The luxury industry has gone through some challenging times these last few years, but remains resilient. How do you explain this ability to continually bounce back?
Eric Briones: Going back a few years, there’ve been a few things that have proven hugely beneficial to the luxury industry. Firstly, luxury brands did a great job of targeting young people. It started with the Millennials.
In 2014, marketing campaigns started to focus largely on this new-spending generation. Then strategies were put into place on the realisation that they’d gradually be replaced by Gen Z and later by the Alpha generation. This strategy clearly turned out to be beneficial: a study by Bain & Company in 2020 reaffirmed that under 25s would account for 65 to 70% of luxury spending by 2025. The robustness of the luxury industry worked wonders to battle against the Covid crisis.
Luxury has shown incredible resilience and continues to flourish in a challenging environment. This is partly down to sound management practices and family structures that often bring luxury businesses their vision. Jean-Louis Dumas, the former CEO and artistic director at Hermès, argued that luxury is something that can always be repaired. So, in times of crises, it’s something intrinsically valuable – like gold, that you can always fall back on in hard times.
Would you say luxury’s a trend-setter always exploring new avenues?
E.B. : Many would argue that luxury is a bit obsessed with marketing and constantly trying to seduce first-time buyers and appeal to the young, influential and fashionable. And much like some of the gains seen in technology following the Covid pandemic, luxury has, in many ways, come out stronger: with some brands seeing double-digit growth of around 15%. But the financial markets are always hungry and constantly looking for more growth. This requires looking for opportunities further afield and will see the move towards luxury 3.0.
For instance, some Kering brands are already experimenting with cryptocurrency payments in stores. Luxury and tech go hand in hand. Other examples include the digitally connected ring, Gucci X Ōura, which combines fashion and technology, tracking our activities to get to know us better; or ‘The Speaker Bag’ by Balenciaga and Bang & Olufsen.
We should also mention the fusion between luxury and culture and how luxury thrives on it. Take, for example, Dior’s monumental flagship store at 30 avenue Montaigne in Paris, which boasts a museum where everything resonates with the cultural aspirations of the fashion house.
The Covid crisis saw some luxury brands grow even stronger as people moved away from contemporary art to the allure and power of luxury.
Luxury loves this instability and never rests on its laurels. Taking on Web 3.0 will be a huge challenge requiring luxury brands to know how to communicate creatively with communities expecting incentives.
Co-founder of the Paris School of Luxury and Managing Director of the ‘Journal du Luxe’
While some brands were a little cautious at the advent of Web 1.0, luxury is now diving into Web 3.0. How do you explain this renewed appetite?
E.B. : Luxury shares some of the same values as those behind Web 3.0, like scarcity, expressions of social status and the promise of sharing a more luxurious, immersive digital experience. These values were not previously provided in Web 2.0: you owned nothing. Web 3.0 brings the added advantages of traceability by using blockchain technology to prove authenticity and chart the trajectory of owning a luxury product.
Do you think that luxury is getting more accessible, despite the paradox of retaining its rarity?
E.B. : While luxury might aspire to be at the forefront of Web 3.0 and the Metaverse, it also needs to be more accessible by advocating values of inclusivity: welcoming to outsiders without shutting anyone out. You might wear Prada as an expression of culture and being a bit of a fashion nerd. But, for others, it might have other more elusive meanings – which is all part of the openness and mystique of a luxury brand’s appeal.
What do you expect to see next playing out in luxury?
E.B. : Investments in luxury hotels is nothing new, but I see more experimentation in the field of hospitality and more collaborations aimed at Generation Z.
Luxury is constantly reinventing itself and moving with the times. For a while there was a lot of focus on China, then the United States, and Korea. Luxury loves this instability and never rests on its laurels. Taking on Web 3.0 will be a huge challenge requiring luxury brands to know how to communicate creatively with communities expecting incentives. This is even more the case for the Alpha generation who’ll want to make money in the Metaverse.
It’s a new world where there’ll be plenty of great opportunities for those retailers and in-store staff able to satisfy the consumer’s desire for a better digital shopping experience. We saw how stores shuttered during Covid lockdowns, which forced retailers to move more online and onto social networks. So, next, I expect to see the emergence of the retail salesperson 3.0: someone capable of mastering and utilising data without necessarily having to be a ‘data scientist’. This will make having allies like Cegid all the more important, because you can’t succeed alone.