The Future of Luxury, pt. 2

“Luxury is not about the things that you own. It is about something that reflects your personal values, something that shows the choices that you have made in your life. “– Marcel Wanders

Despite the recent Omicron surge, it looks like we are over Covid. The Pandemic is now an endemic condition. Until the recent news from Ukraine and the volatility in the markets, the Retail and Travel sectors were beginning to show signs of a bounce back.

Luxury companies were showing off their impressive profits during another difficult year.

Yet supply issues prevail. Some luxury companies are still more exposed to upcoming supply-side problems. Hermès posted a decline in sales growth due to production issues since many of their products are reliant on handcrafted methods.

Consumer behavior has changed as has the ideal customer for luxury brands. In 2022, it is the CBD-infused, stay-6ft-away-from-me, Generation Y with its laid-back attitude that drives Luxury sales.

For this consumer, owning a Luxury product no longer communicates class or even privilege. It does not announce the taste of the owner; it only acts as a display of financial ability. Luxury and privilege insulate, and for this group, insulated Luxury is an outdated concept.

Even advertising luxury goods has taken a pragmatic approach. I call it, Anti-Seduction. Seduction was replaced by safe, organic minimalism. Now luxury brands are eager to show off their ecological manufacturing methods.

Luxury is leaning towards the future. Here are the newest Luxury trends that are poised to have lasting influence:

The Metaverse?

The newest “Wild Frontier” for luxury brands and the buzzword that has the advertising world full of excitement.

We are beginning to imagine the potential of this new technology, of endless virtual worlds where our avatars access alternate realities. We are poised to live in many idealized versions of ourselves, owning non-physical objects, trading digital art, vacationing in algorithmic islands of exclusivity where we can interact with other bots.

A non-physical, ever-changing world of possibilities is a wet dream for advertisers and brands where the investment is technological rather than physical. Gucci led the pack by buying digital land on The Sandbox and announcing a collaboration with gaming platform Roblox. Balenciaga dropped a collaboration with Fortnite. Other RPG (role-playing games) opportunities are set to spawn Luxury megabrand counterparts.

How this affects the perception of physical Luxury for the consumer, is yet uncertain. A target consumer for the Meta-Luxury prefers to stay home, exhibits age-related body dysmorphia, attends a virtual party (a METa-Ball, perhaps?), from the safety of their (physical) home.

The Swap?

Did you happen to catch the Fendi-Versace collaboration last year? Kim Jones and Silvia Venturini Fendi collaborated with Donatella Versace on a mashup of the two iconic brands. Balenciaga and Gucci did the same for a sold-out capsule collection.

While we predicted this collaboration exchange in a past article, this is still the beginning of a new cross-marketing trend for Luxury brand fans. There will be a few exceptions — Armani won’t be collaborating with Balmain, for example — but, this continues to be a boon for PR and sales.

In this friendlier brand space, it is Collaboration rather than Competition that might prove to be the enduring trend.

Billionaires in Orbit?

Calling all space-cadets: Virgin Galactic is already having a great year! Between invading the Metaverse and visiting the upper atmosphere it is evident Luxury is trying to escape the planet.

Our ennui will be cured by other-worldly experiences since we’ve seen it all and done it all before. From that vantage point, we can see fields of green, red roses too…

Space tourism will affect the future of Travel, never mind the ecological ramifications of rocket fuel. We are in a quest to expand our vision, internal and otherwise. The bragging rights of spending a few moments in orbit far outweigh any qualms we have about saving the environment.

Microservices

On the other end of the universe is the concept of Microservices: small touchpoints with big impact. Microservices expand brand reach in the micro- but also in the macro-level when they are part of a bigger strategy. Without having to reach for the stars, luxury brands leverage their tech stack and expand customer contacts.

While designed for e-commerce architecture, microservices can be developed, scaled, and deployed bridging the digital with the physical worlds, and they are ideally suited for luxury brands.

The Five Principles of Microservices

* A microservice has a single concern.?

* A microservice is discrete.?

* A microservice is transportable.?

* A microservice carries its own data.?

* A microservice is ephemeral.

These principles can become guidelines for brands to provide the next generation of Luxury. We already see signs of this strategy in Luxury Hospitality, Horology, and Automotive.

We are at the threshold of exciting albeit scary times. Are you a brand manager for a Luxury Brand? How are you positioning your brand for the Future of Luxury?

Simoudis I D develops brand identity, brand strategy, and digital marketing programs for exceptional brands. Our publication, Luxe Trends, provides expert Monitoring, Analysis, and Curation of the Luxury industry.