Opinion: Hype-centric brands are out, quiet luxury brands are in

Recently, I embarked on a two-week roadshow where I delivered keynote presentations to over 1,000 ultra-high-net-worth individuals and luxury experts across Asia. The theme of the talks was about quiet luxury and how it is reshaping the luxury industry, highlighting the significant outperformance of stocks from quiet luxury brands. Both luxury clients and luxury investors are focusing on substance over show — on systematic brand building over short-term hype. The luxury sector is currently undergoing a notable transformation, shifting away from ostentation to embrace the understated. This paradigm shift, now often referred to as “quiet luxury,” is dramatically redefining what it means to be luxurious. This movement can be considered one of the most significant shifts in the luxury domain. Brands that are deeply rooted in hype culture are suddenly finding themselves at a strategic disadvantage. Quiet luxury is not new, per se. In 2009, shortly after the financial crisis, the term “stealth luxury” was born and dominated the luxury industry for about two years. This gave way to logomania, which experienced rapid growth fueled by China’s rise as a luxury superpower and the increasing democratization of luxury brands. However, in 2024, the situation is different. Markets have matured, and many luxury brands have evolved from small niche labels to multi-billion-dollar powerhouses that need a significant increase in sales and prices to maintain their high growth rates. In a hypercompetitive reality, clients have many choices, and they are increasingly choosing brands that they believe will provide lasting value. Quiet luxury champions subtlety over showiness, emphasizing the intrinsic value of brands and their products and experiences. It’s much less about the logo and more about the legacy. It’s not about the price but the storytelling, the continuous creation of desirability through cultural relevance, and ultimately the excellence of craftsmanship. Unfortunately, many overhyped brands have significant homework to do in all three of these areas. This shift is not merely aesthetic but deeply philosophical, reflecting changing consumer values towards substance, authenticity, sustainability, and personal significance over societal status. The allure of quiet luxury lies in its ability to convey exclusivity through understatement, allowing consumers to express their individuality without the need for external validation. The allure of quiet luxury lies in its ability to convey exclusivity through understatement, allowing consumers to express their individuality without the need for external validation. A paradigm shift in consumer values Today’s luxury consumers are seeking meaningful connections with the brands they desire. They prioritize brands with compelling narratives and a clear expression of core values more than ever before. And those are rare. Équité Research estimates, based on hundreds of brand and competitive audits across practically all luxury sectors, that 95–97 percent of brands today are not differentiated enough in their internal and external storytelling. This puts most brands at a significant strategic disadvantage. Quiet luxury, with its focus on timeless values, exceptional quality, and differentiated experiences, naturally aligns with these evolving consumer preferences. It represents a move towards lasting value and away from the disposable nature of fast fashion and flash-in-the-pan trends. This shift is not just a trend but a significant change in the way consumers perceive and engage with luxury. Brands like Hermès, Louis Vuitton, Zegna, and Brunello Cucinelli are clocking in all-time highs, while many others are in decline or losing momentum. The strategic disadvantage of hype-centric brands Brands that have historically relied on hype and extreme visibility yet lack differentiation through brand storytelling are significantly underperforming. The “louder is better” approach, characterized by bold logos and flamboyant or incongruent limited-edition drops, is losing its appeal among a growing segment of luxury consumers. These consumers are looking for more than just a product; they seek an experience that resonates with their personal values and lifestyle. The ephemeral nature of hype does not satisfy this longing for depth and permanence, placing such brands at a strategic disadvantage. Moreover, the digital age has democratized luxury in ways previously unimaginable. Social media platforms have saturated consumers with endless streams of content, making it increasingly difficult for brands to stand out through visibility alone. In this context, quiet luxury offers a refreshing alternative. By focusing on the essence of the brand and the quality of the products, companies can create a more sustainable and differentiated position in the market. The future of luxury The rise of quiet luxury signals a return to the core values of the luxury industry: storytelling, extreme and differentiated quality, and exclusivity. It challenges brands to rethink their approach to luxury, urging them to focus on creating genuine value and meaningful experiences for their consumers. Ultimately, quiet luxury is not just a fleeting trend but a significant paradigm shift in the luxury sector. Brands that continue to prioritize hype over substance may find themselves struggling to connect with the next generation of luxury consumers. In contrast, brands that embrace the principles of quiet luxury will likely emerge as leaders in the new era of luxury. This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders to Watch.” He serves as an executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at NYU, New York. He’s authored best-selling books on luxury management in English and Chinese, and is a respected global keynote speaker. Daniel frequently conducts masterclasses on various luxury topics across all continents. He’s a sought-after luxury expert, appearing on platforms like Bloomberg TV, Forbes, The Economist, and more. Holding an MBA and a Ph.D. in luxury management, Daniel has received education from Harvard Business School. All opinions expressed in the column are his own and do not reflect the official position of Jing Daily. Follow him: LinkedIn: https://www.linkedin.com/in/drlanger, Instagram: @equitebrands /@drdaniellanger

Opinion: Hype-centric brands are out, quiet luxury brands are in

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Published February 05, 2024

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Opinion: Hype-centric brands are out, quiet luxury brands are in