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Defining luxury: Why Prada, Gucci and others must take ownership of consumer experiences

By Erminia Blackden , strategy director



Opinion article

June 9, 2015 | 5 min read

There is no one definition of luxury.

This is because luxury only exists in context. Change the context and the definition changes with it.

In Manhattan in the rain, luxury is a taxi. At the Met Gala dinner it’s a handmade gown personally designed by Karl Lagerfeld and a 17 piece emerald necklace from luxury jewellers Boodles.

What these examples have in common is a degree of elitism, scarcity, authenticity, and to some degree indulgence, all qualities associated with degrees of luxury, but in both instances the value to the individual is driven primarily by the context. The luxury status of the two examples are not interchangeable.

This probably goes some way to explaining why it is so difficult to agree on a universal definition for luxury, because its context that creates the framework for that definition.

Our western framework for defining luxury comes predominantly from the 18th and 19th century, where artisanal skills and craftsmanship were used to create visually magnificent products designed predominantly to visually demarcate between the complex hierarchies of the upper classes.

This context of origin has left a legacy which is becoming increasingly irrelevant, but which many brands are still trying to live up to.

We are now in the 21st century, and context has changed. Where does the concept of artisanal skill and craftsmanship fit in a world where technology facilitates high quality mass production? And how does abundance of product choice sit with the concept of scarcity?

These questions clearly demonstrate a growing friction between the pure concept of luxury and the commercial benefits that it can offer the business investor who is inevitably controlling the brands that front it.

Some brands like Hermes, Chanel and Cartier have been able to weather the storm, but others such as Prada and Gucci have been less fortunate; Prada saw its net profit fall 28 per cent last year as the bottom fell out of the Chinese market – the success of which had been masking falling profits in Europe for a number of years.

So if luxury exists only in context, what is the modern context within which luxury can thrive?

In today's over-stretched and over-stressed world it’s no surprise that experience trumps consumption in the luxury market. Today’s rich consumers would rather spend their energy and money doing things than acquiring them. This is hardly a new theme, but what is, is the list of attributes that define luxury in the context of now.

In the context of modern life, a luxury brand can’t just be about artisanal qualities such as craftsmanship, precision, and the quality materials on which it was founded. In fact, the modern luxury brand doesn’t necessarily have to have any of these qualities at all, but it does have to have authenticity, insight, the human touch, and a willingness to take ownership of the consumer experience of which product is only a small part.

But don’t be fooled into thinking that this focus on luxury experiences is leaving the luxury product market behind. With more luxury products and more people with the money to buy them than ever before, the global market for luxury goods continues to grow. And with demand comes supply; competition in this space is fiercer than ever. Luxury product brands that want to succeed need to differentiate themselves by the quality of their experience, pre, during and post purchase, not just with the quality of their product.

A retail brand that understands this is Alfred Dunhill. It has created a unique context for its brand with its ‘homes around the world’ concept. These beautiful historical properties are steeped in brand relevance. The idea blends products and experiences in relaxed retail environments, with touches such as whisky bars, screening rooms, barbers and cafes which bring the brand concept to life. And of course, no discussion about 21st century luxe feels complete without mentioning Apple, which maintains a high level of human intervention in a hi-tech self-serving world.

It’s clear that in the modern age, the context of luxury is shifting – becoming less about how others view 'me', and more about how I feel about 'myself'.

In a cultural context when the greatest luxuries are the quality of your life and time to enjoy it, the detail and the experience that surrounds it really matters. So maybe the artisanal qualities of supreme craftsmanship, precision, and quality which have defined luxury for centuries are not dying, but the literal definition confined only to product has grown stale.

The traditional definition of luxury lives on, but how we define it in the modern context is broader than it’s ever been – not only responsible for shaping the product but every aspect of the experience that surrounds it too, to create a richer, more rewarding experience for everyone, brand and user alike.

Erminia Blackden is strategy director at Cocoon

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