The Beautiful Life: Understanding The Luxury Market

For millennia, people around the globe have satisfied themselves with the possession of luxury goods. From the purple dyed silk of antiquity, to today’s Hermès Birkin bags, luxury has always been associated with wealth, class, and power. History suggests that acquiring luxury seems to be a basic human instinct; even nomad kings who led a Spartan life were likely to be buried with goods of silk and gold.

Brand identity, product quality, exclusivity, culture and history, high price, and aesthetic value are all elements sought after by modern consumers of luxury goods, yet some brands can tick all these boxes and never break into the stratospheric cachet of true luxury. To get there, a brand needs a certain indefinable quality that makes it truly worthy of the ‘luxury’ tag.

Having said that, who is a consumer of luxury goods? Why do office ladies shell out half a year’s salary to buy a clutch from Anya Hindmarch? Why do junior executives obtain Rolex watches on instalment plans? These are neither girlish indulgence nor male vanity; they are part of a new social protocol where your identity and self-worth are determined by the visible brands on your body. With the democratization of work and the rise of the middle class, luxury is no longer the exclusive preserve of royalty and the noble classes.

In that sense, luxury goods are used to designate one’s social standing or status, as opposed to the rigid social class or caste systems of ages past. Owning a Rolex watch, for example, means that you have made it in life. And according to a study done by Bloomberg, 94 per cent of Tokyo women in their twenties own a Louis Vuitton piece, 92 per cent own Gucci, 57 per cent own Prada, 51 per cent own Chanel, and so on.

MARKETING LUXURY

For generations, European luxury brands, especially those based in France and Italy have had a stranglehold on the luxury market. The French strategy is to let their products speak for themselves and cultivate a mystique surrounding the brand, based on the unmistakeably French concept of provenance known as terroir. Italian brands used roughly the same strategy, selling the innate Italian sense of style as tailor-made luxury.