The Luxury Report 2024
Luxury is one of those intangibles that doesn’t just divide opinion, it cracks open social chasms. Especially because from a definition and meaning perspective, the term is currently occupying a precariously liminal space. Plenty are yet to realise that though – specifically the willfully ignorant and/or those ‘too posh to function’. The so-called ‘forward-thinkers’ and supposed tastemakers who chase fleeting fads; gloryseekers who get their hit from a headline.
The reality is too many of us are confusing what’s trending with trends themselves. Trends are not hashtags, they’re directions – lines along which energy and activity flows. Not quite Barbiecore, they’re significant, persistent societal or cultural shifts. Not chasing cool to win sales.
These culturual constructs are where the opportunity lies for brands. Particularly with luxury where, superficially, the only unifying factor is price. Luxury is thought of as this amorphous thing, but it’s not one thing. It’s coded in a million different ways, vastly different depending on which category is at play. Context is everything in an overly-generalised world. As is thinking – and seeing – differently.
We don’t dislike the word luxury to be contrary for the sake of it. We dislike it because, in its current sprawling context, it feels dusty and lazy; inactive instead of proactive. It’s too traditional, too buttoned-up. Too often elitist and arrogantly superior with no evidence to support that claim, instead resting on laurels of ‘exclusivity’.
Whereas actually, all the perks, privileges and profits attached to luxury – liquid clientele, bigger budgets, creative scope – means any brand described as such should be superior, category-defining even. Driven by R&D focused on the inside as much as the outside; elevated supply chains; second-to-none experience; not being afraid to spend money to do things better than how it's been done before. Especially when ‘poly-crises’ is an accurate summary of the world stage.
The Global Wealth Landscape
Understanding the global state of wealth as it is now is essential if we’re going to envision the luxury landscape and its horizon. It’s all relative, etc., etc.
To do so, we have to see beyond the front-page bar charts and line graphs. We have to go deeper, studying the global drivers that become the unseen slipstreams on our maps; the flowing arrows accelerating market expansion in some parts of the world yet stymying growth in others. Drivers like evolving demographic lay, cultural waves, advanced technological adoption, geopolitics, climate chaos, migration, travel, urbanisation, and, tedious it may be, COVID’s lingering effect.
Within the next decade or so, much of Europe and the United States will have record old-age populations while young workforces will grow exponentially in regions across South and Southeast Asia, the Middle East and Africa – regions previously overlooked by luxury in favour of the West’s historic monopoly.
For these brands, significant swathes of their clientele are considered to be ‘ageing out’: a sentiment that has driven many marketing teams’ abrupt pivots toward generations Z and Alpha. In terms of spending power, we’re looking down the barrel of The Great Wealth Transfer, the end of boomer-majority and much of what their world represented.
At the same time, a total focal 180° to younger audiences poses the risk of fractured brand perception and alienating loyal – potentially decade-spanning – clients who may not have the majority spending power but still possess a healthy portion. Longer lives and the money divide are making way for a flat age culture which, paired with other shifting social paradigms like gender fluidity, beg the question: are we really post-demographic?
When it comes to audience capture, demographical data is being shunned by a select few – regarded as entirely out-of-touch and non-representative of modern audiences. Though inclined to agree, shifts in demographic lay can be indicative of greater shifts (in lifestyle, behaviour, values) at a foundational level, when bolstered by psychographic research and patterns.
The whole world knows ‘ultra-high net worth’ is a lazy classification, because no one person is defined by a number alone. No matter how many zeros are tacked on the end.
When we talk about meaningful innovation with our clients, we start by debunking a few myths. The first is that innovation is the equivalent of decoding the U/HNW individual. The industry as a whole is guilty of conflating this cohort into a two-dimensional segment with a homogenous set of needs, wants, behaviours and aspirations. But sharing a wealth bracket does not reconcile every other facet of personality into a singular persona. Nor does sexuality, gender, age, race or ethnicity.
The Diversity Quotient
Wealth is flexible. We exist in our kids' TikTok channels. Teenagers have investment portfolios. The private members’ club – a definitive symbol of old luxury – has been coopted. What was once a very siloed, snobby, stale, “this is our world” kind of luxury, now doesn't exist.
One of 2023’s big trends was the rise of diversity, inclusion and equality in the ESG agenda. What we’ve seen since is an abrupt plateauing and now vanishing of that priority. The transparency of so-called glass box brands has gotten ever-foggier as trends ‘easier’ to implement have emerged.
Diversity shouldn’t be a purpose, it should be a given. It should be embedded into the sinews of our collective psyche, not a tokenistic move to make a sale. So though we encourage clever brands to push forward into a future framed by these shifts, don’t negate the importance of the callouts that came before.
Key Trends For 2024
EMERGING: THE FALL OF STATUS
Social Rank Has Been Liquified
The pessimists among us are perhaps familiar with the acronym VUCA (volatile, uncertain, complex, and ambiguous). Now BANI (brittle, anxious, non-linear and incomprehensible) is emerging as a more accurate description of societies today.
Though constructed with fairly negative vocabulary, these acronyms reveal a desire among cultural theorists to organise a disorderly public. Disorderly thanks to the blurring of previously impenetrable lines of class that has served to fragment identity further, creating a kaleidoscopic society that isn’t linear or hierarchical, but colourful and liquid. Mutable and in motion. Rapid and permeable.
In those fluxes lies a duality of status and culture. In 2023, the dictators of status in modernity aren’t necessarily the aristocracy. The tie between class and cultural power was severed long ago, when subverting convention became the new vogue and the figures front-and-centre of our comms channels shifted from the financially elite to those with a form of cultural conviction and social capital. They’re not the influencers of the 21st century’s early teens, they’re the curators of current tastes, rituals, aesthetics and knowledge.
The fabric of status is being unpicked and intricately rewoven into a pattern of tribalism and fandom. It seems that life’s wear and tear – especially that of the last 3-4 years – has actually made us more connected, rather than stripping it away. Encouraging individuals to cluster in their preferences for certain arbitrary rituals, to seek out belonging ultimately.
As a whole, we needn’t be in denial over the nature of the human condition. We crave status and pursue aspiration. But neither is about superiority over other individuals or groups.
Curation is the crux of modern aspiration. We shape ourselves in reference to various things we feel are reflective and expressive, on an individual level and collective basis.
Take Apple’s tech. The ubiquitous demand for iPhones and MacBooks stems from far more than their high price point. There are undoubtedly more expensive, luxurious, digital devices to be had but the association that comes with the product – the owners are creatives, those who value craftsmanship and aesthetics over supreme technological function – is what people are buying into.
According to VICE Media Group, 9 in 10 young people say authenticity is incredibly important to earning trust and Merriam Webster crowned ‘authentic’ as their Word of the Year 2023. Not exactly groundbreaking data but does affirm one thing: to get audiences onside, brands need to live up to perception. That’s easier said than done when perception’s literal definition amounts to subjective interpretation. But there are proof cases.
In 2022, cult activewear label Patagonia dominated headlines with the news that the brand’s ecologist founder, Yvon Chouinard, would be donating the entire company to a trust and non-profit in order to fight climate devastation.
For four decades Patagonia has been the pinnacle of environmental leadership, in the corporate world and wider culture. They were one of the earliest B Corps, have been donating 1% of profits to environmental groups since the 80s and actively campaign against fast fashion and unbridled consumption. Their ecological principles are hardline and their actions match up.
Another example twists age into an aspirational quality. Earlier this year Beck’s Brewery decided to not only acknowledge the reality that our taste buds change with age with Beck’s 70+, but position it in such a way that younger buyers look forward to the day they can try it. Exclusively made for the taste preferences of more mature consumers, the launch was accompanied by an anti-ageist campaign and a 70+ VIP event to sample the beverage. The campaign’s creative director summarised the move well:
“Aging well is being able to continue enjoying all the most delicious experiences in life – including a great beer. It is a dialogue with the pro-aging culture movement, which understands that age does not limit people’s desires and aspirations.” – Rodrigo Barbosa, AKQA.
The perfect liquid example of liquid social status.
RISING: AI & AUTOMATION
You Can’t Code Soul
We’ve levelled up the age of automation. Qualifying objects, rituals and brands out of our lives in favour of efficient and ‘hands-free’ existing. Ownership is moving towards subscription, ‘less is more’ has become embedded in the collective psyche and tailored-to-the-individual strategies are in the spotlight. Rightly or wrongly.
‘Personalisation’ as a concept: not exactly disruptive but fine. ‘Personalisation’ in practice? Bullsh*t, for the most part. Normally limited to an obviously automated email coding your name into the opening line. Even hand-pressed initials into some form of beautifully crafted leather apparel or accessory takes some spicing up to garner any real excitement.
Yet the narrative of hyper-personalisation is inescapable. Popping up at least thrice in any sort of industry dialogue.
It’s an oversaturation that highlights an interesting tension between two diametrically opposed things. The desire for hyper-personalised everything versus the innate human want for surprise – to be delighted by the unexpected and unanticipated. We have so many options now we’re paralysed by choice – in need of a consultative layer that sits between. The question comes down to: should that consultative entity be human or artificial?
Throughout history, technology has frequently triggered fears of mass unemployment. Robots have been on the cusp of taking over for more than a century – the economist John Maynard Keynes blamed tech (in part) for the Great Depression while 1920s headlines from The New York Times seem eerily prescient in hindsight: “Will Machines Devour Man?” / “March of The Machine Makes Idle Hands”.
Now firmly in the artificial intelligence era, with the tech more open and prevalent than ever in the consumer space, businesses run the risk of not just idle hands but idle minds.
Much of luxury creates its myth through marketing. Now there are a million plug-ins for that. Sure, it’s cheaper in an economical sense, but ‘cheap’ has a second meaning. Connecting with audiences through AI cuts out even more humanity and soul from the interactions people have with brands. It feels distasteful and lazy. It feels like the stale luxury of yesteryear but with a shiny new toy.
Human beings are quite perverse when it comes to what we value. All of us – if we’re honest with ourselves – have this borderline sick need to know that the things we come to value are the aggregate of blood, sweat and tears. Persistent messiness in the pursuit of creation and craft. That’s what imbues soul.
Brands who tell their stories of craftsmanship beautifully range from RIMOWA, whose iconic groove design established in the 50s is inspired by the golden age of aviation, to Bottega Veneta, whose principles are rooted in preserving traditional Italian techniques. Rooted so deeply that the house recently announced the opening of their Accademia Labour et Ingenium (Academy of Craft and Creativity) to skill a new generation of artisans.
Great creativity is born of things that are uncomfortable. It takes time to chisel a thought or idea into its final form. And the beauty of most things is their story, context, bias and flaws. The human elements AI doesn’t have. Tech bros can only anthropomorphise so much.
For luxury brands, it’s a toss-up between speed and soul. We beg that if you can’t balance the two, pick the latter.
ENDURING: BRAND WORLDS
The Sum Of All Parts
In 1957, Walt Disney (arguably one of history’s greatest visionaries) mapped out his business model – a visual representation of how every part of the Disney blueprint catalyses the chemical reaction that creates the product they are selling: magic.
Spanning the motion picture studio, television, music, print publications and comic strips to Disneyland, Disney World and the strategic synapses in between, the diagram demonstrates how everything drives the success of everything else. Mapping the brand universe, seven decades ago.
Unsurprisingly, since the 1950s brands have followed Walt’s lead, branching out beyond the sale of a singular material product into versatile inventories, global markets, service and experience. Brands without worlds today – no matter their category – are unlikely to carve out a place in the mind amid all the competing noise.
At Matter Of Form, we call it Brand Interactions™. Just as Aristotle believed the whole is greater than the sum of its parts, we know that a brand is a sum total too – of every interaction it has with a person which, when amassed, becomes a staple to consumers and culture alike.
On average, a person has 250,000 micro-interactions and 45 major interactions between brand discovery and conversion. Instead of trying to remove those in pursuit of a totally seamless funnel, leverage the power of healthy friction in the end-to-end experience. Add meaningful moments indicative of ethos or values that will deepen connections with consumers.
Those moments could be playful filtering systems – online plant store PATCH provides selections on how hard the greenery is to kill for their less green-thumbed visitors – they could be as simple as a label – American apparel company Carhartt experimented with a jacket tag that encourages resale by listing three lines for each owner to write their name, becoming part of the piece’s story. Or these moments can manifest as collaborations between brands and the trusted aggregators of micro-communities they wish to attract.
Because brands today have become multiplayer and multiversal, our framework for meaningful innovation must expand and contract — like a muscle flexing to the will of the market. Brands are interpretive, co-created and collaborative. We’re living in the age of the remix, open IP and community-centric creativity so we need to craft circuits of experience that feed into those shifts.
Expectations and experiences that businesses should invest in are expanding to include a new dimension as they prepare for a multiplayer future in which brands function as toolkits, create shared economies, prioritise mutual value generation and provide open-ended pathways.
The future is up for grabs. Why not take it?
One would hope that luxury, because it's not after making a quick buck but rather building a timeless brand, can take a long-term view without being buffeted by the winds of hype. Avoid gimmicks, deliver to your niche, and create microcosms of community and fandom instead of chasing fleeting fads.
For many, it’s just a case of reprioritisation. Brands guilty of taking the wrong things seriously like being the first into the metaverse or incorporating irrelevant tech are crying out for a reshuffle. Solidify a core competency and work outwards from there; play in the bizarre tensions of consumer desires and behaviour. Surprise your audience.
Brands are built in the mind. We know that. Walt Disney knew it. Now so do you. We visualise them in a way that studies every element, telling a story through touch points, powered by pragmatic understanding and technical expertise. Only with this kind of contextual consideration can we find meaningful points to innovate and carve out that place in the mind.
The sheer amount of social, cultural, political and economic challenges at play at the moment would, to the alien eye, seem catastrophic to pleasure industries — luxury especially. Yet we’ve already been shown the proof of its resilience, an enduring quality not set to cave in anytime soon.
So the challenge for brands instead becomes: how far can we go? How much of our collective time can we spend at the forefront of our industry, of innovation, of luxurians’ minds? Let’s find out. Get in touch via firstname.lastname@example.org.