‘Diamond rings? Woolworth’s ain’t got no business selling them’
Fats Waller might not approve, but luxury is no longer just for the rich. Rhymer Rigby discovers how brands and designers have made high style big business.
Something strange has happened to the luxury market in the past 15 years. Cast your mind back to the early 1990s. Luxury was clearly defined. Brands such as Ford, Tesco and McDonald’s served most of the population and the likes of Jaguar, Burberry and Harvey Nichols didn’t. Everyone knew where they stood.
Today, the luxury market’s boundaries are fuzzy. Many upmarket brands have coveted a piece of the lucrative mass market and the mass market has sought to serve the growing band of consumers who want to trade up to luxury.
The proliferation of premier-range goods and services in everything from cars and phones to supermarkets and banks has been matched by growth in ‘luxury-diffusion’ ranges and entry-level products. Often, there is a significant overlap.
While we find it easier to grab a piece of ‘luxury’ during our supermarket shop, most of us know we are often buying a mere illusion of the good life. Yet as ‘masstige’ (mass-market prestige) has become more affordable, more consumers covet the trappings of the super-rich.
Ownership of yachts and private planes has soared in the past decade, and part-ownership schemes have allowed multi-millionaires to join billionaires in this exclusive club. The size of the average American home has doubled since the 1950s and although the downturn has hit hard, the market for property costing seven figures (on either side of the Atlantic) is far more buoyant.
Elizabeth Taylor's natural grace made her a poster girl for effortless luxury in the 1960s and 1970s
Conspicuous consumption is not new – the term was coined by Norwegian economist Thorstein Veblen in the 1890s to describe the nouveau riche who profited from the second industrial revolution – but our attitudes are. Even in Britain, it is fine to flaunt. We all want to ‘trade up’, and our relationship with iconic celebrities mirrors this cultural shift. Stars who embodied luxury were once unattainable.
The decadence of Liberace or Elizabeth Taylor reflected their charmed, God-like existence and was hardly aspirational. But today, stars such as Victoria Beckham and Jennifer Lopez market their chic through perfumes and clothing. Lopez’s ‘brand extensions’ are said to be worth £130m.
As the average UK income has doubled in real terms since the early 1990s, this current downturn might nibble away at the edges of mass affluence. But it won’t undo the basic changes to our consumption habits – no matter how many columnists write about friends who shop at Aldi.
Incomes and aspirations have risen, as the price of many consumer goods has dropped. A £100 camera does far more than one that cost £500 five years ago. Globalisation has driven down the cost of everything from clothes to wine. Once people can afford almost everything they need, they change.
“In recent years, we’ve seen consumers become more discerning as they react to the ever more complex messages brands bombard them with. Consumers have become more sophisticated and demanding,” says Simon Browning, head of industrial design at consultancy PDD. “As a result, we’ve had to create deeper connections between products, brands and people and become more holistic in our approach to deliver experiences with value.”
Naturally, brands have responded. In the mid-1980s, Toyota developed what became one of the most successful mass-to-luxury brand extensions – the Lexus. The first Lexus was launched in 1989 and quickly became established as a luxury marque. Toyota believed that for Europe and the US, it needed to create a new luxury brand because ‘Toyota’ lacked the right connotations.
For glitzy pianist Liberace, nothing succeeded like excess. He had a toilet ensconced in a throne in his bathroom and did more for rhinestones than Glen Campbell
Mercedes is a useful counter-example. The world over, the company is associated with luxury cars. It also sells white vans. “Selling vans doesn’t do Mercedes any harm,” says Wally Olins, chairman of brand consultants Saffron and author of The Brand Book.
Bentley wouldn’t dream of that sort of brand extension – in its world, marque is everything. Still, sales have grown ten-fold in the past decade, which suggests our faith in getting what you pay for remains touchingly undimmed.
Many of the mass-market ‘new luxury’ items aren’t big purchases. Sales of Sainsbury’s Taste The Difference 21-day slow-matured British beef rump have grown by 300% this year. Champagne (whose mix of relative affordability and status epitomises mass luxury) has also enjoyed significant growth. You can even buy champagne-infused Marmite.
Some brands provide nothing but everyday luxury. Apple’s products perform similar functions to other phones, MP3 players and PCs but are desirable, easy to use and make owners feel special. Browning says most things can now be upgraded: “Take coffee. Nespresso is more about being part of something and making an aspirational lifestyle choice than appreciating espresso,” he says. With its ergonomic design and George Clooney adverts, it is the ‘coffee-machine-as-lifestyle statement’.
Barclays will try to do the same with its Premier Banking scheme. Select branches for affluent customers will be styled with “everything to ignite inspiration and desire”. Out go the dull, corporate furnishings, in come Armani coffee tables, Casamilano lamps and Louis Poulsen lights.
Such products point to the contradictory heart of the new world of luxury. The Russian billionaire Roman Abramovich is hardly likely to be seduced by a Casamilano lamp – nor are those who manage his finances. Mass luxury is as much about perception and marketing as reality and quality, which is why the race to bring out newer, better products is endless.
Barclays luxury branches point to the contradictions in the market. Is the billionaire Roman Abramovich likely to be seduced by Casamilano lamps?
He says the ‘brandalism’ that befell Burberry, when its range was appropriated as part of the ‘chav uniform’, is proof our relationship with brands is changing. Consumers interact with them and can change them radically. “Burberry didn’t really understand what happened,” Olins says. “You can’t control how someone uses your brand.” In May, the company responded by bringing out a new alligator-skin handbag for a cool £13,000.
In an age when you can buy a small jar of black truffles over the internet for £10, there is no point bringing them out at your dinner party – no matter how much you’ve spent. To distinguish yourself from the crowd you have to go further. For some this is product (custom-made furniture is very popular and the luxury cruise market is growing at 11% a year) but Barclays’ research suggests that, for the truly rich, time is the ultimate luxury good.
Analysing the habits of 790 of the world’s wealthy, it found them turning en masse to personal shoppers and concierges, seeking to enhance the ‘experience’ of being wealthy. And, as the credit crunch bites deeper, the two luxury goods that will remain unattainable to the masses are still time and space.
Going up...
Everyday items given an exclusive makeover
Fast food
Burger King is offering probably the world’s most expensive burger at its Gloucester Road branch in London. ‘The Burger’ costs £95 and contains white truffle, champagne onion straws and Himalayan rock salt.
Drink
Billed as “pop culture in a bottle”, water brand Bling H2o has captivated celebrities with its Swarovski-decorated $40 bottles of spring water.
Watches
Swatch invented the idea of the watch as a fashion accessory but saw its market saturated by rivals. The answer? Move upmarket. It bought a stake in luxury brand Rivoli in July and partners with Tiffany.
Social networking
The catchphrase “I’m ASW” will help you get into the right nightclub and jump a waiting list for a Hermès bag. But exclusive social network ASW is under fire because, with 325,000 users, it’s no longer exclusive enough.
Victoria Beckham
The former Posh Spice has the fourth biggest celebrity perfume in the UK, a line of handbags and jewellery and her own range of clothes
Going down...
When luxury enters the mass market
Fashion
For years, Vivienne Westwood’s subversive chic was available only from her King’s Road shop. In common with many luxury fashion labels, however, Westwood is now mainstream, with stores as far away as Russia, Taiwan and even Liverpool...
Property
Owning a second home abroad once meant a dodgy time-share on the Costa del Sol. Now 800,000 Brits own 425,000 overseas properties worth £58bn, as TV shows encourage investment in Eastern Europe and other unlikely destinations.
Cosmetic surgery
Once the preserve of the super-rich, the UK market for cosmetic surgery has tripled in five years. High-street chemists frequently offer botox injections in store.
Shellfish
No longer a delicacy, lobster is now no more expensive than steak in many restaurants, as it goes out of vogue among the wealthy.
Beau Brummell
The definitive Regency dandy was an arbiter of taste who virtually invented the idea of men's fashion. He is said to have taken five hours to dress himself each day
Article first published in Design Council Magazine, Issue 5, Winter 2008
Picture credits
Elizabeth Taylor: Corbis
Victoria Beckham: PA Photos
Liberace: Corbis
Beau Brummell: Bridgeman Art Library