design:retail - June 2017 - 50

050

oday, we live in a dislocated world where
there is a growing disconnection between
luxury brands and
consumers. Economic
shocks, political uncertainty and reduced demand in emerging
economies have curbed years of boom in the
luxury industries. Growth for 2017 is expected
to remain rather flat.
Underlying the seismic shifts in the luxury
market are evolving consumer dynamics with
the proposition of luxury itself. The easiest
way to observe this shift is to look at the discrepancy in the relationship Baby Boomers
had with luxury and that which Millennials
and Generation Z are having with luxury. New
need-states are emerging, and many heritage
luxury brands are challenged with evolving
their proposition.
Luxury was once built around the desire
to express worth to ourselves and to others.
L'Oréal's timeless tagline, "Because I'm Worth
It," encapsulated the Boomer need to "keep up
with the Joneses." It was a simpler time, and
the goal of luxury was rather singular: to message
a higher station in life to anyone willing to take notice.
The recent problems at Ralph Lauren symbolize the antiquated
nature of this philosophy, as kids today are not romanticized by the
country club set. It is simply not a motivating concept. According to
RTG Consulting, "about 62 percent of Generation D (as in digital, those
under the age of 20) no longer equate success with financial wealth."
This begs the question, what is success equated with, if not luxury
and wealth? As the architects of Wall Street, Boomers are tied up in
the outward markers of luxury as proof points of their earned or inherited status.
Today, with more Millennials than Baby Boomers in the workforce
(according to Pew Research) and Generation D quickly making their
mark, there is a clear transition from what luxury meant to what it
means today and will mean tomorrow. That meaning is less singular
and, instead, much more complex, elusive and abstract.
"I think the new codes of luxury are being defined by the next generation that want to spend their money on a sneaker, a T-shirt or a
fun handbag," says Stuart Vevers, creative director, Coach. "They want
something that reflects their lives and personalities, but still has the
fantasy of fashion."
According to Leanne Wierzba, co-curator of "What is Luxury?" from
the Victoria and Albert Museum in London, "The shadow of the 20th
century is forcing this realization that we have to form other types of
values. These values are no longer centered around the individual or
conspicuous consumption or having more and having the best."
There is a new value system emerging that has splintered the notion

JUNE 2017

DESIGNRETAILONLINE.COM

GLOBALSHOP.ORG

of luxury into a kaleidoscope of experiences and associations more
closely related to access, freedom, privacy, humanity and legacy than
elitism, status, image, brand and heritage.
Considering that "85 percent of luxury spending will be by
Generations X, Y and D by 2025," according to Cara David, managing partner of YouGov, luxury brands will need to embrace this new
value system to align their brand ethos and pipeline with the future
luxury consumer.
Here are some of the norms we can (and should) expect:

ACCESS OVER ELITISM
We live in a post-ownership age, where access to highend experiences, material goods and destinations are more
commonplace. This form of access mingles UHNWI (ultra
high net worth individuals) with those who reside closer
to the middle. As a result, the value of luxury is coming into
question. The standing argument is that the more accessible
a luxury experience is, the more the dream, and subsequent value, of
luxury is destroyed. But, the access we are afforded in the digital age is
changing that positioning. With 60 percent of luxury purchases influenced by digital channels, according to Boston Consulting Group, we
must recognize that access is the key, not the barrier, to success.

FREEDOM OVER STATUS
In a cashless, digitized world, true luxury is
found in the feeling of being unburdened. Why buy
when I can rent? Why drive when I can Uber? Why
live in a big house when I can buy a tiny one and
travel the world? There is a more tangible aspiration
tied to the untethered feeling of freedom than to the weight of objects
associated with status. This also aligns with a younger mindset riddled
with agile identities. Consumerism can feel like a weight to be carried
when really, younger consumers are not embracing debt. According
to The New York Times, "households helmed by someone 35 years old
or younger currently hold the lowest level of credit card debt since the
Federal Reserve began collecting standardized data in 1989." People
assume that Millennials are reckless with money, but the trajectory
tells us a different story. Younger Millennials and older members of
Generation D-those ages 18-24-save a quarter of their salary each
month, according to a recent study by Experian.

PRIVACY OVER IMAGE
In uncertain times, intangible values-such as privacy
and security-are starting to fill up the vessel of luxury, as
these modern needs are becoming more exclusive and
valuable unto themselves.
A recent article in The New Yorker shined a light
on how the notion of survivalism has expanded to affluent leaders
in Silicon Valley and New York-think technology executives and
hedge-fund managers. These cohorts are preparing themselves for
the worst, buying islands and furnishing them with the necessities
of modern private living. Talk about luxury.
Furthermore, the term "stealth wealth" has come to define consumers

http://www.DESIGNRETAILONLINE.COM http://www.GLOBALSHOP.ORG

Table of Contents for the Digital Edition of design:retail - June 2017