BITES // 11.02.23 // LUXURY HAS A NEW LOOK AND FEEL
Every month we collect six of the best pieces of content published on the web and share them with you because we believe that the most extraordinary thinking is inspired by looking to unexpected places. BITES is a reading list for those who want to bring a little of the outside in.
OVERVIEW -
The luxury retail market is undergoing a transformation, with sales in the United States forecast to exceed $75 billion by the end of 2023. Luxury has traditionally been associated with a high price point but with Millennials and Gen Z shifting what luxury looks, feels, and is priced at. Luxury retailers leased 650,000 square feet in the past year — the focus is shifting away from the mass market to a small but growing audience that uniquely values quality and brand prestige. When you think of the word “luxury”, we traditionally associate this with being flashy, pricey, or exclusive. Men’s luxury is also driving a shift in consumption, with a growing emphasis on luxury return on investment rather than fleeting trends. Luxury buyers seek more than transactional relationships with brands, so fostering a sense of belonging and involvement is key to building loyalty.
1. GUCCI AND VICTORIA SECRET STRIVE FOR DEI
The luxury industry has traditionally been exclusive, not just when it comes to the price tag but also the creative talent in the business. Gucci has introduced a new program in Europe that aims to open doors for young creatives from underrepresented backgrounds. This new program is called “Changemakers’’, its social impact initiative established in North America in 2019 with Gucci’s Changemakers in North America already supporting more than 50 nonprofits with grants and over 70 students with scholarships and will be working with London creatives. In the U.K. there have been concerns about the long-term impact on the creative sector as public funding for arts education has declined. In 2021, the government cut funding to arts and design higher education courses by 50%. Now, there is a multi-year program in place, which is brought to you by the London College of Fashion and University of the Arts London, offering multidisciplinary scholarships to students who face financial barriers to higher education. The scholarships provided by “Changemakers” will cover tuition fees as well as maintenance support over a three-year course. The program also includes mentoring, training and workshops led by artist Ronan McKenzie. Victoria’s Secret made its adaptive fashion debut at the Runway of Dreams show during New York Fashion Week. It was also a momentous occasion for the models. Like many others, they had grown up watching the Victoria’s Secret runway show on television. With most bras and lingerie on the traditional market not being sensory-friendly, it’s been difficult for disabled people to find a design that is both comfortable and cute for them to wear. Lydia Smith, Victoria’s Secret’s Chief Diversity Officer, described the intensive process the team went through with focus groups to make sure the products were perfect before showing them on the runway.
2. WALL STREET IS GOING FROM BLACK SUIT TO CASUAL
The global pandemic pushed financial giants to embrace a more casual dress code that many other corporations had begun to embrace. The dress code for Wall Street has traditionally been formal dress with an emphasis on dark colors that don’t stand out. For the women on Wall Street, the shift from business formal to business casual has allowed them to step out of the unofficial uniform of pantsuits and sheath dresses and more colorful options that make an outfit stand out more. Men are swapping out their suits for button-down shirts, khakis, sports jackets, and more colorful trousers. Many are leaning into the athleisure trends taking their styles to both in and out of the office. Heels and loafers are out, and sneakers are in, many of the younger bankers and financial analysts are opting to go for comfort with many wearing Air Force Ones and other similar styles to the office. They’re also trying to dress to their audience and dressing to meet what their clients style is. Michael Wilkinson, 35, a director within Wells Fargo’s corporate and investment bank said “For a lot of client interactions, dressing business casual can make it more comfortable and can lead to a better relationship-building experience.”
3. ONE SIZE FITS NONE WHEN IT COMES TO SNEAKERS
Finding a good fit is something of a scavenger hunt for most consumers. According to tech company Narvar, footwear and apparel represent 62.5% of all product returns, with “fit and size” problems being the main culprit. Building a better fit is simply better business. A few new startups are trying their hand at customizing shoes for consumers. These new startups are offering styles, colorways, and other personalized designs so that sneakerheads may soon be able to craft the shoe that looks and feels like their dreams. Speedland, a sneaker startup, has three different models with two dials along the shoe, allowing wearers to tighten other parts to achieve a more snug fit. Another startup, Hilma, asks customers a series of questions before they purchase their shoes, so the company can predict which one of its models will fit them best with their shoe prices starting at $160. Iambic is pricier with their shoes starting at $550 but takes that concept of Hilma one step further and asks customers for their fit preferences but also prompts them to scan their feet using the company’s smartphone app. From there, Iambic crafts the perfect shoe.
4. IRL LUXURY SHOPPING GETS A REVAMP
As more people return to offices and socialize, they’re dressing to impress, which means the clothes they buy and where they’re buying them are evolving. As the names, faces, and pocketbooks of luxury shoppers continue to evolve, so will the brands and their IRL experiences. Consumers are now shopping in stores for brand quality and prestige, setting up the US luxury retail market to exceed $75 billion in sales by the end of 2023. The expansion of luxury retail proves brand experience that is still showing to attract big spenders. Luxury retailers want to stand apart by opening exclusive luxury wings, highlighting the unique experience of luxury shopping and reflecting the desires of today’s luxury consumer. Many luxury shoppers favor ROI rather than trendy pieces. Alexander McQueen is opening a store in Copley Place in Boston and SouthPark in Charlotte, while Dior is opening a store at The Mall at Millenia in Orlando and The Domain in Austin. The US accounts for nearly 32% of global luxury sales, with sunbelt cities like Miami, Atlanta, and Las Vegas making up the biggest portion of luxury leasing. LVMH is building a luxury destination right in the heart of Paris, giving aspiring artisans and curious visitors a place to interact with the 280 skilled trades that power the fashion conglomerate’s 75 brands. While other fashion houses have launched their own training facilities, the open-to-the-public aspect is part and parcel of a new push to have physical spaces where fans can participate in unique experiences that deepen their loyalty. Despite tightening in the real estate market, luxury retail is growing and exceeding pre-pandemic levels.
5. QUIET LUXURY IS ON THE RISE
Quiet luxury isn’t just a fad but many brands are using it as a sustainable, long-term business model. At the heart of quiet luxury is a focus on the needs of the customer. Many aren’t sporting the large logos on clothes anymore and are instead opting for well-made, high quality products that aren’t flashy. This trend really rose post pandemic, as stimulus checks stopped coming and people spent more disposable income on entertainment and on expensive, trendy products. Consumers now want to invest in classic, high quality goods that would last a long time. The idea of quiet luxury was reinforced by the TV show Succession, in which the wealthiest New Yorkers eschew loud labels for elegant, but subdued clothes and accessories. When it comes to trends it is designed to become obsolete, which means customers will toss them after a short time. Quiet luxury, on the other hand, is designed to be relevant for as long as possible.Customers get excited about trends, but they repeatedly come back to experiences that are consistently high in quality and tailored to their needs.
6. LUXURY WATCHES ARE THE NEW STREETWEAR
Expensive timepieces now experience the kind of hype cycle that we more closely associate with streetwear. Swatch, one of the leading watch companies in the world, saw a 55% increase in profits in the first half of 2023 with Swiss watch exports reaching an all-time high of $25 billion in 2022. The first love-in between the luxury watch world and streetwear began in 1997 as G-Shock, the chunky off-shoot of Japanese watchmaker Casio teamed up with the much lesser-known at the time Stüssy, a surfwear brand. Citizen Marvel has teamed with the MCU universe to make a Loki inspired watch in the latest of their Marvel collabs. TAG Heuer Carrera teamed up with Porsche to design a watch with movement that revs like a Porsche engine. For the first time, Dutch streetwear label, La Fam is partnering with G-SHOCK for a watch collaboration starring the GMA S2100 model. Ed Sheeran worked with watch news and shopping site Hodinkee, G-Shock and fellow singer John Mayer to design a sunny-colored timepiece collab. Dubbed the G-Shock Ref. 6900 — Subtract by Ed Sheeran for Hodinkee, the resin watch features design elements inspired by the singer’s 2023 album, Subtract. Leonardo DiCaprio has become a major investor in the independent Swiss watch brand ID Genève, which is dedicated to making timepieces from sustainable materials and methods. All of this shows that the luxury watch business is experiencing a golden moment.
TAKEAWAY-
Luxury accounted for 38% of new store openings and almost 40% of overall luxury retail leasing in the past year. As more and more people return to offices and post-pandemic socialization gets more people out of their homes, luxury athleisure sales are giving way to sportswear, reflecting changing consumer preferences.Younger consumers and luxury go hand in hand, with the majority of luxury consumers being Gen Z or Millennials. Luxury brands are looking for new opportunities to convey prestige and quality, with a focus on attracting both new and seasoned luxury shoppers. As the demographics of luxury continue to evolve, so too must brands and their retail footprint to capture market share.
