The month of December is traditionally one for giving and receiving gifts. It seems fitting then, as I try to select the perfect present, that I’ve spent most of the month addressing the question “What is Luxury?” (see “Is the term “luxury brand” overhyped?” and “More on What is Luxury?“).
We may have to leave the year with the question unanswered, or at the very least, we may have to settle for a paradox, according to a recent article in The Economist: “The Modern Luxury Industry Rests on a Paradox.”
I thought it fitting to wrap up the year with this article. It covers all aspects of the luxury question from many perspectives: age, geography, politics, world events, and social climate.
Globalization– The luxury market continues to expand around the globe. It’s not a surprise to encounter luxury brand names in relatively poor countries with struggling economies. But Europe still runs the luxury show: “its brands account for 70% of the world’s luxury consumption. Germany matters in cars and yachts, but the real powerhouse is Italy, which serves as the workshop for French fashion and leather goods as well as its own.”
Democratization– When Coco Chanel first introduced her famous perfume, she reserved it for only her best clients. Now you can buy it on Amazon. Many brands, some successfully some not, have tried to walk the line between exclusivity and broadening their audience. Others have created lower cost brand offshoots – think Marc Jacobs versus Marc by Marc Jacobs.
Perception – Political disruptions, ebola outbreaks, falling currencies have caused some Prada pocketbooks to close – at least for luxury products. There is an oncoming shift from having “things” to having “experiences” as a younger generation favors subscription services over ownership. Luxury vacations, hotels, concierge services, etc. are enjoying increased growth.
But still there’s no definitive explanation of what luxury is. According to The Economist:
luxury’s boundaries are fuzzy and hotly disputed.
With all the questions about product pricing, ethical sourcing, marketing, globalization, social networking, image, etc., one thing rings true for luxury this year, for the years past, and for the years to come. It’s the one thing that never changes in all the definitions of luxury ever I’ve seen…
It’s all about that service!