style="font-size:15px;"> Chapter 2
Evolution of the Global Luxury Market
Luxury is the opposite of vulgarity. Luxury is the opposite of status. It is the ability to make a living by being oneself. It is the freedom to refuse to live by habit. Luxury is liberty. Luxury is elegance. True elegance is refusal.
The term luxury goods was popularized by Wall Street analysts who needed a term to describe companies such as LVMH, Richemont, and Gucci, which had become public companies. Prior to the popularizing of the term luxury goods, these companies were not really known as luxury goods companies but instead were known for their specific areas of expertise and the global reputation they had garnered.
Luxury is about exception and exclusivity, whether it comes to products, or services. A luxury product/service is unique, and not only because of its outstanding quality. It tells more than what it is. Beyond the usefulness or the wellness it brings, it tells a story, it reflects a style and a spirit that contribute to the dream. Luxury is about a product but also a brand, a universe.
It is an association with a compelling and binding meaning in terms of emotional connectivity, personal harmony, spiritual connection or a connection to the world of the inherently beautiful, the greater the marginal value of the object to the seller.
Luxury used to be “ordinary goods for exceptional people” but now can be defined as “exceptional goods for ordinary people.” It had to do with an object, its use, five senses, it was an offering, attraction, a product, a niche and serendipity. Today it is about marketing push, process, synergy, volume and efficiency.
Luxury is a state-of-mind. It is about a bridge between dream and daily routine, a way of appreciating one's time and life, a statement of being oneself.
The language of value in the world of objet de luxe is modest in inverse proportion to the price, value, and authenticity of the item. Value might connote a different meaning in the world of luxury.
The value of luxury products is shaped by meaning content, not design; even clumsy design can be valued, collected, and treasured.
The Boston Consulting Group defined luxury goods as “Items, products, and services that deliver higher levels of quality, taste, and aspiration than conventional ones.”
Luxury is also about brands. Bernard Arnault's famous definition notes that “Star brands should be timeless, modern, fast-growing, and highly profitable… There are fewer than 10 star brands in the luxury world, because it is very hard to balance all four characteristics at once – after all, fast growth is often at odds with high profitability – but that is what makes them stars. If you have a star brand, then basically you can be sure you have mastered a paradox.”
Buyers in this segment are not only interested in the product but also with its associated values in terms of class-consciousness, emotional and artistic appeal, a unique design, and a cultured and refined taste. Yves Carcelle, former chief executive of Louis Vuitton, said “It's about reliability, quality, style, innovation, and authenticity.”
Luxury products offer self-reflexive connections to a person's sense of self-esteem, competence, and personal value. It is said to be characterized by: “Inherent scarcity, sincerity, consistency, transitivity, emotional connectivity, mastery of excellence, service – elegance.”
Definition of Luxury is dialectic. Luxury is a break, a deviation from what is ordinary and what is necessary. And it is the variations between the ordinary and the necessary during different times, societies, and cultures that will lend themselves to major developments in luxury. Sacred in origin, secular when it becomes an instrument of worldly power (Louis XIV), reduced to a minimum for the emerging bourgeoisie (a comfort-based and necessity-based luxury), subject to market laws since the French revolution, a superfluous necessity of today. The dialectic is based on a double movement – on one hand, a human need to create a special moment, objects, practices, and behaviours discordant with the ordinary and necessary and on the other, a movement of integration for these gaps in the regular course of society. It is vital for human beings as they search for more, for better, for beautiful… It is nothing other than humanity forever separated from a world governed by the order of our needs, into an ideal world, where one shall desire what is good for him or her. Nothing more, nothing less. Hence the moral dimension is always attached to luxury.
Evolution
In the context of the historical perspective of luxury, as a snapshot, it is important to trace the evolution that might point out some empirical truths about luxury and whether such an industry can stand the test of time and whether new brands can survive in such an environment.
Has the luxury industry itself changed over time? Contextually, in every era luxury is about selling a dream; it is aspirational. The term luxus or excess was coined in Rome. To understand how luxury and luxury items are able to sell such a dream factor one has to look at what dream is being sold. It is a dream of being special, of feeling like you belong to a special set of people. That hasn't changed since time immemorial. The Roman baths were exclusive and only the elite were allowed. Only the elite could wear certain materials and participate in certain activities. The Sumptuariae Leges of Ancient Rome10 were various laws passed to prevent inordinate expense in banquets and dresses, such as the use of expensive Tyrian purple dye.11 Individual garments were also regulated: ordinary male citizens were allowed to wear the toga virilis only upon reaching the age of political majority. In the early years of the Empire, men were forbidden to wear silk,12 and details of clothing including the number of stripes on the tunic were regulated according to social rank.
While in modern times there are no such laws, it nevertheless amounts to the same thing when some things are more expensive than others, thus making them affordable only for a selected few. The more unaffordable they are, the more desirable they become. If we look at when the Romans traded with the Britons, there was internal trade between the Celtic tribes of Britain, especially in metals and pottery. The Romans and Celts shipped pottery, glass, bronze and iron objects, and wine to Scotland. In return they received slaves, cattle, hides and furs, animals, and possibly wool. The Romans increased production of minerals, particularly lead, but also silver, gold, and tin. Also, British woolen products were considered the best in the Empire and were much sought after as fashionable goods. In every country, precious metals and gemstones and good cloth were considered luxury. Consider the Egyptians, who also admired luxury and even buried their kings with enough, if not too much, luxury goods so the journey after life could be more comfortable. In the Renaissance or Restoration periods, luxury was still being able to afford jewelry, fine clothes, and better transport, better living conditions, and better food. And it is from supplying this need that companies such as Cartier, Louis Vuitton, and Hermès were able to be as successful as they were. Luxury is as relevant in today's society as it always has been.
Traditionally, Europe has always looked toward the East for gems, silk, and spices. Traders used the Silk Route to travel east. The route grew during the rise of the Roman Empire because the Chinese initially gave silk to the Roman-Asian governments as gifts.13
Originally,
Rebeiro,
Jacoby, “Silk in Western Byzantium before the Fourth Crusade.”
“Silk: History,”
“The Romans in Britain: Trade and Travel.” http://h2g2.com/dna/h2g2/A3473967.
