Along with technology taking more space in our lives, for better or worse, a strong trend in luxury democratization has taken place the last 15 years.
We will dig here the relationships between Technology and Luxury Democratization, deconstructing this trend to dig further and try to forecast where we are going from there.
WHAT IS LUXURY DEMOCRATIZATION?
Luxury Democratization was defined by the Boston Consulting Group in 2002 as:
"Middle-market consumers selectively trading up to higher levels of quality, taste, and aspiration."
- "Middle-market consumers" is pretty straight forward for everyone to understand, it is probably you and me as you have access to the internet, can read and have the time to do so.
- "The quality, taste and aspiration" here show the switch from ready to consume, low quality and products without a real soul, as consumers are more keen to get interested in goods and companies with a compelling story, quality products, and a real purpose.
How a product is made, its impact, are now public, quickly known by everyone through global information, travel, and experiences.
Technology and information have helped us consider, evaluate and inspect companies carefully, as too many marketing messages and promises used to be oversold; now we can double check for truth and accountability. The standard messages such as “Believe us, you need this product or service, tapping into our little addictions, bright colors and fake scientific backups are fainting. Hence traditional advertising trust score versus social recommendation is quite mind blowing, as only 68% trust regular ads, whereas +80% are inclined to trust friends & peers. Source Nielsen.
Much more goes beyond this, consumers do not only buy a product or service anymore, but they also embrace, identify and support company’s values, emotions, experiences, and messages.
It is like consumers awareness has helped support and grow conscious companies and their services, for the better good in our opinion.
Why people dive into Luxury Democratization?
Our take is that as we all have seen the rich and famous enjoying the luxuries of life, served by cooks and butlers, cruise in luxurious chauffeured black cars and spending weekends at the beach house, seemed a pretty nice life right?
Apparently, some people, thought: "what if we could have the same privileges? For less money, more practical, and open to everyone.
Consciously or not, technology and end users have joined their hands to make this a reality. Today, almost everyone can now enjoy the little luxuries previously reserved to the elite.
Not a scoop! You are probably a user too, you now have on your phone, on-demand:
- A private driver in the form of Uber, Lyft.
- A second home with a Travel & Hotel App (Booking.com, Expedia.com, Airbnb.com or Vrbo.com),
- your personal shopper at NetaPorter.com,
- Instacart as a healthy shopping Butler,
- A private DJ for your parties with Spotify.com or Soundcloud.com
Examples and similars ventures are countless, and in almost any industry, this trend is massively growing, and it is not here to stop. Don't even mention the Kickstarter promises, simply back and pre-order what you would love to have.
You could be thinking how this was possible?
Simply put; technology has created a massive available inventory for users, reduced friction in time and distance, improved ordering processes, created instant satisfaction, the comfort of service, and freedom of choice. People are now more open and free to express their needs, and they are taking back the Customer empowerment for real this time "Customer is king."
The downside is, if you try to cover some issues, lie or under deliver your promises, the worldwide backlash is at the corner, on social networks and publicly, getting instant amplification, figure how to recover...we would rather not be around.
On the other hand, if you grow a trustful community, your most engaged users would even defend, contradict and educate on your behalf, helpful when attacked by politics, "trolls" or competitors, you just created a community of advocates.
Our deeper take is that these trends are linked to self-actualization, as Malraux said: "the 21st century will be spiritual or will not be". Self-actualization is not only about keeping yourself happy and successful. There is much more into it. Almost all of us want to perform daily tasks at the lower stress level possible while being more productive to lead a healthy life and reach our goals. Moreover, apparently, we are more and more looking to make this a priority without playing the bullies.
Furthermore, we are convinced that it is when you love what you do, in a productive but relaxed state, that you perform the best, both on the professional and personal levels; and you are then actually making the biggest impact on others and the world.
We will not cover here the downsides of a lot of teenagers and young people being stuck to their smartphones for the wrong reasons around FOMO (fear of missing out), and addictive behaviors...I firmly believe they should be educated, trained and limited in what they can do according to their age range; parents would have the most responsibility probably as the companies behind those services are not ready to self-regulate.
To conclude, either consciously or not, technology has given us the tools to get more time for ourselves, thus bringing a feeling of freedom in our lives, creating enjoyable experiences along the ultimate luxury of time, to enjoy life maybe a bit more when technology is an ally, not a Master.
How companies surfing the Luxury Democratization win?
Our second thought behind this reflection is around trying to understand why these new luxury democratization businesses and service providers are flourishing, the areas where this trend is growing and what is there to understand the societal point of view.
First let's observe from these new luxury consumers traits, what their preferences and motivations are.
- "We know what we want, and we want it now."
It is quite clear the focus of latest generations is based on experiences rather than possessions. They are learning from not only their experiences but from surrounding ones as well, they follow, are inspired and share truthful moments. They have superpowers now, they have a mobile phone, extension of almost all their senses, and they know how to use it, pretty well actually.
- The current generation finds frictionless practical experiences comparatively better than before, who would not? Technology which allows a personalized and immediate answer to their needs fit their lives perfectly.
- The World is their playground, open-minded, culturally aware, curious and adventurous; they want to experience life to the fullest and share it with their friends worldwide.
- Some ego is still at play, humorously, though, as a little boost in status by being the first to use this "cool" app. To attend the popular event would make the buzz or become viral. Makes me remember how first users of Uber would boast about the service, "classy ride for date nights."
Wellness & Fitness is the New Luxury
We are running short of time. Proper time, noise & technology management is one of a challenge to keep mental and physical well-being.
While Time is the ultimate luxury, the Healthy Lifestyle is becoming a preference for the newer generations.
Reducing stress, enhancing relationships and self-development tools are growing massively. Just look at the TinyBudha, MindBodyGreen platforms, the rise of Yoga in Western Cultures, Self Development books, coaching and mentoring successes.
Even recently, a massive project launched by Arianna Huffington herself, Thrive Global, who's mission is to support people in becoming more aware of the work - life balance and apply practical tools to reach their maximum potential, shows how essential this is becoming.
Stats show that only a 10 to 17% share of the Western countries populations are into wellness & fitness, whereas the wellness tourism is growing at 14% a year, there is a large space to be filled, many people to "convert."
There a is much Innovation in the field of Wellness & Fitness, from Wearables, VR, Mobile and Wellness travel, and it seems to be only starting, from meditation apps, health trackers to online courses and communities meet ups, space is booming.
More and more companies will be incorporating a Wellness & Fitness component in their services and internally towards employees, as benefits are now being globally recognized. Hopefully this trend will continue to strengthen for us to live healthier and longer, to keep technology at bay, where it belongs, at our service and not the other way around, helping us to achieve the ultimate goals around happiness.
It would probably go along the others trends in work-life balance, anti-aging movements and a multitude of initiatives in the transparent, horizontal, autonomous management.
Last minute addition, a well-known investment firm, Obvious VC, just added a Culture & Purpose appendix to their term sheet! If that is not a breakthrough.
I cannot wait to see where all this is going...
Looking forward to connecting, hear your views and welcome your insights.
In good health,
Alexandre, passionate about travel, self-development, and wellness, is the co-founder of DayPass: hotel wellness & fitness-on-demand, a mobile application connecting travelers and locals with hotels & resorts amenities: pools, gyms & spas day pass experiences on the go. Our vision is to create a private health club for everyone, with the mission to promote the healthy lifestyle.