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Redefining Luxury In A Changing Marketplace
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Redefining Luxury In A Changing Marketplace

Why has the luxury market outperformed, despite dismal economic conditions?

Holmes Report

Luxury as a concept has come under increased scrutiny since the economic downturn set in five years ago, but surprisingly the luxury market has outperformed others, defying the trend and showing tremendous resilience.

To better understand why this is the case, Agence Elan recently held a discussion that featured experts from L'Oreal, Sofitel and Re-Up, along with senior correspondents from the W Magazine and the Wall Street Journal.

Why and how is there a renewed and growing interest in luxury over the past five years? What challenges and opportunities does digital and social media present for brands that celebrate heritage, craftsmanship and traditional values of class and quality? And how does the luxury market commensurate the need for globalization and a growing appetite for luxury in new areas of the world, while retaining its exclusivity?

What we now consider luxurious has evolved to so much more than expensive products. Luxury is not just a market, a product, a lifestyle… but an aspirational value, an ‘art de vivre’ as the French say.

All parties agreed that a need to consider all aspects of the ‘universe’ of a luxury product was paramount in order to effectively translate that product to a consumer market. This is, for example, a cornerstone of a modern hotel’s success. This means direct involvement with experiential campaigns, and storytelling that involves all aspects of the brand’s world.

However, although the approach should always be comprehensive and cross-platform, the products themselves are discovered to be returning to a more simple design aesthetic, and in turn, so are the brand stories. Heritage and authenticity were named as the most important factors in creating involving luxury branding. 

The result of this has been a move away from bling and showing off and towards craftsmanship and longevity being observed by all. This means authentic materials which are impossible to counterfeit, over logos and ‘add-ons’, and involving centuries-old practices in production which give a sense of timelessness. Gone are the days of galas and fanfare. Indeed, bling is not what the real aristocracy believe to be luxury. Bling is considered vulgar, and we are actually returning to the original definition of luxury: subtle but careful quality, which is priced at a premium because it deserves to be so.

Another challenge is the digital age: how to combine access-all-areas social media with the traditionally exclusive luxury industry? These two worlds seem to be at counter-purposes with each other, but the age in which we live necessitates the luxury market’s acknowledgment of digital.

We live in a world of bloggers, Twitter and immediate-access, bitesize information. The answer is simple: the evolution of these traditional luxury houses, so that they accept digital practices and treat them as integral to any brand identity, and not as the gimmick they often do.

It was generally acknowledged amongst our speakers that the larger the business, the more difficult to effectuate real and honest digital change. Older houses are still sceptical of devaluing their claim on exclusivity.

What needs to be recognised is that digital is not about the chosen platform, but about a culture of communication, whereby brands can exchange with communities that would otherwise pass them by 'like ships in the night.' Louis Vuitton was praised for its willingness to be involved with other communities than it’s own, such as new contemporary art fans with its work with the Chapman brothers.  Digital is not about direct click sales – it’s about letting customers dream that they are part of the brand universe.

There remains a faith in European luxury, the ‘old money’ of the industry, and the quality of craft and service most particularly associated with 'made in France' and 'made in Italy'. The traditional artisan practices that these countries employ, which meet naturally with the renewed focus on heritage and craftsmanship, suggest that Frenchness or European-ness, is a state of mind. To use it effectively and authentically a brand must be prepared to translate the story market by market.

For L’Oreal, the brand’s French heritage is important for holding up status, but that does not mean they focus only one Paris.  Whilst a strong sense of a brand’s roots is always important to its identity, it must not alienate it from the rest of the world.

What the evening’s discussion really came down to was a shifting perception of luxury. Gone are the vulgar excesses, which clash so unfavourably with our new outlook on spending post-downturn. The return to original practices and focus on luxury materials has reinstated luxury items as part of an aspirational value, a belief in longevity and quality, as far removed from the bling of before as possible.

It is this replenished interest that has been harnessed by the most astute luxury brands, which makes the competition to prove one’s luxury status in a market saturated with luxury boutiques and production values all the more fierce.

Jennifer Attias is UK managing director at Agence Elan.

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