What kind of luxury for the post-Covid world?
In the latest Deloitte study on the watchmaking industry, we learn that sustainability has become an essential value, that second-hand watches are trending, that the "all-digital" approach has failed to establish itself, and that in-store purchasing continues to thrive — trends that are asserting themselves in an uncertain world confronted with an ongoing pandemic.
In these difficult conditions, imagining what the luxury industry will look like tomorrow is a daunting challenge. What will consumers desire? What will luxury players offer? These are two questions we must answer in order to attempt to envision the luxury landscape of the post-Covid world.
Sustainability: a fine opportunity for the luxury world?
A considerable body of literature has already been produced in the media on the consequences of Covid and the dawn of a new world. The most common conclusion is that we can no longer do things as before and that we will need to change our consumption patterns, all within a vision that integrates the challenges of sustainable development. These new concerns, growing stronger among consumers day by day, will inevitably have an impact on the luxury industry.
The Deloitte watchmaking study cited in our introduction sets the tone: "More than 50% of consumers surveyed take the sustainability factor into account when buying a watch. The evolution of consumer expectations, the company's own desire to embrace sustainability, and the media are all drivers of greater transparency." Longevity — sustainability's sister — has always been an essential value of luxury, and the famous slogan "You never actually own a Patek Philippe. You merely look after it for the next generation." has never been more on-trend.
If consumers are gravitating towards values such as proximity, craftsmanship, and authenticity — with a need for transparency about the origin of what they buy — then one can say that in theory the luxury industry tends to tick all these boxes. Another intuition suggesting that the post-Covid world is not at odds with the luxury universe is the desire people will have to dream again. Having had their purchasing impulses curtailed by a long period of consumption limited to essential goods, one can reasonably imagine they will experience a sudden need for "retail therapy" once better times return and the ability to stroll along the great avenues comes back.
All of these elements taken together lead us to believe that tomorrow's world is opening up to the luxury industry — provided, as they say, that it gets up early enough and innovates sufficiently to reinvent itself.
Two complementary players at the heart of the same industry
If recent years have seen the democratisation of luxury develop strongly, it is essentially thanks to the emergence of three giants: LVMH, Kering, and Richemont. In light of the elements discussed above, the question arises as to whether these groups are capable of continuing to embody consumer aspirations.
Are they fit to meet market expectations and create the luxury of tomorrow? While there is no doubt they are built to withstand, it is less certain that they possess the qualities that allow them to innovate: administrative heaviness, shareholder pressure demanding a return on investment, adherence to brand identity guidelines… These inertia-generating factors imply an absence of risk-taking and are not conducive to the creative freedom necessary for genuine innovation.
Conversely, smaller structures are known to possess qualities favourable to innovation. In fact, this may even be their very reason for existing: they are compelled to innovate or face extinction. As a result, they are obliged to launch "out of the box" projects and, going even further, risk-taking is their raison d'être. And in this new world in search of authenticity, sustainability, and proximity, these are values that smaller companies are better placed to embody — if only because they are human-scale enterprises.
This complementarity is vital. While the smaller players can supply the raw material of innovation, the larger ones have the resources and structures to launch projects at scale.
After all, there is nothing particularly new here. In earlier times, decorative arts and crafts orbited around courts in search of patrons; today, leather craftsmen, gilders, painters, cabinet-makers and all the other players without whom luxury would not exist, gather around the most audacious projects — ones that only groups with unlimited resources will be able to launch into orbit.
Back to the proven values of innovation
While everything seems to suggest that the luxury of tomorrow will seek to re-embody values of the past, this trend should not be confused with the vintage fashion movement. No, luxury will not save itself by reviving the forms of the past. If it wants to exist tomorrow, it must truly innovate by creating unprecedented and never-before-seen forms.
In this subtle exercise, one can perfectly well imagine that it will be small entrepreneurs who will have the capacity to innovate, while the major groups will be the ones to set the trends.
One example that illustrates this point is the Slovak company Rimac. In the late 2000s, a Croatian named Mate Rimac converted his old BMW 3 Series into an electric vehicle. His garage-built prototype attracted the attention of car manufacturers to the point where Porsche is now a shareholder. Rimac is today considered the builder of the most high-performance electric vehicles of the moment (1,914 hp / 0 to 100 km/h in 1.85 s). A model of success in which a single individual demonstrates that they are capable of creating a phenomenal object from scratch, capturing the attention of automotive giants who would probably not have been able to carry out such a project themselves.
Closer to our own field, the Around Five project we have launched aims to bring a historic object back into fashion: the desk clock. Only a small company can have the audacity to embody this concept from another era in entirely futuristic and unprecedented forms. A major group would not have been able to take such a liberty. On the other hand, only such a group will have the power to launch the trend and the firepower needed to make it fashionable again.
These two examples illustrate that innovation feeds on essential values such as freedom, boldness, and authenticity — in short, all the values that guarantee creativity. But for these to achieve universality, they need powerful allies.
If it wants to exist in the post-Covid world, luxury will inevitably have to take this path. Otherwise, one may doubt whether it will still be capable of making the younger generations dream.
