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TRANSFORMATION NEW LUXURY VALUE #5

New Luxury is no longer about ownership; it is about access and experience.

Don’t fear failure. Fear being in the exact same place next year as you are today – Michael Hyatt

Luxury is all about legacy; these are items that should never be discarded, brushed aside, or left to gather dust. By their very essence they are designed to be timeless, ever-tantalizing, and to be treasured by generations to come. Yet all around the world there are superyachts sat dry in ports, tropical villas left untouched, private jets waiting on the runway, and designer dresses and jewels stashed in the back of walk-in closets.

Invoking the Immortal

We are knee-deep in the sharing economy and it’s here to stay, yet luxury has yet to embrace this change, despite it having all the potential both to bloom and to protect our industry. Brands who are willing to oversee the second and even third lifestyles of their luxury goods can not only benefit from a second income stream but will also be better equipped to stay on top of counterfeit problems, reduce the impact of waste on the environment, and have even more mesmerizing material to grow a story around their products.

Imagine how compelling it would be if you could trace a diamond necklace from its excavation to it being worn and loved by a business woman in Tokyo at an inaugural event, passed on to a celebrity to wear on the red carpet in Hollywood, and then worn to a charity gala by someone else in New York. That a journey, what a story – the product becomes more than an inanimate object left to fester in a jewelry box, it becomes an experience that constantly gives pleasure.

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The Era of Nownership

The sharing economy crosses boundaries, applying also to products as grandiose and big as a boat, a mansion, or even a desert island. In an article titled The Devil Shares Prada, this new era is summed up in a simple paragraph;

“Rental brands are gaining popularity, demonstrating the new luxury consumer’s desire to be spontaneous, without the pressure of permanent ownership,” Nicole Victor, partner and senior VP of planning at New York-based agency Rumble Fox, recently told me. She added, “As the notion of ownership of goods has changed and the desire to own goods like homes and cars has decreased significantly among younger generations, luxury brands will have to find a place in the new sharing, less acquisitive generation.”

Unlike the baby boomers, Gen Xers and certainly millennials are less obsessed with the idea of ownership. Even high up in the chain of affluence, the sharing economy isn’t about affordability, it is about flexibility, convenience and if truth be told – being raised in a post wall street crash world. Millennials witnessed a world where ownership could easily be pulled out from under your feet – they understood that simply having your name on something is a false sense of security. Instead of valuing ownership, this new generation value access and experience.

Creating a Stronger Global Community

While the sentiment may sound cynical, the sharing economy is actually a wonderfully progressive step into a brighter future. Not only will it have a dramatic impact on reducing waste by making us reconsider our throwaway culture, but it will also create a stronger global community.

There are now companies out there who are already starting to get ahead of the game – AvYachts offer shared yacht ownership programs, rent the runway invites users to buy less and wear more, and The Wow House Company invite high net worth individuals to pick sensational properties for short- or long-term stays. Even millionaire celebrities are renting; from Justin Bieber to Rhianna.

Like Ana Andjelic points out in that same article on the sharing economy; The white-glove, invisible concierge, one-step-ahead-of-you service without the burdens of ownership — like worrying about depreciating assets — is how the sharing economy is going to win in luxury.

The sharing economy is going to win in luxury.

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Recrafting Creativity

The transformation train is pulling out of the station and luxury brands need to find ways of making sure they are onboard. Change can be challenging, it can be frightening, but we have always been leaders in our industries. We have long been the innovators, those willing to tap into the depths of the imagination and take risks. We should be seeing these times for the benefits they will bring – the chance to think big and to pull our brands from the swamps of stagnation.

Like this article for Forbes points out in its piece on Luxury Brands; Innovation is No Luxury But a Necessity;

Innovation is not easy; it is not fast; it cannot be dialed in or found by scanning a balance sheet or reams of data. It requires creativity in the form of human capital. Fortunately for luxury businesses, creativity is not a skill that is lacking. Quite the contrary.

Creativity is what gets a brand into the luxury game, and it is creativity that will keep the luxury industry and luxury companies successful in the future, as this insider expressed, “The dynamic and innovative nature of the industry generates resilience and resourcefulness.”

Daring in Digital Form

Digital and social do sit at the heart of this digital transformation, an area which luxury has recognizably struggled with in the past. Anyone working in luxury marketing was quick to add to the panic that brands who didn’t get online were going to be left behind, and its true – but there’s another element to that conversation too. With speed comes sloppiness and some luxury brands, many in-fact, didn’t consider the need for valuable and authentic connections via these digital and social spaces.

In a Q&A interview for Forbes with Rebecca Minkoff, she attributes much of her early success to the willingness to deal directly with social media, she says; ‘I want to know what you’re thinking and what you want that I’m not providing you. Let’s democratize this. Technology was a vehicle that we could disrupt, and that we could make our own way. We didn’t see a clear, defined path by going the traditional way. Technology allowed us to thrive without that.’

For luxury brands who truly want to transform under the ever-roving digital eye one of the most important factors is curating a seamless system where big data and the personal touch can co-exist without disrupting each other.

Turning Stores Into Destinations

Now, something called reverse omnichannel is already a term playing on the mind – digital is an exciting space and now the brick and mortar stores and person to person encounters need to reflect that to keep beautiful brand consistency. A keen point highlighted in this piece from McKinsey; Digital is no longer only a sales or communication channel. Instagram becomes the new store window, and digital now becomes the source of inspiration for reinventing the role of the store and the customer experience.

Look at Bentleys Theatre of Dreams in Dubai with its seven floors of immersive brand experiences, skyline roof terrace, and luxury coffee bar as soon as you walk in the door.

Rebecca Minkoff’s smart mirrors in the fitting rooms so buyers can seamlessly call for another size, order champagne or pick products that complement a piece without disrupting the flow of their shopping experience.

Givenchy turning their perfume counter into a cocktail masterclass by partnering with Café Royal and curating delectable drinks that reflected their signature scents.

To transform a brand in the modern world, we need to think outside the box, we need to be immersive, and we need to turn our stores into destinations that reflect our unique positioning and exceptional standards. But remember, real transformation requires honesty.

Change can be challenging, it can be frightening, but we have always been leaders in our industries.

Nailing the New Equation

We know by now that consumers own more of our brands than we do; along with B2B and B2C there is a new equation in town – C2C. Customers are sailing this ship, and it’s time for luxury brands to shake off the comfort and slumber of the past and find exciting and compelling new ways to be creative in their industries.

New Luxury recognizes the calling cards of creation and innovation that will take us into exciting new pastures. It may be hard to see it from the inside, but by building beautiful experiences, curating a warm sharing economy, and finding compelling ways to think and connect – we are all together making the world a better, brighter place.

Transformation is a New Luxury value. Now, let’s explore the next luxury anti-value.

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NARRATION