The State of Luxury; Shifting From The Unobtainable To The All-Obtainable and What It Means For Brands
by Marie-Thérèse Cassidy on 10/16/2019 | 4 Minute Read
If ever we needed confirmation about the rapidly redefined boundaries of luxury, it’s the fact that millennials and Gen Z are set to represent 40% of the luxury market by 2025.
Brands across the board are having to swiftly adapt to reflect the values of this emerging consumer group, one that cares less about superior heritage, extravagance and excess, and more about transparency, ethics, purpose and experience. Exclusivity is still relevant, but for this entrepreneurial and empowered consumer group, the luxury sector needs to shift away from barriers to entry and the unobtainable, towards the all-obtainable and relate-ability.
The big question for brands is how they can recalibrate themselves in response to these changing notions of luxury without alienating consumers or diluting their core values.
For starters, brands need to decode what their purpose is—the nucleus of the brand—and keep that intact while layering in new narratives that speak to younger generations. For example, Tiffany & Co have experimented with shedding formal codes of the luxury category with pop-ups and disruptive graffiti graphics, but have crucially remained anchored in their signature robin’s egg blue. Meanwhile, Louis Vuitton’s collaboration with street-wear brand Supreme firmly held on to their iconic monogram assets.
This shift in the luxury category also has many implications for the role of packaging.
Millennials and Gen Z are at ease engaging with luxury brands digitally, and by 2025, online purchases will make up 25% of the luxury market’s value (up 10% from today). This means that, in many cases, packaging might be the only physical touch-point that a brand has with consumers, beyond the product itself. Packaging has to work as hard as possible to create a sense of validation of the brand and experience for the consumer. Direct-to-consumer companies are currently owning this space, such as environmentally-conscious shoe brand Allbirds. Their packaging expresses sustainable values in the way it reduces waste, acting as both the shipping box and the shoe box all in one while maintaining the experience of opening a personal delivery when it arrives.
In a push to make the physical packaging work as hard as possible, the temptation for luxury brands might be to make the unboxing experience as grand and opulent as possible. However, sustainability is one of the top priorities for younger generations, and they won't tolerate wastefulness. 89% of consumers will consider paying more for ethical and sustainable brands, so there's an opportunity for brands to create a meaningful engagement for consumers by marrying together the physical and digital platforms; an unboxing experience that surprises and delights within the boundaries of sustainable materials, combined with an online experience where digital storytelling can replace, and even go further, than the traditionally lavish unboxing experience might have provided.
It represents an opportunity for brands to truly harness the power of digital in engaging luxury consumers, such as the launch of LVMH’s e-commerce platform 24S, where Parisian stylists are available for live, one-to-one video consultations through a dedicated app.
With a drive to keep physical packaging both sustainable yet delightful, we’re set to see brands use it more as treasured keepsakes, something tangible to hold on to in an increasingly digital world.
We already see this with brands weaving a sustainability narrative around reimagining how plastics are used, turning them into something to be kept, treasured, and re-used.
Personal care brand called Myro has created a refillable deodorant that comes in a reusable plastic case that uses 50% less plastic than typical, single-use deodorant containers. In doing so, they’ve created an object of beauty that feels premium and challenges traditional sustainability cues, while instilling plastic with new desirability. Meanwhile, Chilly’s single-use water bottles have harnessed technology, designer collaborations and personalization to successfully retune our perception around disposable water bottles to make them a coveted accessory instead.
The other lesson from Myro and Chilly’s is that brands don’t need to be so worthy and earnest about sustainability anymore. Gen Z consumers expect the brands they interact with to be socially conscious and environmentally aware, meaning traditional cues of sustainability, like recycled materials and muted natural color palettes, make less of an impact. There's an opportunity to embrace the innovation that’s going on in sustainability with new materials that feel more premium and subtle.
For example, Knoll, who makes rigid luxury packaging, has created a new plant material made from bamboo and sugar cane fibers to replace thermoformed plastic, allowing brands to be both sustainable and sophisticated. There’s also an opportunity for brands to represent sustainable values while also having fun and expressing personality. The much-hyped vegan and cruelty-free beauty brand Milk Makeup do this well with bold and vibrant graphics on see-through packaging, bringing to life another key Gen Z value of transparency.
While all of these shifts represent an opening up of the luxury category and a move towards less formality, it would be a mistake to see it as a dumbing-down of luxury codes. Instead, it’s much more about making luxury more accessible, relatable—and in short, relevant—for a generation empowered by social media and on-demand culture.
The brands that manage to evolve and tap into this mindset, while holding on to their core purpose and values, will be the ones that thrive in these exciting and changing times for the luxury category.