Redefining the refined: What constitutes luxury for today's millennials?

White glove service and must-have designer logos may have been markers of status and affluence for baby boomers, but exactly what constitutes luxury for today’s millennials is still largely unknown. With rising incomes and global sector growth, a greater number of people can access luxury goods and reports predict that the number of luxury consumers will rise to between 380 million and 500 million by 2020. The word ‘luxury’, however, is so overused that it is applied to the marketing of everything from bread sauce to toilet roll. Indeed, when luxury is commonplace and as accessible as never before, can it still be luxury? How do luxury brands maintain aspiration?

The shuttering of diffusion lines including Michael by Michael Kors and Burberry Sport signals a return to core product across the luxury fashion sector, says Kate Waddell, global insight and innovation director at Dragon Rouge. “The big thing watered down is no longer good enough. Consumption, though, is less conspicuous, and more mindful in the sense that millennials need to be able to justify their luxury purchasing in terms of investment in health, wellbeing or security. This is about getting permission. They need to be able to say what the benefits of the product are, that there is value beyond the product itself.”

Body 1, Re-materialisation of Systems by El Ultimo Grito, part of the V&a’s What is luxury? exhibition

In addition, anytime, anywhere access to information, review and opinion means consumers are much better equipped to make informed decisions and have greater self-direction. Brands have to do as they claim – the conventional notion of provenance as a record of brand lineage is not enough to engage millennials.

The idea of luxury across society has transitioned from the material to immaterial, says Jana Scholze, curator of contemporary furniture at the Victoria & Albert Museum, and the curator behind its summer blockbuster, What is Luxury?

Luxury still embodies preciousness, but this is found in experiences, rather than products. “If you don’t have time, for instance, product becomes irrelevant,” she says. “Interestingly, our research with the Leverhulme International Network on luxury found that the younger generation is increasingly skeptical of big global brands – especially in Asia. There is renewed interest in artisans and local producers because people can have a connection.”

Against this backdrop, brands are tuning into ways of connecting with consumers through experience, by disrupting classic ideals and by creating a sense of ephemerality.

NY's Story reinvents itself on a regular basis

Manhattan retail concept Story embodies this approach. Set in a 2000 sq ft space, Story merges media and gallery to reinvent design and merchandise every four to eight weeks, curated by a particular theme, trend or issue. Other luxury experiences such as the Selfridges Chocolate Library incorporate learning and experimentation. The specially curated environment justifies the 100g bars with £10 price tags. Across the drinks sector, brands like Macallan or Suntory whisky are disrupting classic ideals. Macallan’s 1824 range navigates by liquid colour rather than vintage, while Suntory has launched no-age-statement whiskies from its Yamazaki and Hakushu distilleries.

Mulberry and Hermès have offered consumers the chance to experience the skills associated with the brand through workshops or craft days. Festival Des Métiers at the Saatchi Gallery in 2013 was an insight into the craftsmanship of Hermès. Visitors queued for hours to see a silk scarf painstakingly screen-printed. The exhibition toured from Beijing to London, putting the brand in a gallery context, boosting its cultural credentials. Similarly, the Mulberry Loves Craft tent at Wilderness festival last year was a hugely popular workshop, where festivalgoers could customise a Mulberry leather armband.

Selfridges Chocolate Library

Chanel’s recent partnership with the Ritz Paris to open a Chanel-branded spa – homage to one of its most famous residents – illustrates how even more experiential possibilities emerge when working with synergetic brands. This approach is core to private jet firm Fly Victor’s offering. It recently partnered with motorsports event The Run To Monaco, flying participants to and from an exclusive five-day trip, encompassing bull jumping, Michelin-starred dining, outdoor DJs, single-seater motor racing, partying aboard a yacht and, of course, the Grand Prix. “It’s these sort of extraordinary experiences and special moments that consumers are seeking. We want to be at the heart of putting these bespoke experiences together,” says Dan Northover, chief marketing officer at Fly Victor.

Fly Victor is also interesting as it provides a service that gives freedom to the customer, letting them be in control of their schedule, says Paul Vallois, managing partner at Partners Andrews Aldridge, whose dedicated luxury division Cocoon boasts clients including Alfred Dunhill and Rolls Royce. “Luxury consumers very often don’t want the material commitment,” he adds.

Investing in service and experience also has wider benefits in that it generates more authentic and Investing in service and experience also has wider benefits in that it generates more authentic and enriching content that can be used to bolster digital presence.

While e-commerce is important, for luxury brands the digital experience is less about hard sales and increasingly about building community. The personalisation, personal interaction and exclusivity that some luxury brands are built on can be difficult to replicate online.

Grey Goose's Courchevel campaign

“Digital channels are a means of creating buzz, a means of becoming part of something,” says Dragon Rouge’s Waddell. She refers to Grey Goose’s campaign with French skiing resort Courchevel 1850 earlier this year, created by Mr President, as a particularly elegant use. The exclusive après-ski cocktail experience was mastered through a discrete, personal digital silver goose pendant invitation, unlocking selected venues and VIP experiences. Drinks and preferences were loaded onto the NFC enabled pendant as part of the brand’s venture into the internet of things.

Luxury is something that economists, historians and cultural theorists, as well as marketers, have dedicated much time to understanding. But what the future holds is perhaps a much deeper discussion on priorities and values, the V&A’s Scholze predicts. Though luxury is now less material, people are still consuming goods. Access to products and resources is taken as a given, rather than a luxury.

“But there’s a back story to all of these products, for instance with electronics and rare earth minerals,” says Scholze. “One of the pieces we wanted to put in the show but didn’t have room for was a project about water. Water is so vital to life, yet so cheap. That’s what’s strange about economics: we tend not to value the things we really need. This raises some difficult political, social and ethical questions. It’s something that needs greater levels of discussion across contemporary society.”

Perhaps this will be the next generation’s new revolution.

This feature was first published in the 22 July issue of The Drum.