Technology is the new luxury

“Recently, with an offensive retail strategy and in some cases comparable price points, Apple has competed with the likes of Louis Vuitton, Cartier or Prada which made us raise the question: is Apple actually a luxury stock? Yes.”

One of the surprising (but not unexpected) findings of the 2018 Hurun Report (which surveys HNWIs in China) is Apple topping the ranks of brands given as gifts by HNWIs). Who did it beat to get up there? The likes of Louis Vuitton, Bvlgari and Chanel.

I am sure, although qualitatively, that Starbucks either hasn’t opened in any new stores in London lately, and even if they have, their stores are getting smaller and dirtier. The fact is simple — Londoners do not equate Starbucks with luxury. Will Starbucks ever open a takeaway store in Shanghai? Probably not.

These winds of change are not unbeknownst to the traditional luxury manufacturer. Many of them are willing to risk their equity and hundreds of years of legacy to launch technology products. The Apple Watch didn’t take off but it did rattle cages. In Q1' 2017, the veritable Montblanc entered the smartwatch segment with the launch of the Montblanc Summit. The summary of the reactions and analysis were “nothing in the product to justify the Montblanc name and price tag”.

  • A new category of materials that combine copper and glass or gold and glass into a single material
  • A solution that combines fashion and technology by designing accessories and clothing that can be customised immediately
  • Lack of money does not inhibit us from experiencing the luxurious and the expensive — the availability of cheap credit (aka debt) has made access to luxury much easier
  • Exclusivity is a very poor differentiator of luxury now — in the true sense of the word, exclusivity does not matter anymore. Yes we do still queue up overnight to buy the next generation iPhone and add our names to the never moving Birkin bag waitlist, but it is not the end of the world
  • Luxury now comes in smaller, ‘mini’ versions for us — In Shanghai, an overpriced Starbucks coffee is a mini luxury, in London it would ordering an Uber Exec to arrive in style at a luxury club or house party, in Delhi it would be hanging out in the latest Mexican restaurant that has opened in the luxury mall next door
  • Luxury is increasingly not seen only as a gift anymore. It is for our self consumption. Luxury is increasingly not for collectors or connoisseurs. It can be for anyone who has the money, interest or curiosity (or has the connections to break into super exclusive clubs)
  • Luxury is not about owning inanimate objects anymore. It is about buying something that you can continuously use, which in turn enhances the quality of one dimension of your life (for example the iPhone, the AirPods, underfloor heating in your bathrooms, Bose or Blaupunkt speaker systems, an annual multi-brand airline lounge pass etc.)

It has made luxury ubiquitous, shareable, able to be experienced without ownership, bite-sized, flexible, customised, convenient and more accessible.

All of this traditional luxury was not, but new luxury is.

Strategy Consultant

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