriesThe islands called “a spectacular Nordic version of Hawaii” has taken a long time to achieve such praise. The remote Faroe Islands and the rising cultural cachet of all things Scandinavian, it’s now recognized as one of the more unspoiled destinations accessible to European and American travelers. Why is that? Travelers are seeking ever more off-beat destinations, but preferably with luxury amenities, and places such as the Faroe Islands balance these desires perfectly. The law of the few, makes these destinations truly exclusive. Let’s go!

LeadershipdeluxeMixing elements such as luxury travel, far-flung destinations, high-energy experiences and curated itineraries give a brand new way of high-end management conferences. Inviting the guests to sit back and enjoy the ride, these new kind of events focus on experiences and insightful conversations – all with the aim to drive meetings

of minds and revelations. Surf summit, part of the Web summit, invites a selected few executives to the coast of Ireland with the aim to stimulate innovation through an intense outdoor program of activities. Dude, forget about corporate jets – surf’s up!

So what shouldluxury brands have in mind for the future?Here’s a thought: they should be careful and not miss to simplify their brands architecture. The reason is that consumers don’t want to deal with complications of multiple brand identities under a corporate brand. Also luxury brands should build new eco-systems of partnerships to control their brand while being more open with retailers and suppliers. With that said, they should never miss the opportunity to be a part of their consumers’ digital contexts and lives.

What is luxuryto you?In a world that gets more segregated every year, the luxury category needs to keep up with changes. 

How would you define luxury? And what is luxury to you?

If you have a minute, please click the link below and take our short survey on the subject!

Link to survey

ArchiveRewir Trend Review #07: Re-inventing life on planet earth [2.0]

Rewir Trend Review #06: Food – getting more serious than ever

Rewir Trend Review #05: How does retail of today keep up with the consumers of tomorrow?

Rewir Trend Review #04: Here, there, everywhere. Place branding is going places

Rewir Trend Review #03: Face to face with wearable technology

Rewir Trend Review #02: Ready to redefine the dimensions of demography?

Rewir Trend Review #01: Exploring the frontiers of brand innovation

Behind this issue

David Lillewarg, Editor in Chiefdavid.lillewarg@rewir.com

Liselott Törngren, editorial contentliselott.torngren@rewir.com

Helena Brauer, content designhelena.brauer@rewir.com

Madeleine Tönurist, content distributionmadeleine.tonurist@rewir.com