Exploring luxury's past, present, and multi-faceted future.
In the aftermath of 2008’s recession, the affluent sentiment as we knew it faced total deconstruction and re-imagination. It moved past old definitions and evolved with new social climates and increasingly thoughtful waves of pop culture. One decade later, we’re examining where the industry of luxury is today—and how we got here.
Up to 2005
Rooted in rarity and expense, luxury was unequivocally aristocratic. A badge that helped to display status. Overt exclusivity drew an explicit line between the haves and have-nots, establishing class aspiration as a prime marketing motivator.
Due to the market crash and corporate misdeeds, the wealthy were generally seen as frivolous. Lacking depth or purpose, the “greed is good” mentality sparked a backlash. People sought to simplify not just their purchases, but their mindsets.
The reconstruction of affluence was grounded in a reprioritization of values. Still laced with rarity, the approach focused on heritage and history rather than high fashion. Luxury brands that cleverly tapped into this sentiment—like Louis Vuitton and Hermes—saw increases in brand value, even amidst tough times. Handmade products in limited quantities by “makers” also rose in popularity, whether created by high-profile brands like Montblanc, IWC and Van Cleef & Arpels or lesser known options like the Hermes-backed Shang Xia or Italy’s timeless leather goods maker Valextra. The coveted connection to individual curators and craftsmen transcended price.
As millennials became more well-traveled than any other prior generation, their standard for luxury significantly shifted the paradigm. Their exposure to exclusive experiences normalized—and somewhat neutralized—traditional luxury. It no longer held any “wow” power, eventually falling out of favor in lieu of unique, distinctive, and preferably shareable brand experiences. Increasingly, it became less about what we had, and more about who we are. Brands had to be connected, personal; they had to take on a life of their own. From various brand activations at Miami’s annual Art Basel—like Vanity Fair’s Social Club—to Kola House, a luxury bar and lounge created by Pepsi in Manhattan’s Meatpacking District, brands began to transcend product, demographic, and all the traditional rules altogether.
Building on this evolution, the definition and aesthetic of luxury continues to change. Its traditional embodiment, with its conservative yet well-curated approach, is no longer magnetizing. In 2018, the top high-end brands are communicating individual expression. In our knowledge-sharing economy, they are driven by stories. Purpose. Unique points of view to which consumers can relate. Collaborations can also make a brand’s stock rise; blending opposites and finding unexpected marriages between ideas, items or outlooks creates a sort of creative chaos that’s proven irresistible. And with millennials quickly becoming dominant in the high-net-worth category, this expectation will only deepen in the decade to come.
At Allis, we often get asked, how do you brand a premium building or hotel? But what we should be asked is, how do you brand a premium building or hotel today? Upper-crust exclusivity and aspiration were the key luxury behaviors a decade ago; creativity and intention now shine. Why? Because a truly luxurious item or experience in 2018 is never about status and status alone—it’s tied to our identity. Every brand choice we make communicates who we are. Therefore, premium brands are no longer about isolating, but aligning. Through depth of experience, expression and imagination, luxury has the unique power to bring us closer—not only to those like us, but ultimately, to ourselves.