Evolution of the Luxury Dynamic

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The recent annual release of Interbrand’s global Top 100 most valuable brand list and the CoolBrands Top 20 has revealed a re-emergence of luxury brands. Famous names such as Louis Vuitton, Gucci, Hermes and Cartier have all witnessed a large increase in their respective brand values in 2013. Luxury labels have also been regarded as being ‘cooler’ than everyday brands this year, with brands such as Rolex, Prada and Chanel knocking household favourites such as Ben & Jerry’s out of the top 20 ‘cool’ list. So what can be deduced from this somewhat reverse in fortunes for luxury brands and what is the current nature of ‘luxury’ in 2013?

Since the economic downturn of 2008, luxury brands have certainly come under difficulty positioning themselves within a grim consumption outlook. Altering of household budgets, increasing unemployment, rising taxes and bills have all caused a restraint on spending habits and subsequently forged new social trends. One such trend resulting from the global recession has been a shift movement away from overt ‘showing off’ and conspicuous consumption, especially in Western Europe. This has impacted how consumers view luxury brands and their role as status symbols. We have seen another resultant trend towards a more ‘discreet’ or ‘subtle’ luxury, whereby a ‘logo centric’ product is something which is often not desired by luxury consumers in 2013. This will be referred to later in the article.

Not only have we seen these two trends consequential of the global economic situation, but also a more overall evolution of the luxury dynamic. In recent years, accompanying better economic fortunes particularly in the UK, there has been a rise in a more inclusive luxury, whereby forms of indulgence have filtered down from the top tiers of society. We can see this through examples such as the rising consumption of champagne for various occasions, with brands such as Perrier Jouët designing a new product targeting affluent young night-clubbers. Other examples include the foray of luxury designers into working with high street brands such as Top Shop and H&M.

Perrier-Jouet youth focused design
Versace collaborated with H & M
Coming back to the trend away from ostentatious showing off through labels, luxury brands have slowly been made aware of this and new approaches have been incorporated into their bottom lines as labels. Global consumers now look towards substance rather than status which logos can represent. They look for more than a product, one which also contains an experience, a tradition, an authenticity. This is where brand stories can and have been utilised effectively by luxury names. Look no further than the Voyager, the yacht devoted for the promotion of Johnnie Walker whiskey. Through this extravagant vessel, which looks to epitomise a lavish and exquisite image, the brand can create an experiential feeling which transcends the product itself.  
 
Voyager: 1920s Johnnie Walker events boat
Johnnie Walker has also recently extended its experiential offerings with new ‘hubs’ already seen in Asia, which will include bars and museums, in hip European and Latin American cities. Determining how the brand is consumed by providing tangible brand associations is vital for the latest success of luxury labels. The experience based strategies increasingly relied upon by luxury brands is a main factor in the evolution of their nature and their contemporary success in terms of brand value and in creating positive consumer thoughts towards the brand.
House of Johnnie Walker Shanghai
Leading on from this experiential luxury, in 2013 we are witnessing the trend towards extreme and extraordinary travel in the tourism industry. Perhaps as a result of the more inclusive side of contemporary luxury, those trying to re-establish a clear division in status have to go above and beyond when it comes to their travel choices. Thus there have been a rise in demand for luxury boutique hotels and more unusual and exotic destination choices, in an attempt to regain this status hierarchy.

Also, with the dominance of social media in our lives we have seen new forms of ‘showing off’ and a conspicuous consumption in an online realm, which may be replacing our need for flashy logos. Whether it is uploading a picture of an exotic destination or making ‘check-in’ at a fancy restaurant, ‘sharing’ through these applications has become a pertinent way to define ones status. It will be interesting to see how these trends evolve and to see how they affect the nature of' luxury and the success of the brands which comprise the industry.

By Harry Sparkes


References 

Bainbridge, J. 2013. The rise of discreet luxury and a new consumer elite - Brand Republic News. [online] Available at: http://www.brandrepublic.com/features/1213629/rise-discreet-luxury-new-consumer-elite/?DCMP=ILC-SEARCH [Accessed: 4 Oct 2013].

Interbrand.com. 2013. Best Global Brands 2013 - From Masters to Concierges. [online] Available at: http://www.interbrand.com/en/best-global-brands/2013/sector-overviews/luxury-2013.aspx [Accessed: 4 Oct 2013].

Interbrand.com. 2013. Interbrand - Best Global Brands 2013. [online] Available at: http://www.interbrand.com/en/best-global-brands/2013/Best-Global-Brands-2013.aspx [Accessed: 4 Oct 2013].

Interactive, H. 2013. Perrier Jouët designs new champagne for affluent young nightclubbers - Brand Republic News. [online] Available at: http://www.brandrepublic.com/news/1212074/Perrier-JouEt-designs-new-champagne-affluent-young-nightclubbers/?DCMP=ILC-SEARCH [Accessed: 4 Oct 2013].

Marketingweek.co.uk. 2013. Apple knocks Coke off 'most valuable' brand perch after 13 years | News | Marketing Week. [online] Available at: http://www.marketingweek.co.uk/news/apple-knocks-coke-off-most-valuable-brand-perch-after-13-years/4008070.article [Accessed: 4 Oct 2013].

Marketingweek.co.uk. 2013. Johnnie Walker eyes younger and female drinkers with variants push | News | Marketing Week. [online] Available at: http://www.marketingweek.co.uk/news/johnnie-walker-eyes-younger-and-female-drinkers-with-variants-push/4007374.article [Accessed: 4 Oct 2013].

Marketingweek.co.uk. 2013. Diageo readies Johnnie Walker House international roll out | News | Marketing Week. [online] Available at: http://www.marketingweek.co.uk/news/diageo-readies-johnnie-walker-house-international-roll-out/4008069.article [Accessed: 4 Oct 2013].

Marketingweek.co.uk. 2013. Luxury labels become 'cooler' than everyday brands | News | Marketing Week. [online] Available at: http://www.marketingweek.co.uk/news/luxury-labels-become-cooler-than-everyday-brands/4008005.article [Accessed: 4 Oct 2013].

 http://i.dailymail.co.uk/i/pix/2013/07/24/article-2376311-1AF90DA3000005DC-893_634x931.jpg.

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