A Hermes Kelly bag, a Bulgari emerald ring, or a Serge Lutens Fragrance? No thank you. Not luxury enough! In deed welcome to the era of the Hyper-Luxury. The luxury industry has changed quite a lot. Consumers looking for premium products and services get more demanding and a real segmentation has happened. Some of them are looking for hyper exclusive products and services. Hyper luxury consumers are no longer happy being targeted as common luxury consumers, they want products expensive enough to match their status. However, conversely, the common luxury consumer is finding it harder to keep up their prestigious lifestyle. Millionaires and billionaires are leading the way.
How do we define this new luxury segment? Hyper luxury represents products that are rare, exclusive, extremely high quality, often handmade and unapologetically expensive. The very (very,very) rich luxury consumer has a deep desire for very expensive goods and destination shopping which only they can afford. One of the side effects of this phenomenon is the fact that designers and retailers are obliged to increase their prices in order to meet the needs of this new market.
Recently we could see brands like Louis Vuitton who would bring a strong difference between a $1’000 bag in good quality leather from an Aligator skin handbag at $40’000.
French luxury shoes brand JM Weston have a service in their manufacture called “Commandes Spéciales”, basically there is no limit to the choice of your shoes. Exotic leathers and precious metal treatments are possible, adding a “zero” to the bill of your mocassins.
What we can say is that people got tired of buying mass-produced, unoriginal designs. Luxury goods consumers tend to look for special, unique and excellent quality pieces that will last for years. For this, they will be willing to pay more. Social trends show that people are moving away from consumerism, from buying things that don’t last. There will always be people who seek out exceptional luxury products. Maybe the next stage will be an even greater demand for artisanal craftsmanship, to balance our increasingly digital daily life.
In this new economy, ‘normal luxury consumers’, are finding it hard to stay up to speed with the increasingly inflated prices of luxury goods. Professional and successful women have been declared to be bankrupt in record numbers, spending all their money on designer clothes and extravagant social lives, reaching debts up to £100,000. Analyst, have commented that personal bankruptcies, especially for women, has been growing 25% per year, mainly because they have higher expectations of their standards of living, not realizing that they are spending beyond their means.
Today’s lesson is simple: if you are a luxury brand, who are you aiming at? Are you aiming to attract a new luxury elite, pricing everyone else out? Or are you aiming to fulfil the new demand for attainable luxury? Be careful to avoid falling in-between, because you might end up losing both hyper and normal luxury consumers.
Info sourced at Mindshare luxury newsletter. All content is copyrighted with no reproduction rights available.