The luxury world is experiencing a new revolution.
Between the advent of digital, new geographical zones and the coming of age of Generation Y, people no longer consume luxury products the way they used to. Brands have to adapt to these changes.
The number of luxury goods consumers has been multiplied by 3 in the past twenty years – clearly a growth sector.
But behind this figure lies a complex reality that is difficult for brands to manage. The first aspect is geographic; this growth comes mainly from “new” markets like China (30% of the luxury market) or Brazil.
The second aspect is a generational one. These new consumers, whether they’re Eastern, Western or Latino, have a very different relation to luxury goods than their parents.
So it is essential for luxury brands to evolve with this new generation, if they want to stay in the game.
In order to better understand the relationship between young people and luxury brands, I had the pleasure of exchanging with Eric Briones, alias Darkplanneur and author of “Génération Y et luxe”.
Here is a transcript of our discussion.
Luxury is the power to say “no”
Darkplanneur: The premise that luxury is defined price is widespread, but not specific enough.
There are many factors that characterize a luxury brand as such, but I’d like to concentrate on three: rarity, savoir-faire and the power to say “no”.
Luxury brands say “no” all the time, everywhere.
For example, a genuine luxury brand fixes supply and won’t adapt its manufacturing capacity to demand.
This is especially true when the quality of the product may be affected by the quantity.
However, be careful. This power to say “no” can also bring about unfortunate consequences… Sometimes we see brands that claim “they don’t believe in digital” or others who refuse to sell online.
Generation Y: a generation of hackers
Darkplanneur: Generation Y is very different from its parents (Generation X), for various reasons.
I like to describe Generation Y as a community of hackers.
What I mean is that they have developed a talent for twisting the original meaning of things to suit their needs.
This is their way of fighting against general injustice, because they know something’s not right in their world.
9 major types of hacking have been identified within this generation (narcissism, price, guilt…)
For example, with the development of social networks and the widespread idea of “15 minutes of fame”, we tend to see this generation as very narcissistic. But this is a misinterpretation.
Behind the façade, there is a generational pride combined with a strong feeling of belonging, symbolized by “I is us” (Lea Fredeval – Les Affamés).
This generation wants to be the source of fascination, which is not the same thing.
Along the same lines, these young people “hack” guilt. They crave luxury whether or not they can afford it, and refuse to be judged for it.
In a single outfit, they are capable of mixing the most basic items with the most expensive ones. Or they will go shopping in a discount outlet, carrying a ridiculously overpriced handbag.
They showcase luxury goods because this helps them assert themselves in the world, but they play around with them so as not to appear too flashy.
Instagram acts as a peacekeeper, through “likes” and other comments.
Poor marketing has infected the luxury industry
Darkplanneur: Generation Y is familiar with all the techniques of marketing and its ecosystem. This generation is harder to trick.
However the “masstige” trends, associated with a lack of respect for the consumer, have had terrible consequences on the luxury industry.
When everything presents itself as “luxury”, very little actually is.
“Masstige” is seen by this generation as a kind of scam.
Generation Y is now suspicious of luxury brands and questions them.
The men question the value for money while the women look for bargains (private sales, rentals, second-hand purchases…)
These reflexes, previously associated with premium brands, have now been expanded to luxury brands. Amongst the most famous brands, only Chanel and Hermes are viewed differently, because they have never ceased to be totally trustworthy in their product claims.
When I buy a luxury product, the purchase experience must be perfect – unlike the trend towards “fast fashion”.
In a way, buying luxury goods has become a militant act in itself, because it is anti-waste by definition.
Fascination is the key to understanding GenerationY
Darkplanneur: Many brands have risen up against digital and in particular the social web, proffering the excuse that luxury brands don’t need that proximity to their customer base.
These brands have been slow to join the party and have misused these tools, because most of these brands don’t follow anyone.
This unfortunate misunderstanding on the part of luxury brands which makes them out-of-synch with Generation Y. These brands don’t necessarily need to be distant; they just need to inspire fascination. Each person posting on the social networks is looking for just that.
In this context, the cases of Jonathan Anderson at Loewe or Olivier Rousteing at Balmain are of great interest.
Jonathan Anderson adores digital, more specifically because it allows him to talk to a larger audience, with one prerequisite: he has to have cult status within his generation.
Olivier Rousteing also claims he likes conversing and appreciates pop culture for its “popular” element… This is a far cry from the distance we often ascribe to luxury brands.
It is interesting to note that Rousteing sees the Balmain client as a woman of power who, as a result, also inspires fascination.
This fashion designer isn’t scared of social media, because as he says himself, he grew up with Facebook, Twitter and Instagram. It’s totally logical for him to integrate them into his brand strategy.
He actually takes this one step further, by stating he believes Instagram is more influential than magazines.
In fact, the importance of Instagram in the success Balmain’s comeback is a very interesting angle to look at.
The brand has also successfully paired up with key social media personalities like Kim Kardashian or Rihanna, which has contributed to strengthening the brand’s influence on these networks.
In the end, as noted by the journalist conducting the interview, even if Balmain is a small fashion house compared with other brands, its share of voice is huge and was acquired at little expense.
One might even say that digital saved Balmain.
Luxury brands REALLY need to pay attention to Generation Y
Darkplanneur: the relationship luxury brands cultivate with their audience absolutely must evolve.
It is pretty frightening to think that many young designers see the concept of luxury as obsolete.
They fully question “Daddy’s luxury”, or luxury through material things, bottled luxury.
Like Olivier Rousteing, they have a broader vision of luxury and consequently, a more open one.
Luxury in 2015 is primarily immaterial. Today’s concept of luxury is an experience to be lived.
Generally speaking, this idea is poorly understood by luxury brands.
During the course of my participation in 60 luxury brand conferences, I’ve had the opportunity to exchange with “Y’s”, who would stay after my presentation and lament, “It’s so frustrating, because I understand all these issues you’ve mentioned but no one listens to me. I just handle reporting.”
Although luxury brands may be ready to listen, implementation is more complicated. In truth, luxury brands already have the internal resources to take up Generation Y’s challenge, but they are barely paying attention.
So, young people have precious little influence in this sector, whereas they should have a decisive role. Managers should be channeling this influence and encouraging further exploration. There’s still a long way to go…