Opinion: How luxury can stay ahead in a changing world

The luxury industry is witnessing a transformative shift, reflected in the divergent development of brands over the past year, with some reporting stellar performances and others dramatically declining. There has been a recalibration of values where the tangibility of high-quality materials, savoir-faire, and exclusivity has merged with the more intangible yet potent concept of cultural capital. This shift — especially prominent in the age of Generation Z, social media, and influencers — forces brands to explore a more personal, emotional connection with luxury, one that resonates deeply with today's discerning clientele. It explains why many legacy brands suddenly drop in desirability, as this transition requires a profound pivot in brand strategy and experience execution. Core values and cultural capital: A new frontier Humans always follow other humans. And given the significant amount of time we spend online — Équité Research estimates that Gen Z spends 7 to 9 hours on their screens daily in 2023 and that 10 percent of our lifetime will be spent on social media — the desire to follow humans and create human connections has never been higher. Therefore, it is logical that in this digital age where social media platforms and influencers shape our perceptions and desires, creating and sustaining cultural capital has become crucial for luxury brands. This isn't merely about influencing consumer behavior; it's about crafting a narrative that resonates on a deeper, more emotional level. Brands that succeed in this endeavor are those that understand the art of storytelling in a client-centric way, translating their vision into a compelling narrative that engages and inspires. Being clear about the core values of a brand — and not defining them merely through buzzwords — is non-negotiable. Équité Research estimates that up to 98 percent of brands today are not expressing their core values in a way that resonates enough with their target audiences. Consequently, millions of dollars in growth and profit potential are left behind. Brands that could easily strive are declining. About 98 percent of brands today are not expressing their core values in a way that resonates enough with their target audiences, meaning millions of dollars in growth are left behind. The rise of quiet luxury Quiet luxury, while not a novel concept, has taken center stage in this new era, marking a recalibration of client expectations towards higher expectations of craftsmanship than ever before. This subtle yet powerful form of luxury is less about ostentation and more about understated elegance and impeccable quality. It’s about expressing core values through products and experiences that are wowing the audience. It’s about the meticulous attention to detail, the relentless effort of unique expertise and artistry, and the dedication to perfection that is required in today’s reality. Personalization and exclusivity: More than just buzzwords In this context, personalization and exclusivity still hold their revered places but are now infused with new meaning. Exclusivity is no longer just about rarity; it's about offering an experience so unique and tailored that it becomes irreplaceable. Personalization, too, has evolved beyond bespoke offerings to become a holistic approach that considers the individual's desires, aspirations, and values. Exclusivity is about offering an experience so unique and tailored that it becomes irreplaceable. The emotional connect: Luxury as an experience Today’s high-net-worth individuals and luxury clients seek more than just a product; they seek an experience that stirs emotions, a connection that goes beyond the material. This emotional connection is what transforms a purchase into a cherished memory and a story worth sharing. It’s bringing the human factor back into luxury. Luxury brands, therefore, must create experiences that not only dazzle but also touch the heart and soul, leaving an indelible mark on the consumer's psyche. At a recent luxury hospitality conference in Los Angeles, I warned brands that, in most cases, the single person their organizations forget to serve is the guest. Businesses and categories that are highly dependent on operational excellence, like hotels and airlines, often fail to put their guests really at the center of attention because of the complexity of operations. It’s a major vulnerability for the future success of luxury brands when it comes to experience creation. Crafting the future of luxury It becomes evident that the future of luxury lies in the delicate balance of ultimate artistry, unforgettable experiences, and the creation of cultural capital through strong brand storytelling. It's about understanding the nuanced needs of today’s consumer and responding with offerings that are as emotionally engaging as they are physically exquisite. In this journey, luxury brands are not just selling products; they are curating perpetual extraordinary experiences, crafting desire-inducing stories, and touching lives. I often say that luxury is akin to a romantic relationship. When done right, clients fall in love, but with the consequence that brands need to nurture the relationship to avoid a breakup. The call to action for brands is to embrace the evolving ethos of luxury. Brands must delve deeper into the emotional landscapes of their consumers, crafting experiences that resonate on a personal and emotional level. This journey requires a blend of innovation, authenticity, and a profound understanding of the shifting paradigms of desire and value. The brands that respond to this call with agility and vision will not only capture the hearts and minds of their consumers but will also pave the way forward, defining the future of luxury in an era where every detail, every story, and every experience counts. 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.” Executive professor of luxury strategy and pricing at Pepperdine University in Malibu and professor of luxury at NYU, New York, he’s authored best-selling books on luxury management, and is a respected global keynote speaker and sought-after luxury expert, appearing on platforms like Bloomberg TV, Forbes and The Economist. Holding an MBA and a PhD in luxury management, Langer 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: www.linkedin.com/in/drlanger Instagram: @drdaniellanger

Opinion: How luxury can stay ahead in a changing world

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Published December 18, 2023

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Opinion: How luxury can stay ahead in a changing world