There is a belief that the only brands that are doing well in the current crisis are luxury brands that enjoy the extraordinary growth due to the expansion in the emerging markets, the countries that formerly did not consume luxury goods.
Until a decade ago the revenues of the luxury brands from Richemont, LVMH and PPR were typically generated in Europe and the US. But since then, new markets with new money have emerged, looking for a type of luxury that makes a statement of wealth and success. The reaction of the traditional luxury customers has been to retract to a style of consumption that is more discreet and understated, buying into the brands’ craftsmanship and storytelling.
Luxury has always been a dream and big brands managed to keep that dream alive by making aspiration accessible through certain products, by making their brands affordable to many, be it the Chanel lipstick or the Hermès carre.
The classic luxury groups will hone their propositions, and the luxury sector will soon see growth of those brands where craftsmanship plays a much larger role. Some of these brands, which had not been integrated into large luxury groups, yet, are for true connoisseurs, that are rare and less known as they have lacked the financial muscle to advertise and become mainstream.
The interesting thing is that it paints a different picture of luxury; one that is more emotional than commercial, one that is more demanding of true qualities of craft, rarity and meaning. This is a club where you don’t have to be a billionaire to belong: you need a true sense of connoisseurship. It is a difficult challenge for large luxury holding companies and a great opportunity for those brands, traditional or new, that are built on quality, exclusivity and heritage.