Is there such thing as ‘digital luxury’? The first word refers to dematerialisation, massification and programmed obsolescence; the second to tactile pleasure, exclusivity and heritage. This apparent oxymoron is analysed by Vicki Loomes, Senior Trend Analyst at TrendWatching, a consumer trend analytics company.
What can we expect from luxury products and services over the coming years?
The market is in flux, and things are changing fast. To give you an example, two street food stores in Singapore were recently awarded Michelin stars, leading to the question: ‘what does ‘luxury’ even mean today’? Luxury experienced a major shift associated with digital connectivity and on-demand services and products. We observe a transition of aspirations from physical ownership to experience. Economic factors, such as a slowdown in tourism and also in Chinese growth, are at play, but clearly the focus is shifting from what we own to who we are. Social media and self-tracking propel this shift, as people use new platforms to show off their experiences, achievements and self-improvement.
Do you notice any paradigm shift on the consumer side as well?
Indeed, we have entered a post-demographic world. Gender, age and zip codes are no longer accurate predictors of how people behave. Consumers are more likely, and better able, to build the lifestyle they want rather than the one given to them. And brands are responding: Louis Vuitton ran a womenswear campaign fronted by the male actor Jaden Smith; Valentino launched a gender-neutral collection; and more recently Burberry exhibited collections for men and women together in the same show.
Digital dematerialisation and luxury seem to conflict on multiple fronts, creating a tension between massification and ultra-personalisation (the digital world) and controlled exclusivity (luxury). What is your take on this?
The experience of luxury itself is evolving, combining sharing and showing off. What we have and who we are: these are the two dimensions that luxury brands have to handle. Where do brands fit? What do they have to offer? Cadillac launched Book by Cadillac: a subscription service enabling US residents to drive and swap vehicles for a monthly fee. Technology is also enhancing customer service, leading to frictionless retail. For example, at Amazon Go’s checkout-free grocery store, customers simply collect products from the shelves and go. Those developments will impact consumers’ expectations of luxury brands and the retail experience they provide.
Senior Trend Analyst Vicki Loomes
And how do consumers reconcile technology and luxury?
Technology and luxury can also be associated when it comes to identity. Individuals create their own identity, yet at the same time they also want to belong to a group. Forward-thinking luxury brands should consider how they can create a community around the product or service they offer, and how to manage this participation.
Luxury seems to be at odds with technology, which refers to programmed obsolescence, ‘freemium’ business models (part of the service is free, the rest requires payment) and ‘minimum viable products’ (products launched as soon as they are stable enough). How do you analyse this contradiction?
Minimum viable products and freemium models are about managing expectations. When I buy, to what do I measure up what I get? Do I feel special? Consumers benchmark and ask questions. Luxury is aspirational; it is a transfer of expectations. Maybe I will not get the luxury good or service, but I can compare it with what I get when I pay or when I use a freemium model. Luxury sets the benchmark.
There seems to be a trend towards a revival of analogic products (vinyl records, purely mechanical objects). Is this a short-lived phenomenon or the expression of a deeper trend?
We are driven by nostalgia in a world where everything is digital. Luxury has traditionally been defined by scarcity and exclusivity – the opposite of the digital world. Analogic is very unique. It says something about yourself, your taste, your wealth and your attitude. It is not necessarily anti-digital, but there is room for physical analogic experiences in your life. Digital is essentially intangible.