Luxury has long ceased to mean wasteful consumption. The new definition of luxury revolves around values and responsibility
“Luxury - costly, wasteful, the normal framework (the standard of living or the like.), Unnecessary, expenditure carried out only for pleasure; Splendor, lavish abundance. ”This is the definition of the word luxury in Duden. But is this luxury Definition especially for the younger generations like that Millennials and the Gen Z, still current?
A look at the new generations' understanding of luxury shows that the values mentioned in the Duden have changed. Even though consumption continues to take place, it becomes more conscious and involves more profound reflections. The behavior of previous generations comes into focus:
Ill-considered consumption has its contribution to environmental damage, CO2 emissions and climate policy done. For example, the baby boomer generation (around 1945 - 1964) experienced the economic upswing and optimism. The result: luxury was understood as a material good - as House, Cars or clock.
Today, luxury is about values instead of property
Millennials and Gen Z pay more attention to socially relevant issues such as sustainability and health which has led to a new sense of responsibility. Responsibility in terms of action and consumption which does in return affect the topic of luxury. As a result, the needs of luxury consumers and - in response - business models on the supply side have also adapted.
The fairly stable economic situation of the past few years increasingly prompted consumers to attach importance to sustainable and philanthropic corporate philosophies. At a time when luxury is taken for granted and is democratized - that is, contrary to the traditional as it is becoming accessible to more and more people - values and mindfulness are gaining in importance.
The new definition of luxury persists even in times of crisis
The disruption of existing luxury business models is proving to be productive - even in the current times of the corona crisis and the associated financial uncertainties. Investments are made more sustainably in terms of their longevity and their impact on people and the environment.
Quality not quantity, timeless instead of short-lived trends and accessibility instead of closeness. These are all values that have not only developed in response to economic freedoms, but also gained relevance in times of crisis.
These are the concepts of New Luxury
- Sharing instead of owning
- Membership / Experience
- Knowledge & transparency
- Democratization of luxury
- Wellbeing / work-life balance
Millennials and Gen Z embody the new luxury
For millennials and Gen Z, the luxury term no longer has the pure meaning of a status symbol. It refers to a lifestyle and the desire to own high quality that does not conflict with nature or human dignity.
It's about a holistic approach, where luxury also means driving positive change. This shift in the definition of luxury is increasingly oriented towards norms and values. In this way, the consumption of luxury means not only personal added value, but also benefits for the planet and people.
The concepts of the new definition of luxury
1. Sharing instead of owning
Sharing and 2nd-life business models prove that the temporary possession of an object does not immediately mean that it has to be thrown away. High quality products have a long life cycle that can be extended by conscious consumers opting for loan, resale or thrift platforms on which pre-owned / loved pieces are passed. Also, concepts like car sharing are part of this movement.
2. Memberships & Experience
The concept of the community is closely related to sharing ideas. Nowadays, luxury means connecting with inspiring personalities and expanding social capital through an exclusive network. This means that luxury cannot be consumed, but also experienced. In short: luxury as access to exclusive clubs and special experiences.
Image source & copyright by Soho House
3. Knowledge & transparency
A sustainable mindset demands radical transparency from brands. Since the desire for social and sustainable awareness contributes luxury brands increases, consumers want to know exactly which commitments are made. Transparency and the knowledge made possible by this help to make conscious purchase decisions. This means that aspects of the environment, health and personal product preferences can be covered.
4. Democratization of luxury
The Luxury Business Report by INLUX describes the democratization of luxury as "luxury casualization" or "public luxury". This means that people are increasingly integrating luxury into their everyday lives, it is more accessible to other sections of the population and is treated as less elitist. One of the most obvious counter-movements to the traditional understanding of luxury: Cooperations. Cooperations in which established brands team up with younger, rather niche brands like the traditional high-end fashion house Louis Vuitton did with Streetwear brand Supreme.
5. Wellbeing / work-life balance
In addition to physical health, the modern understanding of luxury includes holistic wellbeing. Body, soul and spirit should be in harmony with one another. The increasingly sustainable definition of luxury is rounded off by people taking time for themselves, practicing mindfulness and prioritizing their well-being in our fast-paced society. A popular example of this is the work-life balance, i.e. the healthy relationship between professional obligations and personal needs.
Digitization is an important driver of the new definition of luxury and the Next normal. It changes distribution and production processes, modifies products and communication and promotes the provision of new service options. Luxury is individualized through exclusive, personalized marketing experiences and e-commerce functions, while the digitization of value chains, for example, can minimize environmentally harmful practices.
Louis Vuitton embodies the spirit of New Luxury
The highest standard of the high-fashion house is to respect the origin of its outstanding quality: our resources. "Great design, sustainability and economic success" go hand in hand at Louis Vuitton, according to Michael Burke, board member and general manager.
Since 2004 the fashion giant has been pursuing an efficient strategy to reduce its CO2 footprint, optimizing all production and distribution channels and assuming social and economic responsibility. In this way, the traditional company can also answer ideal needs of the "modern mindset".
This can also be observed in current collections: Streetwear pieces, which were launched in collaboration with the trend-setting visionary Virgil Abloh - meanwhile the brand's creative director - reflect the new luxury as well as the willingness to further develop the established luxury brand.