Luxury. Just what has it become?
Last week I had the extreme pleasure of tuning into Financial Times’ Luxury conference in Marrakesh. Being that interior design fits quite nicely into the square box that we call Luxury Services (since we are most nearly the first thing cut from a budget when times and Dollars/Pounds/Euros get tough) I couldn’t resist the call of listening to Francois-Henri Pinault (Gucci/YSL), Luco de Montezemolo (Ferrari), and Helen Dubrule (Hermes Maison) chat candidly about the state of the Luxury Industry.
Needless to say, although it was an immense amount of information to process all at once, it was striking to hear these world leaders (let’s face it…. they are) reflect on just how the retail market has shaped their respective brands and just where they see their brands going in the very near future. Additionally, their commentary only reinforced what I believe interior designers everywhere are feeling – the continual promotion of their brands through various channels (including a resounding push for interaction through social media), the insane emphasis on service and engagement with and for a brand’s clientele, and the requisite need that brands everywhere must embrace change in order to survive in an ever changing, quick moving market.
The biggest emphasis through the conference, I felt, was the embrace of changing markets. Molding brands seasonally to conform to the public’s changing definition of luxury. Remaining on top by forecasting and adapting to modifications in the marketplace. Of course, as a result, many of these brand mastheads spent a significant portion of their commentary time debating the meaning of luxury. Let us be honest here – defining luxury is no different than trying to explain the secrets of success or the meaning of life. Luxury truly is art – subjective in every way to the ways and means of the beholder. My idea of luxury is going to be entirely different from someone else simply because I may have experienced it in a completely different manner.
The FT Luxury Conference simply reinforced this menial fact. So much so that there was disagreement between the current chairman of Versace and the CEO of PRR, a Monsieur Pinault, with regards to exclusivity and rarity. The majority emphasized that luxury would always need to entail a sense of exclusivity, a notion that one was entering a “not-so-secret” club of riches by purchasing a Louis Vuitton bag or a BMW. Pinault dissented, opining that rarity has become the new exclusive, allowing for a brand with stores in the triple digits to remain in the business of luxury by stocking their shelves with an item or two that might only be available in small numbers. Though I understand his notion, I can’t help but believe that he dissuaded himself into believing that rarity and exclusivity are not exactly on the same level.
Think about it this way. The Birkin bag, available in such small numbers that women would kill for them, will wait a decade for one, will take a chainsaw to one in the name of art (whoops… that was Clint Eastwood’s daughter) is probably considered the epitome of luxury goods, of exclusivity, and naturally, a rarity quite simply because of the unpredictable production schedule, the differences in materials, and of course the price tag ($9,000 on up to $150,000 or more – one by Japanese designer Ginza Tanaka sold for $1.9 million in 2008). Can I go into an Hermes boutique and purchase one? Sure but I’ll have to wait for it. The Birkin has bred a class of women (and men if I could get my hands on one), a ladies club of sort. An exclusive denizen of the female population accessible only by gobs of money, social connections or both. Even more so, the demand for the Birkin continues and won’t exactly see a downward turn anytime soon. (Side note: Hermes continues to claim that a wait list does not and never has existed but that the bags are sold on a first come first order basis)
With all that being said, is exclusivity and rarity just a bad case of semantics meant to become the new fad of the decade? Is the goal to push out of the proverbial luxury box and try a new approach? Only time will tell but the truth is that rarity will always lead to exclusivity and not necessarily the other way round. Rarity creates circles of individuals, owners, simply because there may be so few of the product that they’ve procured. BUT, exclusivity, even though the goods may actually be rare (think beach front property or vintage Ferraris) may apply to those goods that continue to be produced (in which the circle of influence continues to expand based on the presence of able-bodied purchasers, ie: customers) even without the presence of a limited existence. Even more so, many brands continue to push exclusivity within their own lines (while expanding customer base) by offering entry level editions in parallel with their top of the line models. Does the existence of a stripped down 3 Series BMW make the 7 Series (their flagship model) any less luxurious? Not at all. Neither are rare but one is substantially more exclusive as a direct result of its price tag. Yes, the brand as a whole is more accessible to the general public BUT the lines within create specific class levels.
Louis Vuitton did the same thing simply by offering lesser expensive small leather goods in conjunction with their more expensive handbags and bespoke trunks/luggage. And yet, you can ask any person just what kind of product they consider “luxury” and more often than not, the LV Monogram is a conjured image.
Certainly one could argue that the mere existence of various “levels” of goods within a brand could further support the idea that Luxury is more rarity than exclusivity but, remember, the product isn’t rare because the manufacturer could not support the production of additional units, but because the demand for them was not there (typically a result of heightened initial price tags). BMW, for example, sold 6,648 7ers in the month of March compared to 29,004 3ers the same month. This giant discrepancy was not a result of increased rarity but rather increased accessibility for the smaller model. The 3er is nearly half the price of its bigger brother. Wait, did I just argue that exclusivity breeds rarity?
See where I’m going with this?
I must be babbling.
The whole point is that luxury can not remain luxury without an air of exclusivity. People inherently want something they can’t have. All it takes is one look at the current national average for credit card debt (currently $15,956 based on Federal Reserve’s 2012 report on consumer credit) to make a pretty sound assumption. Let me preface by saying that I understand a big component of the current debt level is the increase joblessness in the current economy but according to a survey by Bankrate, nearly 60% of persons surveyed said that their current level of credit card debt was a result of bad decisions not unfortunately circumstances.
Anyway, wanting what they can’t have is the entire reason that knock-offs and counterfeits exist. Remove the exclusivity and you remove the guy on Canal Street trying to pawn off a fake Goyard tote at a tenth of the price. It’s the reason the Japanese look to BMW, Audi, and Mercedes when designing their quick-to-market “luxury” vehicles. Fortunately for the luxury industry, rarity has almost nothing to do with any of it. Hermes and LV and Gucci and *fill in moniker here* … may continue to produce high end goods available only to those with the means to procure them AND continue to consider themselves a luxury brand.
But who am I to counter the argument of the head of Gucci and Yves St. Laurent?
Just a loyal consumer of luxury products.