What Is Luxury? - A Guide to the Ever-Changing Market (2024)

The question, “what is luxury?” has a much different answer than it did decades ago.

While you could answer the question “what is luxury” with elements like exemplary experience, high status, and product exclusivity, the consumer market is in a state of change, taking the definition of luxury with it. There are now many values under the umbrella term “luxury” that consumers, especially younger ones, don’t fit with the word’s traditional definition.

In this article, we are going to explore the ins and outs of the word “luxury” and what it means in modern society.

What Does Luxury Mean?

The actual definition of the word “luxury” is lust. The word originates from the Latin word luxus, which means extravagance, and luxuria, which means excess.

If we take a stroll back in time to the Elizabethan era, the overarching idea of luxury was deeply associated with adultery. However, it eventually became a term for splendor or opulence. For a long time, luxury was used to reference wealth and money.

However, in modern times, luxury focuses more on things that money cannot buy, such as the notion of freedom.

What Is Luxury Today?

Luxury is ever-changing.

Words typically unassociated with luxury are now prominent parts of the industry’s vocabulary, such as accessibility, approachability, and democratization.

In today’s world, a high-end product must retain a semblance of desirability while being accessible.

David Abraham, one part of the textile Design House Abraham and Thakore, says that we perceive luxury now extend far beyond the physical elements of a product. In many ways, it is a state of mind or an experience. It is more ephemeral than it has ever been.

Luxury today is about value, not property.

Though consumption is a factor that still continues to take place, it is a more conscious consumer behavior than it was with the previous generation. This is likely because a lack of consideration for consumption has significantly contributed to environmental damage.

Gen Z and millennials paid far more attention to social issues, such as health and sustainability.

Successful producers and manufacturers of luxury goods note this new attention and the sense of responsibility it has led to. More than ever, consumers are purchasing products based on values. It is important to many consumers that corporate philosophies are philanthropic and
sustainable.

Some of the new concepts acting as building blocks for “new luxury” include:

• Well-being
• Democratization
• Transparency and Knowledge
• Membership/Experience
• Sharing, not owning

Beyond these philosophies, there are certain trends coming into play that high-end market brands must use to differentiate themselves.

The Last Trends

Let’s take a look at a few new luxury trends that build on the philosophies above.

Social Consciousness

One of the most important luxury trends is social consciousness. In its most basic form, social-conscious luxury is when a luxurious brand acts on or takes a stance on social issues, such as climate change.

By backing an important social cause, a high-end brand can positively influence consumer spending habits.

More than 70% of consumers prefer to purchase products from purpose-driven companies, as long as there is an equal quality and cost. The important thing here is to choose a social issue that aligns with the initiatives of your luxury branding. Connecting with the right social issue can highlight your brand’s values and story.

Remember, you can’t simply say that you support social issues to display a sense of social consciousness. You must also be able to show how you support an issue.

Authenticity is an important characteristic of any brand, and consumers are quick to see through brands that are talking without walking the walk.

One great example of social consciousness is eco-consciousness and sustainability in the hospitality industry. Successful high-end hospitality brands have many ways that they actively promote sustainable practices, such as reducing their plastic use, reducing carbon emissions, using upcycled or recycled furnishings, or purchasing ethically-sourced products for their
guests.

Emphasis on Experience

Emphasizing experience is very important for any luxury brand, though it is especially important in the hospitality market. While most people believe luxury should capitalize on an exclusivity factor, it is equally important that it focuses on the experience within the umbrella of exclusivity.

Someone who is paying a lot of money to stay at a high-end resort, for example, is going to expect that their money is giving them an unmatched, personal experience.

Experience is an extremely valuable marketing tool as well.

When you’re creating a value proposition for your brand, you can emphasize the experience that many get from being your clients or customers.

Localization

International tourism is still in recovery and is expected to be so for at least another year or so.

As a result, we are seeing a growing interest in local shopping destinations and locally made products from affluent customers. The shoppers love the idea of supporting a local economy and focusing on proximity luxury e-commerce channels.

In many ways, the focus on localization comes paired with the increased awareness of the negative environmental impacts of global manufacturing and shipping.

Smart luxury brands are capitalizing on the sense of localization, engaging more thoroughly with domestic consumers. As we move into 2023, we can expect many high-end brands to adapt to local cultures and tastes to enhance their relevance.

What are the Three Levels of Luxury?

Though it might not be tangible, there is a concept that has been floating around in the luxury world for quite some time, stating that there are three distinct levels of luxury. Whether or not these levels are significant to consumers is up for debate.

These three levels of luxury include:

• accessible luxury
• intermediate luxury
• inaccessible luxury.

Accessible luxury brands are those that regular consumers can afford, though they still provide a sense of distinction.

Intermediate luxury brands are those that are more out of reach for the average consumer, providing a barrier to entry in terms of status.

Inaccessible luxury is the highest form of luxury that utilizes total exclusivity, making it far out of reach for the average consumer.

Pierre Valette Florence did an excellent study on the three levels of luxury to determine whether or not they exist in the minds of most consumers.

What Makes a High-End Brand?

While it can be difficult to define what makes a luxury brand, it is something much more than a brand that makes overpriced products.

Here are the key characteristics that we at Mediaboom believe a great luxury brand relies upon.

Price

As we said a few times already, the cost of a product alone does not give it a luxury brand identity.

Most consumers are ready to purchase another version of an overpriced product if they can. While high-end products and services certainly cost more than non-luxury products and services, a luxury brand has to be able to offer more.

Quality

High-end products should be made with higher-quality materials that last longer than competing products. Luxury brands must exude authentic craftsmanship. Consumers who are purchasing these products want to know that they’ve been made by professionals who are experts in their craft.

Aesthetic

Identity is a statement for any luxury brand.

A high-end product is a rare product, and anyone with a luxurious product wants it to be easily distinguishable from a common product. Uniqueness and stature are two characteristics that a valuable product should communicate.

Carefully curated aesthetics and design provide a sense of sophistication that customers can identify with. The aesthetics of any high-end brand should showcase the underlying quality.

Belief

Without reality, there is no luxury. Durability, higher quality materials, and better ability are all very real factors that go into crafting high-end products. With the increased incorporation of these elements into a luxurious product comes an increased price.

The idea with these real characteristics is to set the physical qualities apart in a unique way.

However, luxury is just as much a belief or set of ideas.

There are many high-end brands that don’t find success, as they continuously struggle with trying to get their target audience to align with the brand’s meaning.

• What does your brand stand for?
• What is the story behind your high-end brand?
• Can consumers find the same meeting elsewhere?

Rarity

There are many capable, beautiful, and well-made products that consumers view as “common”, mainly because they are easily accessible. A luxury item should not be so comment and easy to own.

One of the final elements of a luxury brand is rarity. Something that is luxurious should be a challenge to own or excess. Diamonds have no more capability than many other stones other than the fact that they are rare.

Final Thoughts

When trying to understand luxury, it’s hard to boil it down to a single definition.

Luxury is a lifestyle, a mindset, a belief, and a fundamental feeling. Any luxury brand that wants to rise above the rest must learn to balance the many assets and characteristics of quality products and services while creating identities that consumers can align with.

If you’re looking to clarify your positioning as a luxury brand, get in touch with our team here at Mediaboom today.