In June of this year, Pete Kim asked, “What is luxury, anyway?” It’s clearly more than Merriam-Webster’s definition of “something adding to pleasure or comfort but not absolutely necessary.” In fact, it’s probably best defined by Kreayshawn in her annoyingly catchy tune, “Gucci Gucci” where she explains that:
(warning, explicit lyrics)
“Gucci Gucci, Louis Louis, Fendi Fendi, Prada
Basic bitches wear that shit so I don’t even botha”
So there you have it. To truly be luxury, you have to have an element of exclusivity. Historically, designer brands have met this requirement by attaching a very high price tag. Some brands, like Hermes, make their products in limited supply to further engrain the exclusive element. Who can forget the scene in Sex and the City where Samantha tries to purchase The Birkin?
But what does this actually mean in today’s world, where brands are investing in social tools for the purpose of being ACCESSIBLE? Simple – luxury is slowing dying off. Bankruptcy in the luxury world is not unheard of, i.e. Narcisco Rodriguez, Escada and even Versace has been through several difficult years and nearly filed for bankruptcy in 2004. And when a brand needs to make its products more accessible in order to survive, it is no longer luxury. We’re seeing more and more high-end brands tapping into a wider audience, due to how the economy has impacted retail and shopping behavior in the last few years.
According to “The New Face of Affluence,” an in-depth study about the attributes that drive purchase decisions of the “New Affluents.” the qualities that are important are quality, aesthetics, uniqueness and authenticity, and it doesn’t necessarily have to include a high-price tag. Basically, the new, wealthy of today aren’t as interested in brands and, instead, are seeking more brand interaction, “a dialogue, based on integrity, authenticity and performance.” This is nothing new for brand marketers, but for “luxury brands,” this a step in a new direction and one that more and more designers are following.
In the last several years, designer brands, such as Missoni and most recently Versace, have collaborated with trendy, wide-audience-reach retailers to deliver products with the name but without the hefty cost. Versace did all it could to make the affair as glitzy and glamorous as any New York runway show, including having celebrities in the front row and Prince play a show. H&M promoted the launch in every medium possible, including constant tweets leading up to, during and after the event as well as through it’s new Google+ page.
Great for H&M. But what does it do for Versace? It may tarnish the label as not being “luxury” but does it matter if it keeps the brand alive?
Brands, such as Burberry and Oscar de la Renta, have delved into social networks in order to connect better with the passion points of a wider audience. Oscar de la Renta is doing a fantastic job of connecting with fashion-obsessed fans. Try to ignore the gorgeous dress in the default picture and you’ll see that the posts offer their fans access to runways shows, events and, my favorite, behind the scene peeks at Oscar himself working on a dress. The brand even has a monthly Facebook exclusive product that it sells on their Facebook page. Could this be a different element of exclusivity?
Burberry is probably the best example of brand who has successfully re-established itself in the high-end market. The brand took a major dive in the 1990’s, being associated with “chavs” and worn by UK football players. Through a major re-branding effort, strong investment in social and digital media and with the help of Chief Creative Officer, Christopher Bailey, Burberry has been named the tenth most powerful luxury brand of 2011, according to Millward Brown Optimor’s annual list of the World’s Ten Most Powerful Luxury Brands. Most recently, the brand launched the Burberry bespoke program which lets customers design their own trench coat, offering up to 12 million options, including the color of thread. The price of the coat can range up to $9000 – not so accessible.
Could the key be to offer unique brand experiences but only to a very select fortunate that can afford to be part of the process? The point is, luxury is no longer what it used to be. The tier of brands that evoked true and absolute luxury, the way we knew it, is diminishing as consumer behavior changes with the economy. Today’s consumer is the connected consumer. They’ve been raised in a digital world and, more importantly, they’ve been raised knowing that as consumers they have a lot of power. Not only do they expect transparency and authenticity, but they expect to have access to brands for a dialogue or even to be part of the product development process. The brands that have realized this and started integrating digital media and social platforms into their strategies are seeing the benefits.