The lap of luxury

While the notion of luxury is still largely defined by price, quality and exclusivity, self-actualisation is becoming increasingly important.

Rather than just being about products to own or places to visit, luxury is now more about who people want to be.

Over the next month we will look at the luxury market in depth. We start this week with a look at how the luxury market is changing.

We see three key drivers of future success in the luxury market:

Self-actualisation
Luxury consumers now see luxury through the prism of aspiration and lifestyle goals. More than 75% of respondents to a recent global survey of high-income luxury consumers, either agreed or strongly agreed with the statement that they find `more value in goods and services that enable them to learn something new'. The new luxury consumer is looking for experiences that help them learn, differentiate themselves, express who they are, and have a purpose beyond comfort and pampering. For instance, those running in the Barcelona Marathon a few years ago were able to sign up for two luxury programmes with the Mandarin Oriental in Barcelona. The Marathon Package included three nights' accommodation, personalised coaching ahead of the race and two spa treatments.

As luxury has evolved to become more customer-centric rather than product-centric, other luxury experiences such as travel, beauty, gastronomy, technology, health and wellness are becoming far more important. Growth in premium health and wellness largely focuses on exercise classes, personal training, massages and skincare treatments, with premium experiences from global lifestyle brands like Equinox, to local players like KX.

In the future new offerings that are rooted in luxury lifestyle medicine, such as innovative diet concepts and medical treatments from cryotherapy (seen above) to hyperbaric oxygen therapy, are predicted to grow by luxury goods and services experts.

Exclusivity
Although luxury is evolving, the key to luxury is and will always be centred around an idea of exclusivity. Limited runs nearly always sell out and appear very sustainable because there is no 'dead stock' which also adds to brand relevance. Luxury brands also create new exclusive market environments, fostering experimental co-creation and collaboration with consumers, influencers, and other members of a brand's global ecosystem. This research and experimentation can enable the premiumisation of identities to create discernible points of difference for consumers: for instance, skate brand Supreme with Louis Vuitton, and flat-pack furniture store IKEA with Virgil Abloh.

Technology
Luxury consumers want to be seen as early adopters of new technology; over half of respondents in the US and UK, and two-thirds or more in China, Mexico, and the UAE said that it was either likely or very likely that they would `adopt the latest apps and online services before their friends'. Tech is also playing an increasingly important role in the luxury offer with brands bringing artificial intelligence and augmented / virtual reality experiences – into their offering. 

Luxury brands that understand this, and help their customers live up to self-actualisation aspirations can give themselves a competitive advantage in the evolving world of luxury.

Samuel Gebreselassie