Creative Supply founder Youri Sawerschel and Frame Magazine’s Tracey Ingram get together for the third in a series on space and branding, bringing together insights from Sawerschel’s realm of brand strategy and brand design, and Ingram’s role as editor at large for one of the world’s leading interior-design publications. Here they discuss how new demographics and players are altering the luxury market.
Tracey Ingram (TI): Last year saw the luxury market’s first decrease in over a decade. But even without the interruption of pandemic, the market has significantly shifted over the years. What changes have you observed?
Youri Sawerschel (YS): I remember when I was 15, I would check every week to see if Prada had launched its website. It was so exciting, even though you couldn’t use it to buy anything since there was no e-commerce. Today, luxury brands have to address a main target group born with internet access. Not only do they have to come up with ways for people to consume luxury in a digital world, but they’re faced with the paradox between accessibility and exclusivity.
TI: I agree, and this new reality is also very connected to the experience economy – the idea that you can have a luxury experience without necessarily having to own something. It’s driven by the younger generation who demand more freedom and accessibility to have what they want, when they want it.
I think we also have to take into account that ‘luxury’ can refer to many things, not just to the most expensive things out there. In Amsterdam, for example, you have bicycle subscription services like Swapfiets. Bicycles aren’t luxury items – but it is a luxury to have a bike exactly when you want it. That if it breaks down, someone will come along with a car and deliver a new one to you on the spot. These kinds of services relate to the idea of time being a luxury – that a brand can make your life easier. This idea has been floating around for a while now. How can a brand or service save me time? Give me more time for myself? If we translate that into the look and feel of spaces, we’ve seen a shift away from the bling-bling and ostentatious towards slower, more down-to-earth designs. Claus Sendlinger’s SLOW brand, which is about local hospitality experiences, comes to mind.
“Even though everyone can access your website or your social media, the actual distribution of goods – via online or physical stores – has to remain limited.”
YS: But that depends on which customers we’re addressing. If you look at Central Europe, I agree. But in places like China, the Middle East and Russia, the notion that luxury is something you display still holds strong.
TI: True, which in other words means ‘luxury’ can look different everywhere. What do you think that means for international brands that have a global presence? How can they speak to their demographic and location while being authentic to themselves?
YS: I think special-edition partnerships are a good example. They allow you to plug yourself into a specific conversation or area of interest without repositioning your whole brand. More generally speaking, brands need to find a balance between short-term profit and long-term gain. I believe Louis Vuitton has announced it will close a lot of stores in China over the coming years. One, because China is slowing down, but also because the brand has realized that if it has three stores in tertiary Chinese cities, the brand becomes diluted, even if it makes cash in the short term. Are you still exclusive, or are you a 7/11? Even though everyone can access your website or your social media, the actual distribution of goods – via online or physical stores – has to remain limited.
TI: And limiting availability is also more sustainable than offering a million of something, so it does double duty there, increasing exclusivity while meaning you’re producing less.
YS: Exactly. The whole market is moving that way. Massimo Dutti, for instance, is looking to become premium because it’s realized that’s the only way to be more sustainable. You can’t keep selling $5 T-shirts: that’s unsustainable by definition.
TI: If that’s the case, then how do you think brands can separate themselves from the mainstream?
YS: For large, established luxury brands, I’m not sure it’s so important to separate from the mainstream. Most brands always operate on different levels, right? I mean, a student can buy a key ring from Chanel. I think offering different levels of products and experiences is more important than separating yourself. How can you maintain that aspirational image while actually tapping into the masses?
TI: It reminds me of fashion houses such as Gucci entering the gaming market, selling outfits that avatars can wear in video games. Gamers might not want to own anything like that in real life, but in this way, brands can then become part of pop culture.
“The Supreme x Louis Vuitton partnership showed that a luxury brand could partner with a streetwear brand, levelling it up.”
YS: And that’s really what they want to be doing. The Supreme x Louis Vuitton partnership showed that a luxury brand could partner with a streetwear brand, levelling it up. That’s interesting. South Korean eyewear brand Gentle Monster also tapped into culture early, riding the K-Pop wave to success. While most luxury brands are still guided by Europe, I think there’s huge potential in these types of regional brands to shake up the international market.
TI: Gentle Monster is also a great example of how tapping into culture can translate into the look and feel of commercial space. Its otherworldly stores are more like art exhibition spaces than selling spaces. Sometimes the merchandise or the cash desk are almost hidden from sight, or at least positioned far from the entrance. They’re stores that encourage you to walk around and linger, not just nip in and out for a purchase – which you could do online. And they’re all different, which makes you want to visit them as if they were tourist destinations. This is very much in line with predictions that retail spaces will become more like entertainment spaces, places where friends meet to socialize. In terms of design, this could mean adding hospitality and relaxation amenities – the new D&G store in Seoul has a roof terrace, just as one example.
YS: I agree that we’ll keep on seeing a merge between retail and hospitality. Things like La Samaritaine, a new Paris shopping mall with LVMH-owned Cheval Blanc hotel in it. Luxury watch brand Audemars Piguet is opening a hotel next to its manufacturing facility in Switzerland. IWC, another watch brand, opened a bar in Geneva.
“Gentle Monster stores encourage you to walk around and linger, not just nip in and out for a purchase – which you could do online. ”
TI: This connects to the idea of offering different levels of products, too, since a glass of wine is much more affordable than a handbag or a watch. Hospitality is another way to offer a service, which has always been such a big part of the luxury market.
YS: Yes, absolutely. And when retail brands begin to offer these kinds of services, they will still need to use brand markers, as we call them. Ways for customers to understand that they’re experiencing a specific moment of service. The classic example is the hot cloth you get to wash your hands and face when entering a resort hotel. There’s this idea that you should anticipate client needs. That only works if you have, say, three customers and ten staff – if you fly business class with Singapore Airlines then they can anticipate your needs. On the other hand, if you’re entering a Prada boutique, no one is really anticipating your needs. That’s why these markers become so important.
“When retail brands begin to offer hospitality services, they will still need to use brand markers, ways for customers to understand that they’re experiencing a specific moment of service.”
TI: Do you think they need to be different than what’s been done before?
YS: Not necessarily, but luxury goods companies that go into hospitality need to decide how the markers connect with their brand. How do you sell wine in an IWC bar? What type of cocktail do you sell? What type of glass do you use? How do you deliver it? Suddenly you have to answer all of these questions. Yes, you could copy the Four Seasons, but then it’s not connected to your brand. It’s about defining those markers for you.
TI: Indeed, and then also offering things that make sense for your brand, not just because everyone else is doing them. Speaking of offerings, what more do you think luxury brands could offer to their customers?
YS: I think personalization could be taken much further. Since Audemars Pigue is opening a hotel, for example, couldn’t you go and spend a few days there developing your own watch on site? Or to go even further, a couple of years ago we worked for a very wealthy individual who was developing his own property in Ibiza. We created a personalized logo for him to go on everything from his Mercedes G-Class to the entrance door of his home, like a family crest. He even developed a personalized scent. Ultra-customization is about creating your own legacy. The ultimate brand is the one that’s only yours and that will outlive you. Yes, it’s a very niche, ultra-luxury segment, but I think there’s potential there.
“All the main brands more or less have the same style of logo now, but I think we’ll return to something with a lot more craft.”
It’s interesting, too, that a lot of new young brands are inventing their histories to give themselves substance. High-end cosmetics brand L’Officine Universelle Buly, for example, looks like it’s out of the 19th century. That’s because it first existed in the past, but it was actually only recently revived, in 2014. Or there’s TWG in Singapore, which plays with 19th-century colonial design but is also a fairly recent brand. All the main brands more or less have the same style of logo now, but I think we’ll return to something with a lot more craft. We’ll either tap into history or re-create it, going back to something that feels safe and secure. People want to feel that after COVID-19.
TI: L’Officine Universelle Buly’s revival actually led to a really interesting concept for its first Tokyo store, which contrasted the brand’s 19th-century roots with its representation in 21st-century Japan by splitting the space in two. One half was crafted from wood by a French carpenter using traditional techniques, and the other is made from concrete and envisioned as the ‘pharmacy of the future’. I like that it didn’t simply try to re-create history, but brought it into the here and now.
YS: It’s a blending of old and new, which is also happening in hospitality. We’re actually starting a high-end project at the moment that’s about bringing a modern spin to the spirit of the grand hotel. There’s always been a concierge, for example, but it’s such a dusty concept. Something your grandparents might like. Could a concierge be cool again? What would they offer? And whereas you used to dress up to go to a grand hotel, people today enter the likes of the Shangri-La in flip-flops. What if we brought back the dress code, but updated it for today?