Simplicity and Timelessness: Zooming in on Quiet Luxury and Circularity.

As economic uncertainty and higher inflation are gnawing away at the spending power of aspirational customers, the truly wealthy remain insulated from these woes. They continue to spend, but their splurges are motivated by top quality, casual elegance, understatement and investment value, across apparel, leather goods, or jewelry. The continued demand from wealthy customers at the top echelon of luxury brands and the recent Q3 earnings resilience of several brands, including Cucinelli, Zegna and Hermès is quantitative confirmation of the strength of understated luxury and somewhat of a bright spot for luxury.

It is, therefore, not surprising that Gucci’s hotly anticipated turnaround collection “Ancora” eschews flashiness and opulence in favor of minimalism and understatement.

The above leads us to draw several conclusions. Here are 3 of them:

1.? Quiet Elegance Trumps Flash

Luxury customers are looking for the highest levels of craftsmanship, quality, and rarity and are still willing to pay top dollar for this level of luxury. The key words are “quiet elegance”, eschewing any signs of flash or opulence.

2.? High-end Positioning as Crisis “Immunity”

Brands catering to a very high-net-worth clientele as their core focus with assortments that have no entry-level products have the pick of the market share right now.

3. Chinese Customers are still into Luxury – the Quiet Kind

China’s own luxury brands are embracing a similar aesthetic, Icicle and Erdos being perfect examples of the future of Chinese homegrown luxury brands.

Read the full 'Less Is More: Quiet Luxury Has Not Lost Its Luster' insight here from Silvia Coleman and Georges Al Feghali.

Taking a cue from the Certified Pre-Owned car sale model, premium and luxury brands have adapted this circularity model to bring pre-vetted luxury resale in-house. This is a strategy that aligns true sustainability, giving pre-loved products a new life, with a brand-controlled business model.

While we are used to seeing both resale and rental within third-party models, luxury brands are actively bringing these circular business models in-house. This allows them to exercise crucial control over price, distribution, and messaging.

This “pre-loved” trend is going beyond online to brick-and-mortar stores. For example, Loewe has opened a Re-Craft store in Osaka, offering a range of repair and maintenance services for its leather goods, in addition to the sale of repurposed items.

If executed correctly, these innovative strategies around circularity can bring significant value creation to brands and customers, not just in terms of revenue generation, but also quality of experience and originality.

Read the full 'A Fresh Take on “Old” Things' insight here from Silvia Coleman .