Calling Time on Luxury?

Several articles have recently appeared on the subject of luxury, what it means, where it’s going and what it might look like in another decade (I guess that’s what you get from reading LuxuryDaily).

In the week when all hell broke loose over the publication of the so-called Panama Papers, an investigative journalistic exposé of some 11.5 million leaked files from Mossack Fonseca into the financial (and largely shady) dealings of fraudsters, drug traffickers, billionaires, politicians, world leaders, sports stars…and yes, allegedly some members of the diamond industry, perhaps it’s also a good time to reflect on the luxury market.

Speaking at the recent French-American Chamber of Commerce (FACC) Luxury Symposium, adjunct professor at NYU Stern School of Business and co-founder and co-CEO of Resonance Lawrence Lenihan said, “Everything’s going to change. This is not specific to just luxury fashion; this is for everything out there.”

His premise was not so much that luxury will disappear, but that its parameters will shift and the next decade will herald a number of changes. Key among these will be the disappearance of “accessible” or “affordable” luxury, which in Lenihan’s opinion is a deceitful misnomer. The point about luxury is that it is supposed to be out of reach for most people, it is the very thing that defines it – so, mass luxury is no luxury at all.

Lenihan also suggested that luxury will come to be defined by quality, scarcity, convenience, price and experience and that the concept of brand loyalty might become anathema, if a luxury brand was not able to display a strong value proposition. Brands will also require innovation and design inspiration to attract consumers in such a cut-throat market place, which might lead to the production of limited-edition products to take advantage of scarcity and the desire to own something that others cannot.

Lenihan stressed that the luxury market would continue to change and develop, highlighting that the days of multi-billion dollar vertical brands could be numbered, as technology will enable consumers to find specific products that they want – and perhaps just as importantly find someone who is not a vast luxury brand to make it for them.

An idea juxtaposed to this was put forward by another presenter at the FACC Luxury Symposium, Tiffany & Co. CEO Frederic Cumenal. He suggested that what matters most is not what changes, but rather what does not. In his view, the point of reference of the ever-changing world of technology was that its impermanence is its weakness, “We long for beauty that lasts.”

As has been stressed many times previously in other places, there is a generational divide when it comes to luxury. Millennials are the group most conscious of poverty and social inequality, and another aspect of Lenihan’s address focused on the need for companies to be very clear about their commitment to corporate social responsibility, sustainability and transparency about their product sourcing.