Quiet Luxury vs. Conspicuous Consumption | |
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“Luxury brand executives increasingly need to learn about an expanding number of factors that interact – and possibly conflict – in shaping consumption. At the heart of it is the need for status, a deeply ingrained and often unconscious force guiding thoughts, feelings and behavior about luxury brands,” said Professor David Dubois, INSEAD.
Resolving The Tension Between Quiet Luxury and Status-Seeking Conspicuous Consumption
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A New York minute ago, quiet luxury replaced conspicuous consumption and became all the rage. Now it’s retreated from the headlines with fashion insiders rejecting the phrase as too overused: “An overly TikTok-ified way of describing classic, refined clothing,” the Wall Street Journal reports. Italian designer Brunello Cucinelli, who fully embraces the trend if not the terminology, prefers the phrase “gentle luxury.”
No matter what you call it, luxury that is quiet, gentle, and inconspicuous is shaping the near future for luxury brands. The trend is marked by downplayed elegance, along with the traditional requisites of expert tailoring and craftsmanship, the highest-caliber fabrications and materials, and elevated personalized service. Quiet luxury renounces prominent logos and ostentatious displays of wealth by embracing the understated luxury fundamentals of quality with a capital “Q.”
Yet, under the surface, the status that luxury brands represent still exerts a strong pull for many consumers – if not most. Entitlement and social status, referring to one’s rank or position within the social hierarchy, play a pivotal role in one’s self-identity. Owning and wearing luxury brands is an outer-directed expression of personal identity and values.
In other words, identity has both intrinsic (self-expression) and extrinsic (status) components. As Chris Gray, the Buycologist, says:
“Luxury purchasing is an interplay of status and self-expression, not either/or, but both. The brands you buy reinforce your sense of self within different social contexts and situations. Nobody will look down on you for buying something for quality. Unlike status, quality is the one people will fess up to.”
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Luxury industry insiders suffer from the "Street Light Effect" cognitive bias. They are looking for innovation where its easy and where every one else is looking, instead of where real innovation is likely to be found.
Get Your Copy Of The Industry Insiders' View on the State Of Luxury
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What do luxury industry insiders say about the state of the luxury business? How do they view the normalization currently underway? How can brands set strategies, including advertising and marketing, for the period ahead as some luxury companies such as Chanel, Hermès and flagship brands within LVMH blow past others?
Now in its seventh year, the State of Luxury: An Industry Insiders’ View report is one of the most reliable barometers of corporate-side attitudes to customer demand for luxury goods and services.
This year's study pulls together first-hand responses from nearly 450 executives worldwide across diverse luxury sectors to portray a picture of the opportunities and challenges luxury companies face in the rapidly evolving industry, making the report indispensable for luxury businesses.
Explored in the report are current and future business conditions in the luxury industry, including perspectives from those operating in the luxury goods and luxury services and experiences sectors.
Of special emphasis in the study are innovation and advertising and marketing strategies that work and do not work in the current market and how companies can adapt as the market normalizes after the disruptions caused by the pandemic.
The 100+ page report in easy-to-digest Powerpoint format covers:
- State of the luxury goods sector, company growth and distribution strategies
- How luxury services and experiences are evolving with customer expectations
- Advertising and marketing strategies that resonate with the market, including company and agency-specific perspectives
- Business outlook for the luxury market, both for the industry as well as the executives’ own company
It tracks trends from last year to this year and includes both data and expert analysis to make the research actionable so it isn’t just another report on the shelf but a resource to guide corporate planning and strategies.
At its core, the report is a collaborative effort for luxury industry executives to share, learn and help each other as the business environment becomes ever more complex and challenging.
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“For affluent consumers, luxury is a privilege, not a right, and as they look at the challenges they and the world at large face this coming year, they are signaling a willingness to trade off excess spending on luxury. Many plan to batten down the hatches and ride out any potential economic storm, as they did in the Great Recession of 2008 and 2009,” said Chandler Mount, Affluent Consumer Research Co.
Luxury Brands Must Prepare For A Reset:
Here's The How And Why
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Over the last three years, the luxury market has experienced a whirlwind of change. After rising 7 percent in 2019 before the pandemic, it suffered a steep decline in 2020, only to bounce back with spectacular growth through 2021 and 2022.
Bain-Altagamma expects the good times to keep rolling in 2023. “The personal luxury market is projected to see further growth of at least 3-8 percent next year, even given a downturn in global economic conditions,” they predict.
However, since the past is often the best predictor of the future, a different outlook is suggested based on results from the Great Recession of 2008 and 2009. Global personal goods luxury sales dropped 9 percent from 2007 to 2009, disproving the conventional wisdom that the luxury market is immune to economic downturns.
Whether the economy takes a slight tumble or a big fall in 2023, more economists are warning about an economic downfall that will impact the luxury market too. Analysts are warning of a potential " Richcession."
To prepare the Washington, DC-based Affluent Research Company has just published a new study among 2,000+ affluent consumers, called Research The Affluent Luxury Tracker. It provides a forward look at how the affluent will adapt their spending and purchase behavior if the economy falters, which they fully expect it will.
“Affluent luxury consumers are the most highly-educated and well-informed consumers, and some 69 percent see a recession coming within the next six months, if it isn’t already here,” said Chandler Mount, the study’s lead researcher.
“Anticipating the worst, the affluents aren’t waiting for the other shoe to drop. Nearly half (48 percent) surveyed said, ‘Now is a good time to limit my purchasing,’” he continued, noting that the survey sample was skewed heavily toward high-net-worth-individuals (HNWI) with $1+ million net worth (excluding their primary residence), a notoriously difficult consumer segment to survey.
Not unexpectedly, the HENRYs, with less than $1 million net worth, were more inclined to cut back (52 percent). But even 46 percent of the HNWI are lining up to reduce their purchasing. This will pose significant challenges to luxury brands that depend upon the HNWI’s greater spending power if they do pull back.
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“A groundbreaking and truly exceptional instruction manual offering a wealth of marketing insights and information, Meet the HENRYs is impressively well written, organized and presented, making it highly recommended.” writes Midwest Book Review.
Meet the HENRYs: The Millennials that Matter Most for Luxury Brands
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Meet the HENRYs breaks new ground by uncovering a new target consumer--Millennials with money.
It's a segment of the largest generation of Americans with more discretionary income than the rest of the cohort today and poised to acquire more money in the future.
These are the millennials that matter most to brands today and tomorrow
For the foreseeable future, millennial HENRYs (High Earners Not Rich Yet) will be the consumers that every brand manager, marketer and retail executive will need to know well.
This subset of the largest generation of Americans, earns between $100K and $250K–the income cohort that accounts for 40 percent of all household spending. Most important, however, these are the consumers who are on track to become the ultra-affluent ($250K +) of the future.
This forward-looking book examines trends and profiles emerging disruptive brands that millennial HENRYs are drawn to, and explains how many of these innovative brands are setting themselves apart from the traditional top-tier luxury brands.
It takes you on a deep-dive into the steps the smartest of the traditional luxury brands and retailers are taking to keep up with a new generation of consumers who are anything but traditional in their approach to luxury spending.
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Unity Marketing | 717-336-1600 or pam@unitymarketingonline.com | | | | |
