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De-materialization of Luxury

De-materialization of Luxury

De-materialization of Luxury is an emerging consumer trend can be explained by two intertwined phenomena: the increasing set of growth-related needs that brands need to compete on; and the increasingly immaterial domains of luxury.

Beyond traditional Needs

While the notion of “need” tends to be associated to Maslow’s hierarchy, and its pyramidal dichotomy between human survival and personal growth categories, our understanding of the trends impacting the consumption needs, is better explained through a Benefit Laddering framework. This is because the benefits, are product or brand features, which address consumers needs, in a very specific way, and therefore help bringing the discussion from a generic need to a specific consumer insight.

Laddering is a research technique which enables hierarchical positioning of concepts in pre-defined clusters. Traditional brand and product benefits ladders, used to be built around three categories: technical, functional and emotional benefits. In other words, all product and brand offering were built around their ability to deliver on technical specs (e.g., the highest definition camera), functional proposition (e.g., double flash option to reduce red-eye effect) as well as emotional propositions (e.g., peace of mind that the daughter’s birthday pictures are going to look great). More specifically the emotional ladder is the one that premium and luxury brands have traditionally leveraged to discriminate themselves from their competitors, while delivering – conventionally at the same time – on both the functional and technical clusters.

More recent approaches to brand laddering include further categories, such as transformational, cognitive as well as societal benefits. These incremental categories serve the purpose to put in context the deeper role that a premium and luxury brand needs to play in the changing landscape: many consumers expect brands to play a role in their personal journey, as well as, to be bond to an higher purpose.

In a nutshell, evidence of the de-materialization of needs, stems, first and foremost, from the emerging bond between brands and consumers on non-traditional territories, just like in the case of purpose branding. Consumers are now demanding of brands, higher purposes, more focus on sustainable business practices, more inclusive innovation, as well as cognitive platforms.

Evolution of Luxury beyond traditional domains

In addition to that, there is empirical evidence, from the transformation of the luxury industry itself. At its origin, luxury developed in four distinct – yet adjacent – domains: food, fashion, leisure and shelter – with mobility being a cross-platform of the last two. In this consumerist sense, luxury was born around the notion of material possession and orchestrated leisure experiences. But in this era and age, one can observe the emergence of additional luxury domains: time, space and immersive sensorial experiences are taking over from the traditional luxury territories. And this is why we argue that the de-materialization of luxury is happening now, and is a trend for the future.

On one end, millennials are more and more focused on the sensorial dimension, to the extent that the term Experience Economy has been coined to identify the craving for – and the collective consumption of – experiences. Main emergent drivers of the Experience Economy are: attending festivals, events and themed runs – in lieu of material possessions. These experiences become part of the consumers’ soul searching journey, and therefore require connection at transformational and cognitive level.

On the other side, older and wealthier consumers in advanced economies are signaling their elitism, by rejecting the traditional consumerist approach to luxury, while embracing new luxurious categories, such as education, health and retirement.

In conclusion

More and more brands in the premium and luxury domain, will need to address the trend of de-materialization: either by establishing a more transformational, purposeful and cognitive bond with their consumers, and/or by focusing on less material domains of the premium space.

Growth Adviser, Innovation Catalyst, Branding Architect, International Expansion Consultant. International change agent and leader, launched growth consulting boutique in 2012. We have four principal areas or intervention 1) Branding (e.g., positioning of new brands, re-positioning of existing brands, brand architecture and design) 2) Innovation (e.g., co-creation with consumers and experts, ideation, business planning, concept validation and fine-tuning) 3) International Expansion (e.g., countries screening and development of expansion plan, route to market strategy, portfolio) 4) Route to Market (e.g. marketing and commercial planning, portfolio analysis).