The future of luxury

Article «The future of luxury» by Jean-Pierre Dubois-Monfort, French and European Affairs Analyst.

About author:

“The multiple adventures of the Parisian municipal campaign had – provisionally, perhaps – the reason for my passion for politics. I felt that I had better things to do and I am engaged in analytical work on the intersection of luxury and digital.
The page was not entirely blank: neither on luxury – I was not busy in Tokyo in the early 90s – nor on digital, since I participated in the work of the OECD in the early 2000s and at the first negotiations.
Intrinsic interest in these two fields, of which I have followed successive developments, and in their singular and profitable union: scientific abstraction and sensory rapture, ephemeral and predictive, the attribute of success and the spirit of ‘innovation.
Union at this triumphant point that it has profoundly modified the physiognomy of our city centers, so important for social conviviality and human interaction – here reappears for politics.
This article was written in the special circumstances that we know of. A sentence by Steinbeck that I quote in the text comes back to my mind: “no misfortune is too heavy to bear as long as men hold out”. Jean-Pierre Dubois-Monfort

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The future of luxury

Even before we have been hit by this horrific pandemic, the future of luxury – luxury is in fact only pars pro toto here, it stays for our lifestyle, our way of living, our consumption and use of resources – has been questioned. Luxury means abundance, wealth, sometimes also ostentation and is therefore easily criticized. In response to these severe critics, the companies of the luxury sector have given convincing answers, specially in the difficult time we are facing now.
How will these companies which are the flagships of our know how and our culture overcome this sanitary crisis which also becomes an economic one and how will our attitude toward luxury and luxury products evolve?

Luxury definition

«-I polished my shoes
-At last! It was not luxury!»

This expression borrowed from the everyday conversation express – in a negative way – to which register luxury belongs to. The Littré Dictionary mentions the meaning of luxury in this everyday expression, but gives a very broad meaning to luxury :

«Munificence of clothes, tables, furniture; abundance of sumptuous goods».

The writers who have been quoted in the Littré Dictionary in relation with luxury are known as some of the fathers of the 1789 Revolution -Voltaire, Condorcet- and they are very critical toward luxury considering it as expense of the rich at the cost of the poor. At the opposite of this social dimension of luxury, there is a psychological one expressed in the poem of Baudelaire «luxury, calm and voluptuous» where it means a sensual delight, feeling of plenty.

Voltaire - quote about luxury

Two very different approaches : luxury had good and bad days, good and bad press. In his definition of luxury, Littré does not mention some luxury goods that already existed such as perfumes or jewels, but since the second half of the XIX century new luxury goods and services have emerged such as exclusive cars, yachts, private jets, luxury travels and more recently technological jewels.

With such a broad range of luxury goods and services even rich people – unless they have unlimited resources- cannot afford everything and have to choose among those various pleasures.

Bottega Veneta Subverts the Idea of Luxury - photographer Tyrone Lebon - Fall 2019 campaign
Bottega Veneta Subverts the Idea of Luxury – photographer Tyrone Lebon – Fall 2019 campaign

What applies to a rich applies also much more to people from the middle class. Twenty years ago it was not unusual for such people to buy or to offer such luxury products as a sign of well-being or of good taste.Nowadays it becomes more and more difficult.According to a survey by IFM the share of textiles purchase in the expenses of the household decreased from 9 to 4% in the recent years.In an other field a survey of Moody’Analytic made public by Blue Cross Blue Shield shows the decline in the physical and mental health of the millennials compared with X generation , due to the heavy cost of health care.

This is not good for the consumption, this is also not good for the social body. Tocqueville writes in Democracy in America : «Between the two extremes of democratic societies is found an unbelievable multitude of almost similar men who without being precisely rich or poor, possess enough property to desire order, and do not have enough property to arouse envy»…

Typical Luxury Product
Typical Luxury Product
What happens when this unmemorable people are no longer in a position to buy such goods?

The consequences of such trend is the increasing critical statement toward the luxury since the erosion of the middle class goes on rapidly and induces the resentment of a part of it which can not purchase even so called affordable luxury goods. Its critical statement targets specially the social and environmental costs of the production of such products.

One turning point has been the disaster of Rana Plaza in April 2013 where more than thousand people working in the textile industry under bad conditions died.The safety requirements were not fulfilled, nevertheless the agencies in charge of safety supervision had given their agreement to such working conditions.

Moreover, the climate change is one of the main concerns worldwide and it is more and more obvious that the mankind is responsible for the worsening living conditions not only for the human beings but also the animal welfare and the biodiversity.

Leonardo Dicaprio - Great Gatsby poster
Leonardo Dicaprio – Great Gatsby poster

On this issue, the reaction has been particularly strong among American movie stars such as Leonardo DiCaprio and iconic celebrities such as Stella McCartney who protested with a vigour comparable to the debate about civic rights in the sixties.

But the groups and the brands active in the textile and luxury sectors have rapidly taken into account these concerns, for fear their image, so decisive for their activities, would worsened. Decisions have been taken in order to improve the production process.

On the basis of voluntary commitments or new regulatory framework, they publish yearly the results of their activities in this field. For instance, LVMH, reports extra financial indicators such as green house gas emissions, energy consumption, water consumption.

Such trend becomes more and more important with the endorsement by many companies of the Fashion Pact made public at the G7 of Biarritz which recognizes the responsibility of the Fashion sector for the fight against the climate change and announced strong commitments for climate, biodiversity and ocean. Many companies are now following such goals.

Francois Henri Pinault - Fashion Pact G7 Biarritz 2019 - feature of luxury
Francois Henri Pinault – Fashion Pact G7 Biarritz 2019 – feature of luxury
Consumers want both reduce their expenses and contribute to the fight against climate change.

An other trend in line with the environmental impact of the textile industry : upcycling and second hand business. In doing so, the consumers combine the weakness of their purchasing power and the wish to wear new clothes. One example for the trend is for instance to have a wedding dress that can be used for the everyday life after the wedding ceremony.

Not only the middle class is on this line. At the 50 show of his fashion carrier, Jean-Paul Gaultier send a clear message : «Adieu le flambant neuf , vive le flambant vieux!». One of the model was a dress made out of old neckties.

By the British Academy Film Awards, the Duchess of Cambridge wore, contrary to the unwritten code, a dress she had already worn by a previous ceremony. The BAFA was also under the sign of restraint and frugality.

Two parallel markets : luxury and simplicity

The first is that the awareness of the climate change will increase the critical stand of the young generation, already famous for its disruption, toward established rules. There are already a lot of examples in this direction : low interest for driving license, low interest for snow holidays, questioning of good and bad taste, the rule of three meals a day….

An advertiser made a polemic at the beginning of the 2000 saying that somebody who at the age of 50 years was not the owner of a luxury watch was a looser, he surely wouldn’t make such a
statement nowadays.

An advertising which targets young people distinguish their generation who wants to be free from the previous one who wanted to possess.

This is a strong trend in the consumption, but it coexists with more classical approaches: Rolls Royce will develop in a near future-whisper- a platform for its customers with commercial offer, conversation, prestigious events.

Zalando and Amazon are also targeting the luxury segment on the mature markets. Balenciaga will renew with Haute couture.

Balenciaga Spring Summer 2020 collection - luxury and simplicity
Balenciaga Spring Summer 2020 collection – luxury and simplicity
In emerging countries a strong demand for luxury products

This classical consumption behavior is also present in emerging countries in a twofold way and both are highly profitable :
– The Super rich as described in Crazy Rich Asians living in Singapore. A platform for 30 millions of rich Chinese consumers is in preparation.
– The second group are people entering the consumption market-Business at the basis of the Pyramid, as the marketing specialist would say – and are eager to purchase or to offer luxury products.

Even in a limited number. Since they are entering the world of consumption, buying a luxury product means for them being sure to make a good choice.

When we mention emerging markets we mean generally Asian markets but African markets are already booming.

The digital economy : a growth driver for the luxury industry

The use of technological tools and services which play already an important role in our daily life, is a very strong support for the sector in its various activities : regulatory, promotion, commercial.

If restraint and frugality are trend, it concerns only a segment of the market.

Many young consumers are employed in disruptive sectors, earn a lot of money and are also eager to consume luxury products. Very often employed in the digital economy, they are very receptive for the digital activities of the luxury groups which have seen very early the fantastic opportunities for the various ranges of activities.

In order to answer the questions about the working conditions in the production process, they have trace-ability tools that allow the supervision of such issues. Against counterfeit, IOT deliver certificates of authenticity.

Christian Dior Fall-Winter 2020-2021 collection - luxury and simplicity
Christian Dior Fall-Winter 2020-2021 collection – luxury and simplicity

Sites, platforms,social networks help to promote their products, their values, their women and men, their history, fidelize their customers, to find the right adequacy between demand and offer, to reach an optimal matching.

Image recognition allow predictive models for goods which will be successful in the next seasons : colour, materials, models.Some groups offer already fitting rooms in sophisticated augmented reality.

Without reaching a perfect «zero defect» the technological know how increases profitability and – maybe ?- a more affordable price policy could be envisaged for some segments of the market.

Some companies are developing the phygital to combine the best of physical and digital but the trend to digitalization is so strong and the brick and mortar so endangered that the urban landscape could become empty.

Let us bet that the companies will not forget how relevant for the customer the quality of the welcome in a boutique devoted to fashion and beauty remains and the crucial role of towns in social conviviality and human interaction.

The luxury groups have always fulfilled their citizenship responsibility and have taken decisions useful for the national interest. We make right now this experience with LVMH launching a solidarity action with the manufacturing of hydroalcoholic gel and the purchase of protection masks, remembering in a certain sense that the original purpose of human action is the survival of mankind.

LVMH and humanitarian actions
LVMH and humanitarian actions

Since we are still within this sanitary crisis and foresee neither its length nor its outcome, it’s difficult to propose some perspective.

We can at least examine how in the previous times people react after such a crisis. At the beginning of this article we mentioned the time of the French Revolution and the critical stand toward luxury.

Some years later came the period des Incroyables et des Merveilleuses with the refinement of clothes and high elegance.

Other similar period come in mind such as La Belle Époque or le Saint Germain du Second Après guerre.

Will we enjoy such a back to Happiness or will the outcome of the crisis exclude such perspective ?

May be we should remember this sentence in John Steinbeck’s Grapes of wrath : «no unfortune is to great to bear if their men were whole». Nowadays, we would change the wording and say : «if men and women were whole»… But the most important remains: we can bear this unfortune.

Desire of luxury goods - Luxury market after crisis

Article «The future of luxury» by Jean-Pierre Dubois-Monfort, French and European Affairs Analyst.

Double training: literary. (ENS Cachan, Aggregation of German) and administrative (Sciences PO Paris, ENA). Extensive bilateral (Singapore, Japan, Germany, Turkey, Switzerland) and multilateral (GATT, OECD) international experience: challenges, opportunities and negotiations.

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