Whitespace: The green, micro-niche and inexpensive future of luxury

Issue 80: December 2011

Despite the economic doom and gloom, more than a few luxury gifts will still be found under Australian Christmas trees this weekend… and in coming years we can all expect to see more. But in this near future the word "luxury" may not have the same meaning as it does today.

Trendspotters have identified the emergence of a new kind of luxury, one that doesn't involve ostentatious displays of wealth and instead is more about eco luxuries, niche luxuries and inexpensive luxuries.
This month's Whitespace looks at the impending new era of luxury and examines a series of ideas that consumer-focused brands around the globe are developing to capitalise on the trend.

Goodbye mass-luxury

Futurist Ross Dawson has been one of the first to argue that the concept of luxury is evolving. Taking his cues from Coco Chanel, he claims the idea that "luxury is the opposite of vulgarity" is remerging after several decades in hibernation.

Dawson claims future luxury brands will ultimately be less about high visibility: "The crass buy articles with prominent logos from well-known luxury brands. The discerning buy the highest quality products, preferably with no branding."

One thing that won't change about luxury is its relationship to status. Successful emerging luxury brands will achieve this through peer-to-peer conversations aimed at a few rather – the cognoscenti – rather appealing broadly to mass audiences.

The eco-superiority complex

In this new era, the concepts of sustainability and luxury won't be mutually exclusive. Trendwatching claims genuinely eco-friendly products and services require a degree of excellence in innovation that elevates them to luxury status.

Exemplars of green luxury include the exquisitely designed Aquaovo water purification pod range and super high-end Elvis & Kresse bags, wallets, belts and cases, all of which have been made from decommissioned fire brigade hoses.

But possibly one of the world's most desirable new products is the Fisker Karma. Described by some as a possible savour of the US car industry, this powerful electric sports car is both spectacular to look at and big on eco-credentials.

Luxury is emotional

While many luxury items naturally incur a high price point, many commentators are claiming the new era of luxury will also include inexpensive products that distinguish themselves by being rarities aimed at micro-niche markets.

The key to getting this approach right is to tap into an emotional connection with consumers according to Lucia Van Der Post, a lifestyle commentator who also believes expensive trinkets and toys will take a back seat to more meaningful luxury experiences.

Speaking to the BBC she says: "We believe that the most discerning consumers are now recognising that whatever the cost, financial or from a life-hanging perspective, they are going to put their happiness about everything else."

A focus on rarity

A new breed of clever products that evoke emotion-focused rarity include Maestro Dobel's small batch production of tequila. To connect consumers to the craftsman behind the product, each bottle features a handwritten date, bottle number and the distiller's signature.

Emotion focused micro-niche luxury can also be achieved by rethinking the mundane. Puma has done this with a new "shoebox" that consists of one sheet of origami-like folded cardboard that fits into a super-cool reusable cloth bag.

Retailer Target has tapped into a new sense of rarity by successfully selling affordable high-end designer clothing for very short periods, while fashion house Hermès is now sourcing handcrafted decorative objects from unknown Chinese artisans.

Making new luxury happen

If 90 per cent of Japanese women own a Louis Vuitton bag can this company still call itself a luxury brand? Clearly, the flashy logo driven era of luxury is over. New luxury has arrived and it's within reach of any company willing to offer a rare experience.

As with most aspects of the contemporary business environment, new luxury is driven by fast-paced innovation. The ability to pre-empt a consumer's emotional relationship with a product offering, be it sustainable, micro-niche or both rare and affordable, is the other vital ingredient.

Whitespace is published monthly by the Australian Institute of Management - Qld & NT. Sign up to have a copy sent direct to your mailbox.