Retooling Luxury for the Digital Age

By: Isobar co-CEO, Jeff Maling and Director of Strategy, Tim Dunn


There’s no doubt that digital is forcing some hard questions for every category of product and marketing, but none is perhaps at such an existential pivot as Luxury. Digitization combined with globalization and a radical shift in earning power is forcing us  to reevaluate the very definition of luxury in 2014.


Marketers have long talked about the luxury paradox – the fact that raising prices creating exclusivity for luxury goods actually increases demand. But the rise of digital as our primary way of interacting with brands and services has led to a new luxury paradox, and it’s one that risks disrupting the luxury sector beyond recognition.


Luxury companies have long relied on high human touch experiences with high staff-to-client ratios often complemented by goods of high craftsmanship such as leather, jewelry and the like (consider the Maserati, which has hundreds of leather combinations to choose from). This clubby experience has been the gold standard of luxury service across nearly every industry.


But our consumption of digital has, to my mind, caused many of us to reassess and re-evaluate what “luxury” actually means. Why call your personal shopper at Nordstrom about shoes when you can have 50 pairs shipped from Zappos arriving the next day? Why have a stuffy meeting with your banker when MINT provides you even better information on your iPad? Why call a private car service or even have a driver when Uber presents you a driver in minutes at the push of a button?


Our perception of luxury has shifted away from things that make us feel wealthy, to things that make us feel smart. The paradox we are thus left with is that many previously luxurious brands are luxury no more.


The irony in this is that most of the brands now defining these high-end digital experiences are not in the traditional luxury category at all. So as the democratized, easily accessible and streamlined experience of the mainstream equals or overtakes the luxury experience, it means that luxury has a serious problem to solve with digital.


So how do we voice the new expectations of luxury that digital mandates for us in 2014? Here are some of the key tenets, as I see it:

  • Convenience and intuitiveness have become the new must-haves for a luxury experience. Just as Apple has elevated functionality to an equal level of appreciation as visual design and build quality, so we have come to expect that level of fluid ‘it just works’ experience in any product and service we opt in to.
  • A design target of affluent Millennials is critical for luxury brands wanting to advance. In the West those currently aged 18-35 are set to be the most valuable demographic for luxury within a couple of years, and in the hugely important Asian markets they already are. So building out a brand’s value and interactions around the smart device typical of Millennial media consumption is a sensible step.
  • Luxury brands, particularly in fashion, cosmetics and jewelry, have always been about impactful presentation of their products both in advertising and physical display. However, new consumers, who live online and on mobile, expect to find beauty recreated digitally too. One rare but excellent example is Hermes’ ‘Les Ailes d’Hermes’ – a whimsical and beautiful space to play with Hermes products and get to know its brand.
  • Any brand which includes a digital or service element has additional new expectations. Primarily, a cloud element is critical to ensure a seamless connected experience everywhere. When we designed the first Tesla dashboard, we deliberately leveraged cloud-based solutions. This means that users’ personal data such as music, locations, contacts etc. are always up to date. Again – it should just work.
  • Being customer-centric is an oft-repeated mantra, which many brands espouse but few really practice in real life. We no longer aspire to brands – we want them to aspire to us. So a luxury brand has to demonstrate how it brings its luxury cachet to enhance our lifestyle, and then help us to reflect those luxury values to tell our own unique story.


So luxury is no longer just about price and exclusivity, although those will clearly always have a role to play. Today and in the years to come, luxury will be equally about providing personalized experiences – at scale.


Brands that can deploy granular data-led experiences that are omnipresent, yet feel small and highly personalized to the consumer, are those that are going to truly define the next generation of luxury brands.