A week in an intensive luxury disruption masterclass — with a focus on Gen Z, technology, lifestyle shifts, and Web3, discussing a variety of themes from luxury NFTs, DAOs, and social+ platforms — was a primer for Gucci’s latest push of the luxury envelope. I remember spending the last two years discussing with jewelry brands the need to think differently and to anticipate the megatrends of health, connected devices, and a more nomadic lifestyle as a result of the death of the office.
While a lot of — especially younger — managers understand the need to change in a rapidly changing environment, many others still apply a traditional lens to traditional categories. The problem: the real estate for watches and jewelry is limited.
We have two arms and two hands, and most people don’t wear more than one or two rings, and very few wear more than a watch. This means that the rapid growth of connected wearables is a threat to both traditional watch and jewelry brands.
The current exceptional growth, especially of watch brands, may signal at first glance the top players are safe. However, the better wearables become, the more they will occupy our limited real estate — slowly reducing the use opportunity for traditional jewelry. Hence, complacency is not an option.
Gucci’s latest collaboration with Oura, therefore, is a strong signal that luxury brands are waking up. In my Jing Daily Future of Luxury column last week I spoke about the need to rethink savoir faire in a different way, and Gucci’s move confirms it.
Teaming up with one of the most trending brands in connected health tech and launching a Gucci branded Oura ring makes absolute sense. It also shows that luxury brands will need to rapidly add tech capabilities to their playbooks in order to serve the digitally native Gen Z.
The organizational capabilities that are needed are dramatically different from the capabilities brands have today. In fact, when I observe many of the metaverse projects we are involved in and when I discuss with both sides — luxury and tech brands — there is a common theme.
Luxury brands don’t understand tech, and tech brands don’t understand luxury. This renders many initiatives dead on arrival. They either miss the mark for the targeted audience, or they are off-brand. Both are costly — particularly in brand equity. The recent move by Balenciaga (with a metaverse game that attracted almost no audience) is a warning sign for others. Gen Z is extremely brand savvy and missteps in the tech or metaverse field can cost brands the credibility of the generation they target.
Gucci‘s move is clever. As a brand that does not have a significant footprint in jewelry, the collaboration offers a significant growth opportunity. Collaborating reduces the risk of being off the mark with an audience that knows everything and that scrutinizes brands to their core.
Other luxury brands should take notice. The move into tech is a strategic necessity for staying relevant to Gen Z. However, strategy is critical. Too much is at stake.
This is an op-ed article that reflects the views of the author and does not necessarily represent the views of Jing Daily.
Named one of the “Global Top Five Luxury Key Opinion Leaders to Watch,” Daniel Langer is the CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the executive professor of luxury strategy and pricing at Pepperdine University in Malibu, California. He consults many of the leading luxury brands in the world, is the author of several best-selling luxury management books, a global keynote speaker, and holds luxury masterclasses on the future of luxury, disruption, and the luxury metaverse in Europe, the USA, and Asia. Follow @drlanger