Scarcity and reality: the future of luxury

And it is these new drivers of social capital that have expanded the luxury market to include new product types, like technology. Perhaps the most long-standing example is Apple, which, since the iMac era, has managed to maintain its punchy price point not just through pioneering design and usability, but by positioning itself as the “creative’s choice.” Although technically an automotive company, another example is Tesla, whose waitlists rival the Italian sports car manufactures not just because of their luxurious design and performance, but because driving one suggests that you also care about the environment. A more recent example is Peloton, which pulls the wellness lever of luxury by bringing exclusive-gym-calibre spin classes to the home.

Fortunately, technology has also enabled companies to manage need for greater authenticity through personalisation across the entire marketing stack. But what we’re also seeing successful companies do is evolve how they delineate between consumers and approach their interactions with them in the first place. More and more brands - particularly those in the lifestyle space, or those that aspire to be - have moved away from traditional demographic approaches and are instead focusing on consumer tribes as opposed to segments.

This not only allows them to solve for commonalities and differences in mindset, which is far more effective in ensuring authenticity, but also enables them to engage consumers in more meaningful ways, such as in the actual development or marketing of their products, which is arguably the biggest driver of authenticity. Included in this is the use of influencers, who simultaneously attract new customers to the brand and help maintain its relevance by helping to shape and promote the products themselves.

Binary luxury

Established luxury brands, particularly those in fashion and beauty, have been some of the fastest to adapt to digital. For example, the historical torchbearers of luxury, Chanel and Hermes, have shifted significant portions of their marketing spend from print to digital. And while this has democratised access to their content, which one could argue has cheapened it, they’ve managed to protect their total brand experience by refraining from selling their products online and forcing consumers into their stores, which they’ve sought to make increasingly experiential - perhaps in compensation.

So, asking how to translate the luxury feel of a print ad to digital is probably the wrong question. Rather, brands should be asking themselves what mix of channels are most important for reaching their consumers and what role should each channel should play in creating an omnichannel luxury experience that’s true to who they are.

So to what extent are luxury goods inured against societal shifts, and what opportunities does that offer us as marketers?

They’re not. Scarcity may always be the main driver of luxury, but that which is scarce will almost certainly change over time, and, like today, will continue to vary market to market. So, the only sure-fire way for luxury brands to remain relevant and authentic is to maintain much greater alignment with the higher-order values and aspirations of their target consumers.

But marketing alone is not capable of solving this. And what will likely become the only way in which big companies will be able to achieve this is through far greater integration of marketing and digital with the rest of the business’ key functions, and an operating model and organisational culture that promotes true consumer and market centricity.

Emanuel Krantz, UK practice lead, idea development at Capgemini Invent.