The Lux Retail Experience = Experiencing Luxury?
Episode 1- Series - 1
In this webinar Joshua Gan, regional director of Asia Pacific for the EHL Group, is joined by Theodore Gen Knipfling, Managing Partner at Plus Curiosity and Florent Girardin, Assistant Professor of Marketing at EHL Hospitality Business School who teaches hospitality luxury brand management to final year students among other classes. In this video the they discuss the luxury retail landscape.
What is Luxury?
The concept of luxury is constantly evolving because in the end, the definition of luxury is found in consumers minds. Most of the researchers who studied the definition of luxury did it from a consumer perspective. So you need to ask consumers about their own definition of luxury and of course this is influenced by the environment in which we live, by the generations you ask, and the countries also. The definition of luxury is constantly evolving, but there are things that remain true and notions of exclusivity rarity, high quality, I think, will always be present and will always be associated with luxury. But there are some more evolving notions like the notion of status, which is currently being redefined by the new generation. Luxury is a multidimensional concept which is constantly evolving because it's tied to consumers perceptions. In the past it was sheer uselessness of a product which made it luxury, demonstrating you are rich enough to afford some thing beautiful but completely useless, but more recently experience has taken more prominence.
What is the link between luxury and status?
Luxury has always been linked to the mission of status. Consumers use luxury to signal their status to their peers. So luxury consumption is a way to say to other people around you that you belong to a certain social class. However, the very notion of status is changing because in the past, status has always been associated with wealth. So you would show to others that you're a wealthy person, that you're successful in terms of financial performance. But today, with the new generations, this national status is evolving towards more wellbeing - wellness as being the new wealth. So health is the new wealth. Consumers now, millennials, for example, can also use luxury to signal to others that they're happy, that they're well wealthy and also healthy. So the notion of status is changing from a pure financial notion of status, it's evolving towards a more wellbeing and happiness types of status signalling.
Who is the luxury consumer today?
The young generations which now drive a disproportionate percentage of luxury sales, for example, young people in China aren't actually such a large part of the population. In fact, they are a minority as opposed to countries like Vietnam, Cambodia or the Middle East, where the majority of people are young. In China it's much less but the Chinese consumer is responsible for 50% of the world's luxury sales. So there is that sort of disparity where young people these days are buying a lot of luxury and yet it's the same generation which cares more passionately about or at least says they care about things like the environment, equality, for issues such as horse labor, fur. They take a more vocal stand, in part due to peer pressure, but it shows that it's enough of a majority that some youngsters feel they have to join in. Sustainability and these sort of trends are real for luxury, but at the same time, it's very much for instagram and it can often be quite superficial.
