Coco Chanel once said, “Luxury must be comfortable, otherwise it is not luxury.”
The sentiment sounds obvious enough. Of course, truly luxurious products, experiences, and services should feel good—to the skin, the eye, and the soul. The dictionary definition of luxury, after all, is “the state of great comfort and extravagant living.”
But the idea of comfort as a necessary facet of luxury has largely been lost in the last few decades—replaced by a kind of frantic global consumption of logo-laden tokens of affluence such as designer handbags, watches, and cars.
But luxury—the word and the idea—is in a state of transition.
Classic “luxury” items remain popular with a certain segment of consumers, of course, but the market is softening for top-tier designer brands. LVMH, the largest luxury conglomerate in the world, for example, reported the slowest growth it’s seen since 2009 for the third quarter of 2015 (though revenue continued to climb). The economic slowdown in China was cited as a major reason for sagging sales by LVMH (and every other major luxury conglomerate). But more fundamental factors are also at play.
Market experts agree that the emerging luxury consumer is less interested in amassing status products than in test-driving special, singular experiences and cultivating a balanced lifestyle that includes plenty of time for family and friends. And when it comes to consuming upscale products, they’re measuring luxury more by Chanel’s yardstick than by any that have followed.
They’re asking, “Is there intrinsic value in this item?” “Am I comfortable with how and where this item was made?” “Does it feel good to the touch and the eye?” And “Does it feel like me?”
AUrate’s Reverse Radiance necklace in 18k yellow gold–plated sterling silver; $250
The Big Shift
This new outlook has broadened the very definition of luxury in recent years, says Gregory J. Furman, founder and chairman of the Luxury Marketing Council consulting group.
“Luxury’s meaning has now come to embrace a lot of things it didn’t before,” Furman says. “In the old days it was the highly expensive stuff and experiences, period. But there’s been a big shift, and luxury now includes small and personal luxuries—afternoon tea, a walk in the park at noon on a weekday, time with friends and family, a Broadway show, meditation in the morning.”
At a trade event in Paris earlier this year, Elisabeth Ponsolle Des Portes, general director of Comité Colbert—a coalition of 81 French luxury houses, including couturiers and high jewelers—told a group of journalists that the definition of luxury has evolved so much, even her group doesn’t try to define it.
“We say at Comité Colbert that we don’t provide the definition because the definition is quite personal,” she said. “What is luxury for you is not for me. My mother would have said that luxury is a nice dress and a nice jewel. I would [say] it’s time, it’s space, it’s silence.… It’s really something quite personal.”
And in our highly digital world, personal time—including tech-free time—has become a real luxury. “In every speech I give, ‘time’ inevitably is mentioned by so many people as a luxury they wish they had more of,” Furman says. “For millennials especially, this is the case. Their emphasis on family and experiences and friends is very different from what the boomers were about. They’re very social.”
Millennials graduated college during and after the Great Recession of 2008–2009, and many witnessed or experienced corporate downsizing and layoffs in their 20s—which means they generally have a complicated relationship with corporate America.
As a result, “millennials are taking all of their vacation time at work,” Furman says. “Not like the boomers.”
And with that time off, they’re eager to spend on traveling, taking classes, unwinding at the spa, and other experiences. Shopping? They still do it, but increasingly online, where they expect transactions to be quick and utterly straightforward.
Warby Parker’s limited-edition Downing 16 sunglasses in lemon; $95
Pretty on the Inside
Of course, millennials and Gen-Xers are still spending on high-end goods, including jewelry and watches. But “a brand is just the price of admission [to luxury] now,” Furman says. In other words, today’s luxury buyers require more than a famous logo to sell them on an item’s inherent worth.
Things like price transparency, responsible corporate citizenship, and ethical supply and manufacturing chains have become equally important to luxury buyers, who have more options than ever when it comes to spending.
Enter the rise of so-called premium brands. Apparel and accessories brand Everlane, eyewear label Warby Parker, jewelry brand AUrate, watch brand Shinola—much of the success of these and other next-generation manufacturers hinges on their consumer-facing transparency. They share how they price products; who makes their goods and where they are made; and how they partner with environmental, ethical, or charitable entities (all of the above have an altruistic arm). “Luxury consumers actually vet brands they buy from now,” Furman says, “and they buy with a social conscience.”
Thierry Nataf, president and CEO of Paris-based business advisory firm The Luxury Consulting Co., says people are looking for “something more spiritual” in their luxury. “When the brand is giving 10 percent of themselves to a charitable foundation, clients are very receptive to this type of approach,” he explains. “We feel it in the fashion world: There are two [luxury] camps, the logo consumer and non-logo buyer. And we see there is a non-logo consumer [base] that’s really just as big as the logo buyers. We have not seen this before.”
Flashy labels are giving way to quieter, more unusual expressions of luxury. The subtlety-loving luxury consumer “has a respect for craft and heritage and things that are artisanal and bespoke,” Furman says.
And certainly they “love to discover small indie brands that are offering something really unique,” Nataf says.
But shoppers are looking for “a real kind of luxury,” he adds, “a watch that is very unique and not like the watches around them.” In jewelry, Nataf says that same consumer is moving away from cookie-cutter high-end designs and “toward beautiful stones and more elemental” styles.
Of course, one look at the many Louis Vuitton bags and Tiffany charms in any urban Starbucks and it’s clear that big designer brands aren’t going away anytime soon. But marketers “really need to rethink luxury,” Nataf says. In sophisticated, fashion-savvy markets like New York City and Paris, consumers are “looking for a way back to a much more elegant and discreet style of luxury. This is very much in the air—they want more authentic, less superficial.”
A return to quiet opulence would be a boomerang back to luxury’s early days, when “luxury wasn’t simply a product,” writes fashion journalist Dana Thomas in her 2007 book Deluxe: How Luxury Lost Its Luster. “It denoted a history of tradition, superior quality, and often a pampered buying experience. Luxury was…produced in small quantities—often made to order—for an extremely limited and truly elite clientele.”
Hermès Apple Watch with calfskin band; $1,500
So how can fine jewelry brands and retailers best align themselves with the needs and desires of the new luxury consumer?
Milton Pedraza, CEO of the Luxury Institute, says his clients, which include Fortune 500 -companies, are “very concerned that millennials don’t have money to afford their products.” He insists that companies need to create more “affordable and starter products,” and says retailers should transform their stores into relationship-building centers and throw the hard sell out the window. “The store should not be defined as a place to buy and sell,” Pedraza says. “That’s arcane.”
Cultivating a seamless and high-touch omnichannel experience for consumers—one that prizes personalized service and ease of use—will also be central to marketing to luxury shoppers, who are looking for faster, simpler ways to get what they want (so they have more time for that yoga class!).
According to a study by Digital Luxury Group, luxury e-commerce is “projected to triple to $75 billion by 2025, with online taking an 18 percent share of total luxury sales, making the Internet the third-largest market for luxury goods, after traditional retail channels in China and the U.S.”
But luxury brands and sellers, including those in the jewelry industry, have been relatively slow to embrace technological advances—presumably in an attempt to preserve their product exclusivity. (A solution: Keep top-tier merchandise off the Web, as iconic fashion brand Hermès does with its Birkin and Kelly handbags; everything else the brand offers—including its famous silk scarves, equestrian gear, and even the Apple Watch Hermès—can be purchased online.)
Nataf says companies need to remember that “product is king” and that “promoting the dream of your brand” and being innovative in product development will pay off in the burgeoning luxury landscape.
Furman also urges brands to focus on the quality of their products—because the modern luxury consumer is, above all else, intelligent.
“The people who can afford the best of the best—the most educated, discerning buyers of luxury products and services—really can’t be fooled,” he says. “If the underlying product or service doesn’t deliver on the inherent value and quality they demand, no amount of touting it as luxury will make it so.”
Top: Coco Chanel (The Granger Collection, New York)
Five brands that embody luxury’s new, less flashy mood
The ultrahigh-end fashion label from Mary-Kate Olsen and Ashley Olsen has always eschewed obvious logos, and the brand’s understated, unembellished bags and shoes have become a cult favorite with affluent urbanites.
This online art seller has released more than 1,000 museum-quality editions by some 300 artists—iconic, established, and emerging—all shipped with an artist’s signature and a numbered certificate of authenticity. It’s the fast, tech-savvy route to filling a house with original, stimulating art.
Vertical Cluster Shield Ring in 18k gold; £4,750; pollywales.com
The jewelry designer is famous for casting gemstones inside precious metals that result in beautifully imperfect pieces she describes as “rough luxe.” As its website reads, the brand “does not seek to sell us false dreams of glossy, magazine-ready perfection.”
Sunday Riley Beauty
Beauty pro and college chemistry major Sunday Riley founded her eponymous skin care brand in 2009—and packages pure, grade-A raw skin care ingredients in unassuming little glass bottles with plain labels rather than chichi packaging. It’s what’s inside that counts, and the quality of the products backs up that approach.
Design studio Flat Vernacular specializes in luxury wallpaper made via traditional printing techniques. But its embrace of whimsy and irony means its products never feel overly precious. Busted-up old cars and “dandelion creatures” are among the firm’s many nontraditional design motifs. —EV