Luxury Redefined: white paper analyses how brands can connect with today's consumers

The luxury industry has been having a hard time keeping up with their consumers - while wooing and educating them in the 2010s, it did not anticipate that they would outgrow their teachers. Hence, media brand Highsnobiety together with the Boston Consulting Group surveyed more than 6,6,710 consumers in eleven key markets - China, South Korea, Japan, the US, the UK, Spain, France, Italy, Switzerland, Germany, the UAE - and published their findings in a white paper.

“Luxury fashion’s efforts to go mainstream worked. But the shoppers and fans who spent that decade consuming, learning, and evolving began to feel disenchanted by the luxury promise. It was a classic case of the student becoming the master. Luxury brands couldn’t consistently deliver the ingenuity and craft these savvy new buyers expected, and when they did, it came at an exorbitant price,” explains Noah Johnson, editor-in-chief of Highsnobiety.

What can luxury brands do to understand what makes their customers tick, what they expect from a brand? What do luxury consumers want their favourite brands to do differently? Are we living in a time of post- or peak-luxury?This is what the white paper “Luxury Redefined: Stop Selling the Dream. Start Fitting Into Reality” set out to explore.

“Luxury shoppers are smarter than ever, and they expect the brands they buy to be as smart as they are – if not smarter. They see the ways fast fashion is mimicking luxury, and vice-versa. The crisis the industry is facing isn’t about demand for nice things; it’s about a growing aversion to outmoded ideas of marketing and selling those things,” cautions Johnson.

Today’s luxury consumers want stability and authenticity

Stability and authenticity are the keywords that today’s luxury shoppers are looking for. They want brands and products that are real, that fit into their world, that will stand the test of time and not just be part of a trend.

“A higher importance is being placed on brands’ cultural fluency. Fashion fans have grown suspicious of gimmick, overvaluing and diminishing material quality. They want their clothes to catch up – to be and feel as smart as they’ve become,” is another insight.

Luxury consumers will buy into brands that get them

Unlike in earlier decades, today’s luxury consumers are done with brand worlds that they are expected to fit into. Instead, they want brands and products that fit into their lives, seamlessly. That means if they reject luxury brands or retailers, they are not rejecting luxury per se but outdated ideas as the survey finds.

“We're at a tipping point. The old fashion model, the dream world built on exclusivity, inflated prices and artificial hype, is crumbling,” confirms Luigi Bernasconi, merchandising consultant from Lugano, Switzerland.

The sentiment of buying luxury but not just anything is supported by increased spending on luxury products in the past year, which has gone up for all age groups and product categories but most for clothing, footwear and accessories (for 94 percent of Gen Z consumers and 97 percent of baby boomers) while Gen Z and millennials are more likely to buy jewellery and watches.

“It feels sexier to buy hyper-niche local brands or products made by friends of friends and mix with vintage than to shell out on an obvious luxury giant whose quality is likely subpar anyway,” states Lara Casselman, an art director from Berlin, Germany.

Newness is no longer enough

While products used to have to be new, the latest, trend-driven, this no longer holds true, posing a dilemma for an industry that is used to fashion cycles. “Within our lifetimes, new has become synonymous in many ways with worse: made cheaply, reactively, perhaps with AI, and limited creatively by the demands of a global market. Laments of nothing ever really being new, anyway (such as in the film industry: it is all remakes, sequels, rehashes, retro), and of algorithm fatigue hindering a sense of discovery make that quest for a hot take feel ever more beside the point,” explains the paper.

But this is also an opportunity: Vintage has probably hardly ever been so much en vogue, and luxury brands do well to dip deep into their archives for hidden treasures. And speaking of treasures, the hunt is as much part of the purchase as is the product: “Finding something unusual (and how you found it) is becoming just as important as the garment itself,” finds the study.

What can the luxury industry do?

According to the white paper, a new definition of luxury must surface. And in view of fast fashion and technology, it also needs to slow down: “The pace has changed, too - fast fashion accelerated trends to the point where people are now pulling back and craving something with more depth... It's not that they're not spending, but they're more discerning - they want pieces that will last, that feel like an investment rather than something disposable.”

In addition, it is good to know that luxury is not dead, it is just being redefined. And brands and retailers would do well to note that this is no longer a top-down approach with them dictating what is in but a bottom-up approach to what is desired and fits within a cultural fluency. “As time progresses and access to information becomes more readily available, audiences are increasingly self-educating, seeing value in becoming an influencer’s influence rather than the influenced,” is the verdict.

Redefined Luxury

Straightforwardness is a characteristic of redefined luxury, starting with materials that are superior and cleanly executed. Highsnobiety has identified five areas that have changed or need to change for anyone who wants a piece of this redefined luxury industry: Where there was aspiration, there is now relevance; where there was fantasy, there is now reality. A focus on brand aura has changed to product proof and hype drops to lasting quality. Instead of novelty, there is now legacy and what was future facing now needs to turn into future proofing.

These new paradigms are supported by luxury’s desirability drivers: quality and craftsmanship, unique designs, a clear set of values, independent brands, a strong social media presence, a sense of exclusivity and status and timelessness and heritage.

This aligns with what consumers consider most relevant when informing themselves about a brand: innovation and design philosophy, craftsmanship and the production process, its core values, purpose and mission, and ethical and eco-friendly practices.

The white paper goes on to highlight other important areas, like consistency and simplicity, and reveals who inspires respondents’ style choices, as well as offers a case study.

“Luxury fashion is being reclaimed by consumers who are savvier, more intentional and less excited by hype. The brands that will define the next era are not necessarily the loudest, largest or even the most innovative, but the ones that listen best – those who trade spectacle for substance and status for storytelling. In a market saturated with sameness, authenticity is key. And rather than price dictating relevance, brands will be smart to rely instead on craft and cultural fluency,” is the conclusion.

The complete white paper “Luxury Redefined: Stop Selling the Dream. Start Fitting Into Reality” can be downloaded from the Highsnobiety website.