The 14th Summit of the “Centre du Luxe”
Millennials or HENRY (e.g. High Earner, Not Rich Yet) luxury shoppers are changing the definition of luxury with the emergence of the “New Luxury” phenomenon which is the new “experientialisation” concept. According to the philosopher Yves Michaud, there is a shift from luxury ownership e.g. physical object possession, to intangible experiential luxury. Value is given to unique and authentic experiences over tangible luxury goods, with a complete focus on hedonism and affect. Products exist in order to underline privilege, in marking a distinction between those who can and cannot afford luxury goods. They are an ostentatious mark of pleasure and excess. But the promise of pure, distinctive enjoyment and sensory experience is indeed much more powerful and evokes the motivation to re-experience delightful feelings on an on. Luxury here serves the dual quest of intense emotion and the continuity of a dreamed life. Interestingly, the business of luxury experiences is facing a growing demand. This shows that the value derived from experiential luxury is seen as more rewarding than products.
Three dimensions must be taken into account when referring to the experiential luxury:
– The hedonism: only pleasure is intrinsically valuable with the pleasures of sex, drugs, and rock ‘n’ roll;
– The sensation and perception through the experience of the stimulation of the body’s senses: looking for extra excitement and thrills, seeking adrenaline, getting out of the daily routine, chilling out;
– The social dimension with the association to great shows of ostentatious wealth and superfluousness which help to alleviate the aversive feelings associated with powerlessness: premium treatment, VIP labels, exclusive, unrepeatable and customized experiences that make a moment of experience unique;
The so-called experiential luxury has an effect on material luxury. Products, objects of desire provide the experience and the whole acquisition process take the form of experiences bringing pleasure e.g. packaging. The object is serving as a within-participants factor of the experience. In fact, luxury products can either take the form of experiences –with a greater compensatory value, or objects. But there is a higher willingness to pay for experiential status products over material status products.
To do or to have is not the most important question. The major unknown factor in this process is the luxemosphere. Is there a luxury dimension with the rise of internet usage? Is digital the end of luxury? Luxury is clearly being disrupted and digital divide. Some are still snobby about internet. However, internet is a necessity, a new luxury market space and technology is creating a new world for augmented experiences and rich interaction. Digital is invigorating the luxury sector e.g. Burberry, Saint Laurent, Gucci, Tom Ford, providing new business perspective in an ever-changing world, a new platform to reach and connect with customers. It must be seen as a central consideration around which in-store, merchandising, and other business decisions are made and has to be seen not as a “sideline” function. Also, the web is another communication and experiential channel, and online stores an extension of the brick-and-mortar stores.
According to BlueLink, we have to face the inexorable evolution of the world towards digital. Digital can be a positive force in the social world because of its capabilities for communication and connection. Richer social relationships are one big advantage along with the reach and the facility to build communities. Since digital has allowed for the growth of human connection, human is companies’ success factor and relationships are of primary importance. Thus, strengthening client relationships is a strategic and necessary investment.
The emphasis on relationships, on creating strong even emotional customer connections as opposed to transaction-based exchanges is key for Berlutti. In fact, it is widely agreed that strong emotional connections and loyalty have the biggest influence on behavior, and customer service requires empathy for responding to clients’ needs and keeping or even enhancing this emotional bonds. In the light of this, we can say that it is therefore very powerful for brands to focus on emotional loyalty, psychological preference and affective attachment rather than on cognitive loyalty.
Each engagement moment is a chance to provide personalized and customized experiences that deliver long-term value. Listening to the environment and crafting a holistic, differentiated scenario can make it possible.
“These trends are reshaping the business of luxury everywhere. But, the common thread in all the discussions is that luxury is at the same time deeply immoral and moral.”
The ethical question when promoting and selling extremely sophisticated experiential luxury sounds sensible. To add, the rise of social inequalities and income gap between hyper-rich, rich and poor combined with ethical issues and an atmosphere of economic and geopolitical uncertainty are serious mix of challenges for luxury companies. It is important for the purveyors of luxury goods and services to reinvent themselves in response to trends, communicate the brand’s distinctiveness powerfully and authentically, keep their exclusive cachet, maintain brand desirability in an increasingly crowded luxury market.
So let’s end the debate and act now. After all, time is luxury.
The 16th edition of The Luxury and Creation Summit will be held on January 30th, 2018.