Beyond goods, services and experiences, freedom will become the ultimate signifier of status.
In essence, luxury is about status, playing to that fundamentally human need to communicate who you are and how you fit into the social hierarchy. Through the ages and across cultures, status has been expressed in a multitude of ways, from the tone of one’s complexion to the size of one’s kingdom. But fundamentally, signalling status has long been about possessing something that is widely regarded as both valuable and rare.
For most of their existence, luxury brands as we know them today have traded in physical goods they presented as valuable and scarce. And as many of these same brands were acquired by large conglomerates, grew multi-tiered product pyramids and significantly increased sales volume, millions of consumers bought into the narrative, marking momentous life achievements by the acquisition of material things whose symbolic value meant so much more.
One’s first Mercedes-Benz car, Rolex watch, or Louis Vuitton handbag served as an important totem, a not-so-subtle indicator of one’s social circle, an announcement that you had arrived. Physical luxury goods were the most common proxy for status.
But as dual income families proliferated, so too did the ubiquity of another kind of luxury. Services such as housecleaners, gardeners, nannies and private schools flourished as privileges — once reserved for the upper-classes — became de rigueur for a generation of baby boomers hungry to achieve and amass more than their parents.
Physical luxury goods were the most common proxy for status.
Today, luxury is evolving once again and brands are wrestling with the fact that consumers are increasingly shifting spend from products and services to experiences. This is especially true among young consumers in the West. According to a 2018 Harris Poll study of US millennials, 78 percent say they’d rather spend money on a “desirable experience or event over buying something desirable.”
For a generation that marks every meaningful moment in their lives on social media, this makes sense. Experiences, not products, have become the primary social currency for this cohort. Status is increasingly measured less by what you own and more by where you are, who you’re with and what you’re doing. And if it isn’t on Instagram, it simply didn’t happen.
Many luxury brands are still working out how to adapt to this trend. But our most current research indicates another profound — and far more complex — change ahead for luxury. Everything we see points, at least in the West, to an emerging conception of luxury that may be infinitely more difficult to package and sell than previous incarnations. It’s a future beyond luxury goods, services or even experiences. As we see it, the emerging definition of luxury is freedom. Freedom, in all aspects, will become the ultimate signifier of status.
About a third of millennial households in the US were affected by divorce. Even today, “grey divorce” continues to disrupt their family lives. And while they are the most educated generation relative to previous cohorts, their opportunities were severely hobbled by a recession they had no hand in creating, crippling their early career opportunities. As a result, they have less wealth and more debt than their parents at the same age, and are far less inclined to serve as indigent slaves to luxury idols.
Freedom is by far becoming the rarest and most valuable commodity one can now attain.
Instead, they are seeking freedom. The freedom to live where they want and work close by. The freedom to not work at all but to perhaps travel, to pursue passions or to volunteer. The freedom to pull up stakes and move abroad. Freedom from debt. The freedom to go off the grid, to exit the matrix. The freedom to have children without a partner or to partner without having children.
Freedom, in every form, is what this generation most desires. And it is freedom that is by far becoming the rarest and most valuable commodity one can now attain.
How should luxury brands respond? Some, like Gucci, are doing a better job than others in courting young consumers. But looking forward, luxury brands across categories will need to consider whether the things they currently sell are truly compatible with this powerful desire for freedom, or if they’re destined to remain the very antithesis of it.
Can they offer status free from servitude? Can they deliver identity while also promoting individuality? Can they capture the hearts of a new generation while affording them the freedom they so desire?
Credit: Business Of Fashion – Click here to view the article
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