Luxury, only enjoyed by royalty in the past, has transitioned into a realm seemingly obtainable by the masses today. Driven by what is called "the new royals", anyone can imitate at least part of a celebrity lifestyle now, says Vittorio Radice, chief executive of La Rinascente, an Italian department store now owned by Central Retail Corporation of Thailand.
Luxury has come a long way from its original status in the past, when the world's royal families were the only privileged group to enjoy such indulgence. Today, while Joe and Jane Average might not be able to imitate the royal lifestyle in its entirety, they can afford to have a few coveted pieces of it.
When the Louis Vuitton brand was founded, Radice said, one of its early advertisements put the symbols of European royal families on it, indicating that Vuitton was the supplier of the elite. "The idea was for the people to think, the king has a piece of Vuitton, and I can be just like the king just by having a piece of Vuitton, too."
As the world evolves and lifestyles change, people are becoming more removed from the royal families and associated more with "the new royals" or celebrities _ singers, soccer players, actors and entrepreneurs. Their presence in the media as well as their brand endorsement drives the growth of luxury items, according to Radice.
"For normal customers today, by acquiring a lipstick by Chanel or Dior, at the cost of 1,490 baht, they have a part of the lifestyle of a celebrity. They are also a celebrity. We have the explosion of the luxury business because a huge amount of people now have access to the products. You don't have to spend 2 million baht to imitate Charlize Theron _ a lipstick or a pair of decent sunglasses is sufficient."
The change in consumers' mentality is another factor driving growth in the luxury market. With so many platforms, from ordinary rendezvous to social media, people can show their personality more. There is the need to feel at advantage, to experience things before anyone else. Whether it is seeing a movie before others, or knowing about a new shop before others, it is a way of building a person's image.
Radice said that today we describe ourselves with the things that we wear, eat and do.
"I wear certain things. I've been to certain places. This is my personality. We use this to describe ourselves most of the time."
This shift in consumerism results in a change of lifestyle. Whereas people used to go out when they needed to buy something or do something, today people just go out for the sake of being outside, without having a real purpose. Radice pointed to a study from market researcher and analyst Euromonitor which said 82% of people walking on the streets are just enjoying a day out.
"They don't need anything. Their closets are full. They have more shoes than they can cope with, but they continue to buy to build the personality. This is where the luxury business comes in to play," the guru explained. The business is also fuelled by the travelling trends today, where people travel more whimsically and freely.
He cited a National Geographic article from September last year saying that the world's population had passed 7 billion and the number of tourists worldwide had reached 1 billion.
"This means one in seven people travels, and when you travel, you spend money. When you travel, you are in a relaxed mood and you want to indulge in pleasure, and one way is to acquire things." One readily apparent example of the boom is the increasing number of luxury stores worldwide. Louis Vuitton, for instance, expanded from about 130 shops in 1990 to more than 400 today. The growth in market value of top luxury brands is also interesting. The top three brands enjoyed big growth last year. Louis Vuitton's market value is US$25.9 billion, a 7% increase. Hermes is valued at US$19.1 billion, a 61% increase. Rolex is valued at US$7.2 billion, up 36%. This is the way it will continue to be.
"This phenomenon is here to stay. Brands will continue to open more stores," he forecast. From something highly unobtainable in the past, luxury today is marketed as something you too can have. Instead of having steely, unwelcoming atmospheres that makes people feel inferior, shops are now geared for a warm, welcoming embrace. Radice gives an example of one of his customers who walked into Selfridges in England and asked to try on an Armani jacket.
"He said he had heard this name so many times, but was never able to touch a piece of Armani. Now he's wearing it. He thanked me and he left without buying."
Radice said the experience had empowered the man as well as the brand, and when the day came that the man could afford it, he would definitely come back to buy from Armani before any other brand.
Brands, therefore, have to remove the threatening feeling and make shoppers feel at ease, whether they are customers or not. The idea is to make luxury feel accessible to everyone.
"Luxury should be associated with everything _ food, architecture, views, in the way that people will not be threatened to acquire the products," Radice said. "A luxury department store should provide both an expensive bag and an espresso, sold in the same place, with the same smile, in the same shopping bag. Customers should have the same experience whether they are buying a Gucci bag or a cup of coffee."
About the author
- Writer: Napamon Roongwitoo
Position: Outlook Writer