Cover Galeries Lafayette Paris (Photo: Getty Images)
Galeries Lafayette Paris (Photo: Getty Images)
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Luxury expert Daniel Langer looks at the paradox of plenty and the impact influencers have on luxury market’s predictions in Asia
In an unexpected twist, the luxury market today faces a paradox of plenty. Behind the glittering façades of flagship stores lies a growing pile of unsold luxury items, challenging the very essence of exclusivity that defines this sector.
This phenomenon roots deeper than the surface-level disruptions of economic challenges and uncertainties in many parts of the world impacting the growth of the luxury sector, a fear that some analysts have been highlighting recently after several brands reported softness in demand and even negative growth rates in their recent Q3 2023 financials. At its core, it reveals a structural misalignment within some luxury brands themselves.
For years, many brands were riding on a seemingly never-ending success story largely fueled by the economic growth of China and—as a result—an unprecedented appetite for all things luxury. Many brands neglected brand equity building and compromised on levels of craftsmanship that are a must to be perceived as luxury. Many brands—bastions of desire—thrived on a model of creating demand through scarcity and hype.
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Fashion designers became celebrities, and influencers, key opinion leaders, hip hop czars, and K-pop titans like Kai—aka the “Human Gucci”—further fuelled the craze for many brands. However, as we progressed into the 2020s, a disconnect emerged between brand perception, expectations, and evolving consumer behaviours.
The first misstep was in market prediction. Luxury brands, buoyed by pre-pandemic growth and the rapid recovery, produced in anticipation of a demand that was overestimated. This miscalculation was further compounded by a hesitance to embrace digital transformation that Gen Z is expecting in a world where online presence became as significant as physical exclusivity.
Moreover, many brands remained entrenched in their legacy, relying on the allure of past glories. They overlooked a crucial shift in consumer values towards sustainability, ethical production, brand storytelling, and authenticity. Today’s luxury consumer is not just buying a product; they are investing in what the brand stands for. A significant shift is happening from merely buying to being inspired, entertained, and being part of culture.
The pandemic, while a disruptor, was also a magnifying glass that brought these underlying issues into sharp focus. As we emerge into a post-pandemic world, luxury brands face a choice: continue on the traditional path and risk obsolescence or pivot towards a model that aligns with the new consumer ethos.
The path forward involves a radical rethink of client experience, a refocus on excellence in craftsmanship and wowing through exceptional products, an embrace of digital and experiential storytelling, and a genuine commitment to sustainability. Luxury brands need to engage in more than just gestures; they need to integrate these values into their core. Many brands are still over-reliant on the playbook of the past and on creative directors who are tasked with quick wins but not given the structure and framework to execute against a precise brand playbook. The result is visible in the numbers and the separation between great brands and followers is growing wider.
The luxury sector stands at a crossroads. The future belongs to those brands that anticipate and adapt to these changes, not just to clear their inventory but to redefine what luxury means for today’s clients in today’s times. This is not just about selling products; it's about selling a vision that resonates with the new luxury consumer. It’s about substance and about core values. As clients get more discerning, the clock is ticking for those who keep their eyes closed from the new reality.
Named one of the “Global Top Five Luxury Key Opinion Leaders to Watch”, Daniel Langer is the CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the executive professor of luxury strategy and pricing at Pepperdine University in Malibu, California. He consults many of the leading luxury brands in the world, is the author of several best-selling luxury management books, a global keynote speaker, and holds luxury masterclasses on the future of luxury, disruption, and the luxury metaverse in Europe, the USA, and Asia.
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Named one of the “Global Top Five Luxury Key Opinion Leaders to Watch”, Daniel Langer is the CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the executive professor of luxury strategy and pricing at Pepperdine University in Malibu, California. He consults many of the leading luxury brands in the world, is the author of several best-selling luxury management books, a global keynote speaker, and holds luxury masterclasses on the future of luxury, disruption, and the luxury metaverse in Europe, the USA, and Asia.
