A growing class of wealthy global citizens is redefining luxury aesthetics
(Singapore, October 18, 2023) Global behavioural insights practice Canvas8 has unveiled its ‘2024 Expert Outlook on Luxury’, an annual expert-based report that equips Canvas8 members with the information they need to nail the year ahead in their forward marketing strategies.
For the 2024 Expert Outlook on Luxury, three prominent industry commentators analysed the luxury industry’s key inflexion points in the year ahead. Diana Verde Nieto, co-founder and non-executive director of Positive Luxury, explained how the climate emergency threatens luxury’s licence to operate; Alex Cheatle, CEO and founder of Ten Lifestyle Group, unpacked the values and desires of younger, more nomadic, affluent consumers; whilst Nonita Kalra, editor-in-chief at Tata CliQ Luxury, chronicled how an increasingly insatiable digital appetite expands luxury’s geographic reach.
According to Diana Verde Nieto of Positive Luxury, one of the biggest threats for all sectors, including the luxury industry, is climate change, which brings unprecedented global disruptions from a socioeconomic perspective. Luxury brands will need to reimagine culture, strategy, products, supply chains, and business models while positively impacting people and nature.
Another thing that will impact the luxury sector is the decision of LVMH to sponsor the 2024 Paris Olympics. Said Verde Nieto, “It’s the first time a luxury brand conglomerate is interacting with virtually every global market through a single event. From a branding perspective, it’s fantastic. But what does it mean for luxury?”
2024 will also be the year in which luxury will be fully reimagined. This is starting already and has been happening quietly for many years. Luxury has diversified its portfolio, integrating hotels, beauty, hotel management, cruises, and more. Also, the rise of the ‘pre-loved’ second-hand market for luxury goods will bring easier and quicker accessibility to luxury items for everyone. Luxury is no longer bought by the 1% only; as a status symbol it is sought after by those who can’t afford it
Co-creation with luxury buyers can provide more personalised and meaningful products
because it gives them a sense of belonging.
‘Dematerialisation’ is also here to stay. The shift toward experiences over material goods is now ubiquitous in consumer culture. While the business model of many conglomerates will still focus on high-end goods at a luxury price point, the experience of luxury will be further democratised by this. Take Prada, for example, where you can buy a bag or shoes, or simply enjoy a coffee at the Prada café.
Taking a more political perspective, Alex Cheatle of Ten Lifestyle Group perceives that growing international conflict between the great powers will limit travel and brand affiliations and who can operate where, effectively acting as a counterpoint to globalisation. We’ve seen with the war in Ukraine that Russian wealth now limits itself to being spent in markets like Russia, Turkey, and the Middle East. Whilst the effect of redirecting Russian consumer spending on the Western economies is negligible, if China had a major falling out with the West it could massively reduce spend and travel as they spend ten times more.
Cheatle also sees a growing threat from ‘data nationalism’ that will restrict what companies can do in certain overseas markets. The concept of data sovereignty means it’s more difficult for international companies to use and develop data on a global scale. It needs to be broken down a lot more, which creates complexity that not everybody can manage.
There’s a gradual shift going on as well, which is seeing a huge amount of money circulating among people between 15 and 30 years old. The vast majority of it is inherited or given to them as a flush fund while their parents and grandparents are still alive. This demographic, which has been raised as citizens of the world from family money made through globalisation, is highly nomadic and migrates around the world, from Mayfair to New York, Ibiza, Saint Tropez and Dubai.
Said Cheatle, “This demographic is diverse in terms of nationality, education and peer groups but very homogenous in terms of wealth. That’s something I think is very interesting because it feels like there’s almost a new economic class. You’ve got the working class, middle class, national upper class, and then you’ve got this wealthy citizen of the world. It’s a bigger demographic than it used to be ten or 20 years ago; it’s five times as big now. Businesses need to get their head around this new consumer class because these people are more digital and global, so they’re difficult to track.”
Nonita Kalra, editor-in-chief at Tata CliQ Luxury, observes that the age of passive consumption is effectively over. Brands can no longer afford to be monolithic entities that dictate terms to consumers. The luxury consumer is no longer just a buyer but a collaborator and businesses looking to gain a competitive edge should refocus on co-creation with their customers.
In practice this entails constructing an ecosystem where the consumer is not just a final recipient of a product or service but an integral part of its conceptualization, evolution, and even its marketing. Comments Kalra, “If your customer is invested in what you’re doing at a foundational level, they’re not just loyal; they’re your advocates. Their word-of-mouth holds immense value.”
“Take, for example, a luxury fashion brand – it can create limited-edition pieces co-designed by its most engaged customers. Or consider a high-end travel experience company that allows customers to tailor-make their trips down to the smallest details, perhaps even suggesting new destinations. These experiences make consumers feel empowered, giving them a sense of ownership, which in turn engenders a brand loyalty that’s nearly impossible to break.”
The tricky part here is striking the right balance. You want to open up the brand for consumer collaboration but without diluting the brand’s inherent values and aesthetics. “It’s not just about being agile; it’s about being agile while still maintaining your core integrity. You open up your brand to consumers not as a sign of desperation but as a mark of confidence. You’re telling them, ‘We value you enough to bring you into our sacred design studios, our strategy meetings’. That’s empowerment at both ends,” said Kalra.
Comprising 18 different industry reports and 45 case studies across all sectors, the Canvas8 2024 Expert Outlook helps businesses to anticipate and analyse challenges in the year ahead within each sector and understand changes in consumer behaviour and culture so they can adapt and plan winning strategies. For each individual sector, Canvas8 explores the biggest threats to the status quo in 2024, how consumer behaviour will change in response to these challenges, and how businesses can be competitive in 2024.
Said Canvas8’s Editorial Director India Doyle, “Over the last decade we have had to normalise extreme scenarios with increasing frequency. From extreme weather events caused by the climate crisis to surging inflation; from the pandemic to the War in Ukraine, disinformation threats, the mainstreaming of AI and cyber-attacks – feelings of unsettledness are making for a stranger and less comfortable status quo. So, as we look ahead at another year of uncertainty and unease, what do we hold onto? How do we build resilience and surface joy against the odds? Our 2024 theme ‘Anchor Us’ focuses on the need to give people something tangible in times of seismic change.”
Canvas8 is a global behavioural insights practice operating out of London, Los Angeles, New York, and APAC. Since 2008, the company has helped organisations grow through a better understanding of people. Primarily focused on media, communications, and product development, their award-winning insights inspire clients including Google, Mindshare, Target, Molson Coors, Nike and Edelman. Supported by their network of over 5,500 experts, from TED speakers to MIT fellows, and underpinned by innovative research methods, Canvas8 work at the intersection of behavioural science, culture, business, and creativity to understand human behaviour. Its flagship product is the Canvas8 Library platform, an online database of over 35,000-plus trend reports and case studies spanning 15 industries, nine markets, and five generational audiences.
For more information visit: www.canvas8.com