There was a time when luxury was all about displaying elitism through logos and labels. Now, however, there is a shift toward consumers finding subtler ways of "showing off". Moreover, with only one in six saying they like the expensive items that they buy to feature prominent brand names, perhaps the age of logo fatigue is upon us.
It became clear that it was time to sit up and take notice when that bastion of the signature motif, Louis Vuitton, ran an ad campaign in China – one of the territories frequently cited as still worshipping at the altar of upmarket bling – that carried no branding at all. The ad featured a photograph of Chinese actress Fan Bingbing drinking tea, with a pastel-coloured, logo-free LV bag at her side; the image contained no brand information.
So why are we seeing a more discreet tone in the world of luxury, and what does it mean for brands in this territory if consumers are moving away from traditional status symbols?
One influencing factor is the wider economic climate. When so many people have felt the full force of the global recession on household budgets, whether through unemployment, pay freezes, zero-hour contracts or escalating household bills, there is perhaps an inevitable impact on the way they view luxury.
James Murphy, editorial director of Future Foundation, says: "The level of economic growth we enjoyed in the UK from 1993 to 2008 is still broken. There’s a debate taking place about what is an appropriate way to live, given these troubled economic conditions. In such circumstances, it becomes simply not cool to parade and show off opulent ownership of wealth.
"One thinks of the ‘Flaming Ferraris’ in the 1980s, who set fire to £50 notes – there is nowhere in Europe where that would be regarded with anything but disdain. In France or Spain, where youth unemployment is at 50%, you wouldn’t drive a Lamborghini down the high street, honking the horn to draw attention to yourself."
It’s not all about the economy though; the nature of luxury itself is changing. Luxury markets tend to be dynamic and influenced by social trends, and one consequence of the economy improving up until 2008 – that is, before the recession hit – has been a democratisation of access to luxury.
This trend is evident in several areas: think designer brands creating ranges for high-street fashion chains; luxury-chocolate concessions in railway stations; or Champagne’s shift from "only for very special occasions" to a relatively common tipple. The masses have gained access to the elite’s lifestyle,
albeit in small ways.
"More buying power is trickling down through the social classes," says Murphy. "So what are the benefits of luxury to the consumer? You might get a better product, you might get the endorsement of lifestyle success, you might be able to display wealth and you might crave luxury because of the other benefits it brings, such as freeing up your time and alleviating stress (think concierge services). The final dimension is that as we get more used to it, you might not see luxury as an object or possession but as an experience – for example, super-luxury eco hotels."
One school of thought is that Western culture’s relationship with luxury in developed countries is starkly different from that in emerging markets. If great shows of ostentatious wealth are considered crass in the UK, they are de rigueur in Russia.
The explosive emergence of a middle class, hungry for ways to demonstrate its new-found wealth in markets such as China, has brought a generational step-change in income and education, as well as access to – and availability of – consumer products.
David Blair, managing director of design agency Fitch, says: "In the UK it’s more of a ‘place’ thing, for example Bond Street and at the point of purchase. Brands still want a highly visible retail space, whereas consumers are moving toward a more discreet approach to wearing the products."
Nonetheless, while he acknowledges that there is a greater proportion of people in Asia who fit the profile of wanting to flaunt wealth, Blair also argues that there is a subset in Western markets that still aspires to this, perhaps most easily characterised as "WAGS". "Some people are happy to display the badges, but it’s split more subtly in established markets. There are three types of luxury consumer: those who can afford and don’t want to flaunt; those who can afford and do want to flaunt; and those who can afford but find it intimidating," adds Blair.
Access to information has sped up the adoption of fashions across borders, and while there may be differences between markets that go for exuberant displays of wealth, compared with those that are more understated, ultimately, many believe that we will end up at the same place.
The economic growth we enjoyed in the UK is still broken... it's simply not cool to parade opulent ownership of wealth.
There is some suggestion that it is already happening. Martin Nieri, chief executive of creative agency Partners Andrews Aldridge, says that he has noticed a backlash against logo-brandishing in China. "The jitters in the market started last year with an economic slowdown and the political transition, and they have been exacerbated by the crackdown on corrupt gift-giving. Both have changed the nature of what the once-aspirational logo means within Chinese society. It was the mark of legitimacy – the very expensive badge of having made it – but now it is starting to be seen by the Chinese population as the spoils of ill-gotten gains," he says.
Perhaps, rather than dividing the mature and emerging markets into two separate camps, a more finely differentiated insight for each country is needed. Ben Jaffé, lead strategist at ad agency Inferno, has researched these issues as part of work he carried out for Saudi jeweller Ghassan. He argues that we don’t yet live in a homogenised world. "There are factors that govern taste and style and how they’re expressed, such as whether a culture is wealthy, hierarchical, progressive, masculine, collectivist or repressed, or any of the opposites or combinations thereof," he says.
In Saudi Arabia, where the burka is ubiquitous, there is limited opportunity for displays of status for women. "In that environment, branded accessories such as handbags and jewellery offer a chance to stand out from the crowd and demonstrate wealth. Hidden behind the veil, the chance for women to define a wrist or fingers through expensive jewels holds great significance," adds Jaffé.
There can be few things more synonymous with this market than private yachts. Yet even here there is evidence of more discreet luxury and defined territorial differences.
"There’s quite a distinction emerging between the British and European buyers and their counterparts within Russia and parts of Asia," says Rory Trahair, head of marketing for superyacht specialist Edmiston. "I think the depth of the recession in Europe has shifted attitudes hugely, so that buyers are much more price-conscious and aware of the perception and attitude of others around them, which, in turn, has led to them being a little more understated in their purchasing activity. For once, understatement is king."
Perception and attitude
However, he adds: "In some other countries, and key markets for us like Russia, we are seeing more of a focus on higher sale prices, with buyers wanting to be seen with the latest symbol of wealth, with a higher price, of superior quality and, especially with regards to a yacht, substantially out of others’ leagues. It means we have to ensure we have very different approaches for our brand marketing in these countries – more subtle copy lines and imagery in Britain and Europe, with a greater focus on size and status for other countries."
In the West, we’ve gone from an age of philanthropy and Quaker industrialists’ ideals of workers’ living standards and education attainment, to mass wealth accumulation and the all-powerful shareholder.
The luxury aesthetic and the relationship of wealthy people with their money is evolving. In the West, we’ve gone from an age of philanthropy and Quaker industrialists’ ideals of workers’ living standards and education attainment, to mass wealth accumulation and the all-powerful shareholder. Having said that, the balance may be being slightly redressed through initiatives such as the Bill & Melinda Gates Foundation.
In addition, people have new ways of showing off, as conspicuous "over-sharing" usurps conspicuous consumption. From "stealth boasts" on Facebook to the fine art of a 140 character-filled brag on Twitter, consumers are using sharing as a status symbol. No need to admire my Armani suit, just look at my perfect family and our Maldives diving pictures.
"Memories are more important than products, so it is natural that we want to share these," says Stuart Dickinson, creative director at brand strategy consultancy Futurebrand.
He believes that luxury is now about the story behind a product. "If you’re spending a lot of money on things, you want to be sure it’s worth it. If brands are clear about their story, they create space between a luxury brand and something that’s a few tiers below," he adds.
So if old luxury is characterised by over-consumption and ostentation, the new luxury involves people looking for the story behind a brand or label. Rather than buying things for buying’s sake, there is a need for authenticity. Better-educated and smarter, consumers no longer need the authority of designer brands in quite the same way, ushering in a more subtle sophistication to luxury.
While the democratisation of luxury is gaining momentum, there is perhaps the inevitable counter-trend of extreme luxury: recreating the exclusivity that is lost if luxury becomes affordable. This is evident across various sectors, where the price ceiling of super-luxury goods has risen greatly. Extreme travel is one example, where the search for exotic and unusual holidays fits the broader trend for experience-based luxury. As worldwide travel has become accessible to the many, those with the means want something that sets them apart as the few.
Another sector in which this is gaining momentum is alcohol. "In Western Europe, ultra-premium spirits are doing well," says Jonny Forsyth, global drinks analyst for Mintel. The super-rich have been flocking to the category, with brands such as Grey Goose and Cîroc performing well. Even areas such as tequila now have expensive options.
The rise in the everyday popularity of Champagne may have benefited short-term sales, but it has had an impact on its long-term brand positioning. "Special cuvées and vintages are being created to try to block access to the majority and get back respect from the minority," says Forsyth.
Diageo, meanwhile, has a dedicated Reserve portfolio for its luxury products, with John Walker & Sons Odyssey triple malt whisky (pictured, and which costs about £580 a bottle) and Johnnie Walker Blue Label (£130) being two of the stand-out examples.
Nick Temperley, head of Diageo Reserve, GB, says: "We are witnessing the emergence of a consumer focused on experiential luxury. In some categories, consumers want a deeper level of involvement and understanding of the history and heritage of the brand when it comes to their luxury purchase. There are many new variants, at high price points, that people across the world are prepared to pay for because of the rarity and quality."
Typical buyers range from collectors to high-net-worth individuals, as well as an emerging consumer who isn’t necessarily in the high-income bracket but is, as Temperley terms it, "more discerning toward experiences and brand purchases".
Experiential luxury accounts for almost 55% of the total luxury spend worldwide, according to Boston Consulting Group, and has grown 50% faster than sales of luxury products.
"There is a growing desire to discover and share experiences and ways of consuming our brands. So
we work closely with our [on-trade] customers, such as The Artesian or Oblix at The Shard, to ensure that our brands are experienced in exciting and innovative ways," says Temperley.
Experiential has been vital in conveying the heritage and craftsmanship behind these brands. In the case of John Walker & Sons, a 1920s yacht, Voyager, has been sailing round the world hosting high-profile events.
With luxury brands, packaging design is vital in maintaining equity. For Odyssey, for example, it is a crystal decanter whose "swing" design keeps it upright, no matter how choppy the waters.