With the goal of redefining and rethinking the world of luxury, McCann Worldgroup’s Luxury Practice brought together a 2023 Tastemakers Council to discuss the ongoing mission to “lead a rich and insightful cultural conversation about the future of affluence.” Still, the question on everyone’s mind was, with the world on fire, why are we talking about luxury?
According to McCann Worldgroup’s Luxury Practice, the answer, despite predictions of a recession continuing to loom, is that the outlook for luxury brands remains overwhelmingly positive. Authors of the report point to learnings from previous recessions, showing the category to be in a favorable position. While aspirational luxury buyers are cutting back, 40 percent of luxury spending worldwide comes from the wealthiest 2 percent of global consumers who are not showing signs of spending cutbacks.
During the conversation with the tastemakers council, five unique perspectives emerged. The first is that “money is not a monolith,” where the council recognized the need to deconstruct a way of thinking people can be put into broad groups to be understood. Instead, the authors of the report suggest that marketers uncover the nuances that more accurately define the human experience.
“There is a deeply nuanced story of wealth within every market with both regional and cultural factors influencing how consumers make and choose to spend their money,” the authors said of the report. “Understating these nuances is key for brands.”
The second perspective was named “elevated exclusivity,” a mindset that addresses marketers’ ongoing conversation around the democratization of luxury with goods and services that were once exclusive to the ultra-wealthy becoming accessible to mass audiences. There is a difference between feeling rich and being rich, the council advised. Brands can benefit from this insight by upping the ante when it comes to the experience they offer important clients, such as private shopping, away from the masses that also provide bragging rights.
Similarly, perspectives that followed included “transformative travel,” understanding new behaviors born out of pent-up demand for travel and offering ever-more rare and interesting experiences for the privileged few.
The “new digital divide,” examines increasingly blurred lines between the real world and the digital one, where real-life experiences and human interactions are being viewed as a luxury. With this in mind, the council predicts a shift in social media, where people recognize the difference between telling the story and living the story.
“There’s this new power in quietness,” said one tastemaker council member. “Although ironically it tends to be the most interesting people who you’d actually want to follow who are moving off it. But you also know if you ever need a recommendation, you can phone them or WhatsApp them.”
The final perspective shared by the council was “Superhumans,” which understands that when a consumer can afford anything, there is more appeal in the things they cannot. This might mean extending time and legacy or biohacking health. The authors of the report advised brands to offer these consumers the ability to focus on things that enable the best performance and energy protection. One example is Chanel’s announcement of its private boutiques exclusively for top-level clients, while Gucci announced a collaboration with Oura Ring.
Successful brands, said the authors of the report, will continue to innovate and inspire, and perhaps more importantly, build a deeper connection with their customers by understanding them. To win, brands must up the ante for crown jewel customers.